Global ER&D: Accelerating Innovation

with Indian Engineering

Key Topics

• Part A:

a. A look at the past 5 years

b. A view on the next decade

c. India as a Design and Innovation Hub

d. Achieving the Next Frontier - Growth Imperatives for

Indian Supply Base

• Part B:

a. Vertical-wise Capability Analysis and Case Studies

Four major trends are driving investment
in ER&D
1
ƒ Electronics / Communication technologies increasing across verticals
Increasing use (e.g., Automotive, Construction, Energy)
of electronics
ƒ Enables real time monitoring, greater operational efficiencies and
higher comfort
2
Fuel efficiency/ ƒ Higher fuel efficiency and sustainability becoming a priority
Alternate Fuels

3
Convergence of ƒ Devices and products with multiple functionalities (e.g., Consumer
Technologies Electronics, Mobile handsets, Medical Devices)

4
ƒ Required customized products for the emerging markets
Products for
local markets ƒ Leverage local talent (India and China) to develop products for the
emerging markets

Source: NASSCOM – Booz report on Global ER&D: Accelerating Innovation with Indian Engineering
Customer perception of the Global ER&D
supply base has evolved and matured across multiple
dimensions
Product versus • Using offshoring for supporting complete products instead of processes
Process • Customers offshoring complete product responsibility to their offshore
Engineering design centers

• From supporting and sustaining existing products to supply base as a

Innovation vs source of innovation
Sustenance • New ideas targeted towards local/global markets driven by the supply
base
Diversification
• Gradual shift in services offshored – more IP sensitive, higher
of offshore
complexity, extensive interaction between teams
services
portfolio

Preference for • Option to choose across business models (captive vs ESPs)

Flexible • Availability / accessibility of large pool of skilled technical labor eith
Business experience across multiple verticals
Model

Source: NASSCOM – Booz report on Global ER&D: Accelerating Innovation with Indian Engineering
Indian ER&D services market has witnessed
rapid growth over the last 5 years

Indian ER&D Services Market • Short product life cycles, decreasing time to
2004–2009, USD billion
market, flexible capacity driving ER&D sourcing

• More than 60 per cent of current revenues from

the traditional verticals - Telecom,
Semiconductors and Automotive
48%
• North America continues to be the dominant
market with ~ 60 per cent market share

• Within services, embedded services in hardware

and software contribute ~ 45 per cent of the
revenues

• Number of offshore development centers

(ODCs) in 2009 is 3x-4x of ODCs in 2006

• On an average, 3.5 per cent of revenues

2004 2009
invested in innovation and IP development

Source: NASSCOM – Booz report on Global ER&D: Accelerating Innovation with Indian Engineering
Flexible Business models; Number of
engineers serving captives and ESPs more than tripled in
the past 5 years
Number of Captives & Service Providers-India
2009, # of companies • Indian supply base evenly split between
~ 300+
captives and service providers
• 300+ captives in India today
~ 80
• 60 per cent serving the Hi-tech verticals
(Semiconductors, Telecom, Consumer
# of Service Providers # of Captives Electronics & Computing Systems)
# of Engineers -Captives and Service Providers • All industry verticals have at least 20 different
2004 vs. 2009
ESPs serving them
~ 150,000
• Top ten ESP’s serving operating across
every vertical
• Total installed base of engineers about 1 million
~ 9,000 • Number of engineers employed by the industry
grown at a CAGR of 40 per cent since 2006
2004 2009

Source: NASSCOM – Booz report on Global ER&D: Accelerating Innovation with Indian Engineering
Customers leveraging India to design
products from first principles
Frugal engineering design principles
1 Low Cost Design and Target-contenting 2 Value Chain Optimization

I. New Baseline Platform I. Utilize lowest labor

cost in the region
II. Optimize customer
interface features and II. Co-locate suppliers
eliminate non-value III. Co-development of
add features parts with suppliers
III. Efficient design with Tandberg’s small & IV. Utilize non-traditional
low cost base portable USB supply base
Webcam

3 Capital Efficiency 4 Product Development Efficiency

I. Manufacturing I. Lower factor costs

simplicity
II. Organizational efficiency
II. Reduced capital
through incentives III. Process efficiency

III. Optimal balancing of IV. Sharing Testing Costs

capital and labor costs

Source: NASSCOM – Booz report on Global ER&D: Accelerating Innovation with Indian Engineering
Global and Indian companies leveraging
India for breakthrough innovative products
Global Company Examples Products Designed for Local Markets

Locosto Chip for Ultra Low-

GE MAC 400 Nokia 1100 Cost (ULC) Handsets

Domestic Company Examples

Tata NANO The “Chotukool” refrigerator Pureit

for rural India

Source: NASSCOM – Booz report on Global ER&D: Accelerating Innovation with Indian Engineering
Breadth of services: Level of coverage of the
Indian supply base expanded across many more verticals
Vertical Coverage across Service Providers
2006 vs. 2009
• Indian supply base expanding
2006 2009 capabilities in adjacent verticals
Automotive due to easy transferability of skills
Aerospace • Developing skills in high growth
Semiconductor areas – infrastructure engineering,
Energy renewable energy, green energy
Construction / Heavy Machinery initiatives
• India most attractive destination for
Industrial Automation
most of the key verticals
Computing Systems
• Aerospace, Automotive, Telecom,
Medical Devices Semiconductors, Medical
Consumer Electronics Devices, Industrial Automation,
Infrastructure Construction/heavy machinery
Telecom • Second most attractive, after
China, in case of Energy and
> 80% of the service providers < 25% of the service providers Infrastructure
operate in this vertical operate in this vertical

Source: NASSCOM – Booz report on Global ER&D: Accelerating Innovation with Indian Engineering
Depth of services: India is fast climbing the
services ladder with greater domain capabilities
Electronic Engineering Services Mechanical Engineering Services
2006 vs. 2009 2006 vs. 2009

Algorith Prototy Integra Full

Requirem Software Chip / CAE/CF Prototype
Systems m ping tion Product Documentati
Industry ents Design & Board D Build & Mfg Support VA/VE
Analysis Develop V&V Testin Develop on
Gathering Coding Design Analysis Testing
ment testing g ment1

Auto

Aerospace

Semicondu
ctor
Constructio
n / Heavy
Machinery
Industrial
Automation
Computer
Systems
Medical
Devices
Consumer
Electronics

Telecom

Full capacity (2006) Nascent capacity (2006) Arrow indicate move from Nascent to Full capacity
over 2006-2009
Source: NASSCOM – Booz report on Global ER&D: Accelerating Innovation with Indian Engineering
Indian ER&D services market expected to
exceed initial market projections

Indian ER&D Services Market Forecast

USD 40-45 billion

Revised
projections

31 USD 30-40 billion

NASSCOM-Booz Study 2006 Estimate
NASSCOM Market Size Estimates
New Estimate

2006 2009 2020

Source: NASSCOM – Booz report on Global ER&D: Accelerating Innovation with Indian Engineering
In 2020, incremental growth to be driven by
new verticals and new markets
Incremental growth in ER&D Services Opportunity 2020 Share by Vertical
USD billion Aero,
Consumer
electronics
23%
32-37 40-45

77%
Auto, Telecom,
Semiconductors

2020 Share by Geography

Japan & RoW

North
America

ER&D opportunity Growth in ER&D ER&D opportunity

(2009) opportunity (2020)
(2009-2020)
Europe
() Figures in brackets indicate s share for 2009
(1) Others includes Computing systems, Construction/Heavy machinery, Infrastructure, Energy, Medical devices and Industrial automation
Source: NASSCOM – Booz report on Global ER&D: Accelerating Innovation with Indian Engineering
Significant opportunity exists for supply
base to develop product-based solutions that
encompass other service offerings
Addressable Offshoreable Opportunity by Service Offering
(2020, USD billion)
Available
Opportunity
Fundamental Research
Core Product Development & Design

Technical Publish, MRO & other support activities

Design Support Eng Anal / Modeling

Size of
Manf. Engg./ Support
bubble
Embedded/ Electronic - HW & chip design represent
ER&D
market size
Prototype Bldg., Testing, V&V in 2020

Embedded/ Electronic - SW

Addressed
Opportunity

Source: NASSCOM – Booz report on Global ER&D: Accelerating Innovation with Indian Engineering
Domestic Indian ER&D market is expected to
add to future growth
ER&D Services Market
(2020)
• Indian companies have typically retained ER&D in-
house

• Public sector leading the ER&D spend; corporate

Domestic Market ER&D witnessing strong growth
10% - 15%
• Currently, only ~ 10 per cent of the Indian companies
estimated to leverage outsourcing

• Access to next generation technologies, leveraging

best practices and decreasing time-to-market are the
key drivers to outsource

• Planned investments in infrastructure, energy and

utilities expected to boost engineering spend

• End to end Engineering, Procurement and

85% - 90% Construction (EPC) services to grow to almost 40 per
cent of the domestic market
Exports 85% - 90%
• Offset policies in Aerospace expected to add to
industry revenues
Exports
Total = USD 40-45 billion

Source: NASSCOM – Booz report on Global ER&D: Accelerating Innovation with Indian Engineering
Within the domestic market, Infrastructure,
Aerospace & Energy expected to contribute ~80% of revenue

Indian Domestic ER&D Outsourcing Market

2020
Construction / Consumer
Heavy Machinery Electronics
Automotive

2009
Telecom

Infrastructure

Energy

Aerospace
Total = USD 400 - 450
million
Total = USD 4 – 6
billion

Source: NASSCOM – Booz report on Global ER&D: Accelerating Innovation with Indian Engineering
Indian supply base executing cutting edge
projects for global majors Indicative

• Handsets for domestic market

Aerospace • Flight Controls
Telecom • Mobile Device Applications
Avionics • Infotainment

• AUTOSAR • Netbooks
Computing
Automotive • Safety & Powertrain • Portable devices for rugged
Systems
Electronics terrains
• Body Electronics • Webcams
• Alternate powertrain
(CNG)
• Imaging
• Alternate energy sources
Energy Medical Devices • Diagnostics
– Solar
– Portable ECG machines
– Biofuels
– Portable ultrasound machines
• Device applications

Source: NASSCOM – Booz report on Global ER&D: Accelerating Innovation with Indian Engineering
 17

However, there are challenges facing the

Indian supply base

• Sustaining cost competitiveness

• Lack of domain capabilities
• Absence of linkages to manufacturing
capabilities

• Lack of a formal innovation policy

• Lack of supporting ecosystem
• Emerging competition
Getting to USD 40-45 billion ER&D services
industry will require a four pronged strategy
from the supply base

1 3
New Service
New Markets
Offerings

Expanding
Engineering
Services Revenue
Base
2 4
Strengthening
New Verticals
Existing Business

However collaborative action is required to ensure future growth

Source: NASSCOM – Booz report on Global ER&D: Accelerating Innovation with Indian Engineering
Priority Action 1: Build complete product
development ecosystem

• Defense labs to collaborate with private players

oOpening up for internships to students and industry employees,
Free of cost design tools to colleges
• Build product engineering support infrastructure (e.g. high end
computational facilities etc.) – PPP or joint investment models to reduce
TCO
• Development of innovation clusters/technology parks
o Encourage cooperation between different constituents of a cluster
o SEZs for Aerospace, Automotive Semiconductors
Priority Action 2: Positioning India as a
global Engineering and R&D hub

• Enhanced customer outreach and strategic messaging with the key

decision makers
• Showcasing India’s leadership in ER&D
• Creating differentiation for Indian services - global delivery model,
Scalability, Certifications, Innovation Capabilities
Priority Action 3: Increased returns on Offset
Policies

• Specifying minimum offset percentages for Engineering Services in

defense and aerospace sector. Expected to have a strong influence on
technology development, employment creation and GDP
Priority Action 4: Accelerate talent capacity
and capability

• Curriculum changes with Engineering Services specific electives

• Focus on mechanical and electronic streams within Aerospace,
Automotive and Telecom
• Higher cooperation between research institutes, industry and
academia for well-rounded skill development
oSpecialized programs within vertical domains; special scholarship
programs; internship programs ;on-campus facilities to provide
training facilities
• Faculty Development Program
Priority Action 5: Develop capabilities in
emerging technologies in industries of
strategic interest to India

• Develop SMEs for frugal engineering

• PPP for setting up labs with collaboration with academia
• Incentivizing R&D through sponsored research programs
• Setup courses that focus on new and emerging technologies
To Summarize: ER&D services positioned to
be the next growth engine for the Indian IT-BPO
industry
• ITO, BPO and ER&D services are key pillars – leadership in others
helped consolidate in ER&D services
• Impressive growth - a reflection of significant expansion of capabilities
and domain expertise
• We are in an exciting and creative profession - expanding the portfolio
from “Art to Part”
• India playing pivotal role in accelerating innovation – emerging as a
design and innovation hub
• Significant future opportunity exists – capability to emerge as a leader in
key verticals
• Potential to create a knowledge based economy ; boost India’s GDP
growth
• Existing ER&D culture in the country needs to integrate seamlessly to
ensure future growth
Key Topics

• Part A:

a. A look at the past 5 years

b. A view on the next decade

c. India as a Design and Innovation Hub

d. Achieving the Next Frontier - Growth Imperatives for

Indian Supply Base

• Part B:

a. Vertical-wise Capability Analysis and Case Studies

Aerospace

As Aerospace OEMs focus on being large

scale SIs, increasingly complex activities are being offshored
to India Offshored ER&D Activities

Blue, bolded text

ƒ Software Regression & V&V ƒ Core/Advanced R&D (e.g.,
represents new ƒ Fluid Structure Interaction Materials, etc.)
activities in each ƒ Composite Design ƒ Technical Documentation & ƒ Bio-fuel based engine
ƒ Tolerance analysis Translations Development
period ƒ Homologation ƒ End-to-End Product
ƒ Dynamic Analysis – NVH
ƒ Module Design Development
ƒ Digital Prototype Assembly
ƒ Drafting / Detailing ƒ Integrated System Design
ƒ Reverse Engineering
ƒ Plastic Mold Design ƒ Electromagnetic
ƒ CAD, CAE, CAM ƒ Application development (IFE) Compatibility (EMC)
ƒ CFD Analysis & Design ƒ Model based development ƒ Design Consultancy
ƒ Acoustics - Noise & Sonic
ƒ ECM ƒ CAD, CAE, CAM ƒ Stress & Thermal Analysis Boom Analysis
ƒ Finite Element Analysis ƒ CFD Analysis & Design ƒ Jigs & Fixtures ƒ Surfacing
ƒ Software Regression & V&V ƒ ECM ƒ Avionics/System Integration ƒ Design Automation
ƒ Fluid Structure Interaction ƒ Finite Element Analysis ƒ Linear & Non Linear Static ƒ Crash Simulation
ƒ Technical Documentation & Translations ƒ Software Regression & V&V Analysis
ƒ Algorithm Development in
ƒ Homologation ƒ Fluid Structure Interaction ƒ Mold Flow Analysis Electronics
ƒ Module Design ƒ Technical Documentation & Translations ƒ Tool Design ƒ Composite Design
ƒ Drafting / Detailing ƒ Homologation ƒ System Testing and Software ƒ Tolerance analysis
development
ƒ Plastic Mold Design ƒ Module Design ƒ Dynamic Analysis – NVH
ƒ CFD Analysis & Design
ƒ Design Consultancy ƒ Drafting / Detailing ƒ Digital Prototype Assembly
ƒ ECM
ƒ Stress & Thermal Analysis ƒ Plastic Mold Design ƒ Reverse Engineering
ƒ Finite Element Analysis
ƒ Jigs & Fixtures ƒ Design Consultancy ƒ CAD, CAE, CAM
ƒ IFE Application Development
ƒ Avionics/System Integration ƒ Stress & Thermal Analysis
ƒ Model Based Development
ƒ Linear & Non Linear Static Analysis ƒ Jigs & Fixtures
ƒ Mold Flow Analysis ƒ Avionics/System Integration
ƒ Tool Design ƒ Linear & Non Linear Static Analysis
ƒ System Testing and Software ƒ Mold Flow Analysis
development ƒ Tool Design
ƒ System Testing and Software development

Past Present Future

Note: The activities listed provide a comprehensive view of the supply base, specific companies in India may already be involved in activities listed in the “Future” section
Source: Booz Demand Side Interviews, Booz & Company IC and analysis
Aerospace

Opportunities lie in fuel efficiency and

electronics/computer-related innovation
Green Technology
Description
ƒ Aerospace companies will ƒ Possible Activities
continue to push for ways to
increase fuel efficiency
– Development of
composites and alloy
materials with superior
properties (temperature,
drag, etc.)
– Improvements in
aerodynamic design
– Winglets
ƒ Open-rotor motors is an
area of renewed interest
given the fuel efficiency
gains, but noise pollution,
which is an area of
increased focus itself, is a
problem
ƒ Bio-fuels are gaining more
interest as companies are
spending more R&D dollars
on testing and building
engines that utilize them
Technology Trends and Potential ESP Involvement
Higher Electronic Content Avionics
Relevance for India Description Relevance for India Description Relevance for India
ƒ The electronic ƒ Possible Activities ƒ Aircraft are moving ƒ Possible Activities
– Thermal and content of aircraft – Low-cost towards integration – Software
structural analysis will continue to alternatives for of avionics and applications
of composite increase COTS products, some flight control & development
structures, CFD- ƒ Fly by wireless will embedded airplane systems – Embedded Control
based analysis allow for less wiring software ƒ Preference for more & Diagnostic
ƒ More Electric development, test generic processors Systems
Architecture (MEA) scripts for testing and maximizing Development
will improve overall power and fuel software based
aircraft performance management functionality
and energy use systems ƒ Next-gen data
ƒ Development of protocols will allow
Commercial Off- for greater
The-Shelf (COTS) connectivity
software and ƒ Improved safety
hardware, use of through situational
generic processors awareness, weather,
and maximizing etc.
software based
functionality
Medium-term opportunity / investments Immediate opportunity / Minimal investments
required by Supply base to address these required by Supply base to address these needs
needs

Source: Booz Demand Side Interviews, Booz & Company IC and analysis
Automotive

Indian supply base continues to support

increasingly high complexity activities

Offshored ER&D Activities ƒ Tear Down & Benchmarking

Blue, bolded text
represents new
activities in each
period
ƒ E-BOM Management
ƒ BIW Design
ƒ Module Design
ƒ Engineering Development,
Testing, Simulation & Analysis ƒ Technical Documentation &
ƒ Develop Design FMEA
ƒ Develop Gage, Fixture, Test
Equipment, & Mistake
Proofing Plan
ƒ Database Management
ƒ Conversions (CATIA 4 to 5)
ƒ CAD
ƒ Process Sheets
ƒ Competitive Benchmarking
(Non-Teardown)
Translations
ƒ Engineering Change
Management (ECM)
ƒ Homologation & Regulatory
Affairs
ƒ Knowledge based
engineering (KBE)
ƒ Factory simulation
ƒ Database Management
ƒ Conversions (CATIA 4 to 5)
ƒ CAD
ƒ Process Sheets
ƒ Competitive Benchmarking
(Non-Teardown)
ƒ Technical Documentation & ƒ Sub-Assembly Design
Translations
ƒ ECM
ƒ Homologation & Regulatory ƒ Tolerance Analysis and
Affairs
ƒ E-BOM Management
ƒ BIW Design
ƒ Module Design
ƒ Engineering Development
Testing, Simulation & Analysis ƒ Geometric Design &
ƒ Develop Design FMEA
ƒ Develop Gage, Fixture, Test
Equipment
ƒ Design Automation
ƒ Supplier Interface &
ƒ Digital Manufacturing Management
ƒ Stress/stiffness prediction ƒ Overall Program Risk
ƒ Geometric Design & ƒ Conduct DV, PV, & CC
ƒ Finite element analysis
(FEA)
Tolerance Testing
ƒ CFD, CAE, CAD ƒ Integrated System Design
ƒ Detailing
ƒ Technical & Plant Simulation ƒ Core/Advanced R&D (e.g.,
ƒ Middleware and Application
ƒ Database Management Materials, etc.)
development
ƒ Conversions (CATIA 4 to 5) ƒ End-to-End Product
ƒ PCB Layout
ƒ Process Sheets Development
ƒ Model based development
ƒ Competitive Benchmarking ƒ Algorithm Development
ƒ Software test and validation
(Non-Teardown) ƒ Base Code Development
ƒ Virtual Testing
ƒ Technical Documentation & ƒ Hardware and Chip Design
ƒ Surfacing
Translations ƒ KBE
ƒ ECM ƒ Factory simulation
ƒ Component Design
ƒ Homologation & Regulatory ƒ FEA
ƒ Value Analysis Affairs ƒ Detailing
ƒ E-BOM Management ƒ Firmware
Synthesis
ƒ BIW Design ƒ Virtual Testing
ƒ Manufacturing Feasibility
ƒ Module Design ƒ Surfacing
Study
ƒ Engineering Development ƒ Sub-Assembly Design
ƒ Digital Manufacturing
Testing, Simulation & Analysisƒ Component Design
ƒ Stress/stiffness prediction
ƒ Develop Design FMEA ƒ Value Analysis
ƒ Develop Gage, Fixture, Test ƒ Tolerance Analysis and
Tolerance
Equipment
ƒ Computational fluid Synthesis
ƒ Middleware and Application ƒ Manufacturing Feasibility
dynamics (CFD )
development
ƒ Technical & Plant Study
ƒ PCB Layout
Simulation
ƒ Model based development

Past Present Future

Note: The activities listed provide a comprehensive view of the supply base, specific companies in India may already be involved in activities listed in the “Future” section
Source: Booz Demand Side Interviews, Booz & Company IC and analysis
Automotive

Technology opportunities lie in the areas of

Safety & security and In-car entertainment
Technology Trends and Potential ESP Involvement
In-car Information and
Green Technology Safety & Security
Entertainment
Technology Technology
Technology Description / Potential ES Provider Potential ES Provider Potential ES Provider
Description / Description /
Potential Work Involvement Involvement Involvement
Potential Work Potential Work
ƒ Automotive industry is ƒ Possible Activities ƒ Advanced ƒ Possible Activities ƒ Tomorrow’s cockpits ƒ Possible Activities
shifting towards green – System level electronics will allow – Software will allow for higher – Embedded
technology and fuel validation of for greater driver development for levels of software
efficiency Powertrain ECU and occupant safety safety modules connectivity, applications
– Plug-in hybrids – HIL testing – Fast-response – Functional and information, and development
– Plug-in fully electric – Development of sensors (e.g. system testing – Functional and
Powertrain entertainment system testing
– Gasoline-electric hybrids airbag – Advances in HMI
– Hydrogen fuel cells embedded control deployment, crash – Development of
systems (e.g. cell phones, interface for
– Advanced diesel detection, etc.) MP3 Players, etc.)
technologies – Software support – Active safety external device
for Hybrid Engines – Consumer connectivity
– Flex-fuel engines (ESC, crash applications
avoidance – S/W development
connectivity for HMI
systems, etc.) (laptops, iPods,
– X-by-wire environment
etc.) – Developing
applications – Advanced GPS
– Camera based vehicular
systems (alerts for communication
safety systems fuel stations, p.o.i, platforms
etc.) – Developing
– Advanced software platforms
navigation (Ex Sync)
systems linked
with Telematics
– Safety electronics
and warning
systems
Medium-term opportunity / investments required Immediate opportunity / Minimal investments
by Supply base to address these needs required by Supply base to address these needs
Source: Booz Demand Side Interviews, Booz & Company IC and analysis
Telecom

Telecom supply base capabilities are

evolving to system level and end-to-end capabilities

Offshored ER&D Activities

Blue, bolded text
represents new
activities in each
ƒ Customized control software
period
ƒ Embedded software development
ƒ Development of layer2, network management
modules, security and infrastructure
ƒ End-to-end development of embedded system ƒ end-to-end development of embedded system
ƒ Software programming designing ƒ Software programming designing
ƒ Networking software development ƒ Networking software development
ƒ Bug Fixtures and unit testing ƒ Bug Fixtures and unit testing
ƒ Pre-integration test ƒ Pre-integration test
ƒ VLSI design ƒ Database Management
ƒ Database Management ƒ Database Management ƒ CAD Conversions
ƒ Conversions (CATIA 4 to 5) ƒ Conversions (CATIA 4 to 5) ƒ CAD
ƒ CAD ƒ CAD ƒ Testing and Maintenance
ƒ Bug Fixtures and unit testing ƒ Testing and Maintenance ƒ ASIC design
ƒ Testing and Maintenance ƒ ASIC design ƒ VLSI design
ƒ ASIC design ƒ Protocol Software design ƒ Protocol Software design
ƒ Protocol Software design ƒ Technical assistance ƒ Technical assistance
ƒ Technical assistance ƒ Technical documentation ƒ Technical documentation
ƒ Technical documentation ƒ Analog design ƒ Analog design
ƒ Analog design ƒ ER&D of embedded system software products ƒ ER&D of embedded system software products
ƒ ER&D of embedded system software products

Past Present Future

Note: The activities listed provide a comprehensive view of the supply base, specific companies in India may already be involved in activities listed in the “Future” section
Source: Booz Demand Side Interviews, Booz & Company IC and analysis
Telecom

Several next generation telecom technologies

have potential for ESP involvement
Technology Trends and Potential ESP Involvement
New Wireless Standards Competition for Home Telecom Network Convergence
Description Relevance for India Description Relevance for India Description Relevance for India
ƒ New wireless standards ƒ Possible Activities ƒ Competition will be ƒ Possible Activities ƒ Integration and ƒ Possible Activities
with greater speeds and – Localization of 4G fierce for the home – Hardware convergence will be – Hardware
reliability will continue to be wireless between traditional development a major trend as development
developed equipment telecom and cable – Mechanical voice and data – Mechanical
– Recently, R&D focus has – RF Testing companies, with one engineering services merge engineering
shifted from 3G (EV-DO, – Embedded – Embedded – Traditionally, each – Embedded
software for key being Passive software software
HSPA, etc.) to 4G, Optical Networks telecom service
namely LTE programming – Testing was built on its – Testing
routers (PONs)
– LTE is an all-IP platform – PONs eliminate own network -
that can better handle the the "last mile" gap PSTN for wireline,
transport of multimedia- between homes GSM and CDMA
intensive applications and businesses for wireless,
– Devices are being and high-speed internet
developed for commercial optical networks – The logical
launch in 2010 and – PONs are endpoint is the
expected to reach mass enabling wireline coming together of
adaptation in 2012 operators to existing networks
upgrade their into a unitary
networks with network
FTTx (Fiber to the architecture,
X, which can be termed Next
node or home) Generation
allowing telecom Networks (NGNs)
companies to – The IP Multimedia
compete with Subsystem (IMS)
cable companies is an important
stepping stone to
NGN

Medium-term opportunity / investments required Immediate opportunity / Minimal investments

by Supply base to address these needs required by Supply base to address these needs

Source: Booz Demand Side Interviews, Booz & Company IC and analysis
Telecom

Two divergent trends present in handset

manufacturing - smartphones and low cost handsets
Technology Trends and Potential ESP Involvement
Device Convergence / Smartphones Emerging Markets Handsets
Description Relevance for India Description Relevance for India
ƒ Technology has finally reached a tipping ƒ Possible Activities ƒ Handsets for emerging ƒ Possible Activities
point as far as being able to successfully – Application development markets must be low-cost, – Low cost/value engineering
merge numerous formerly discrete across various OS while still providing a fair – HW and SW development
devices into one, converged device amount of basic features – End-to-end product
– Potential data revenues and demand for – The focus of market growth development
device convergence is driving has turned to the emerging
significant growth in the smartphone markets in areas such as
segment China, India, Asia- Pacific,
– Mobile phone operating systems the Middle East, and Africa,
continue to evolve, with different where low penetration rates
development needs for each OS and pent up demand for
– Increased ARPU (Average Revenue network connectivity bode
Per User) associated with data well for new subscriber
applications is driving operator’s push acquisitions
for data-centric smartphones – Emerging markets are
characterized by price
sensitivity that creates
demand largely for entry-
level phones
– Low cost handsets are
typically very minimal in
terms of features, but do
include features that are
customized for the emerging
markets (i.e., multiple
phonebooks, flashlight
integration, etc.)
Medium-term opportunity / investments required Immediate opportunity / Minimal investments
by Supply base to address these needs required by Supply base to address these needs

Source: Booz Demand Side Interviews, Booz & Company IC and analysis
Semiconductors

Indian supply base continues to evolve and

support increasingly complex activities
Offshored ER&D Activities

Blue bolded text

represents new ƒ Requirement definition and analysis
activities in each ƒ Pre silicon validation
– Pre-layout Verification ƒ Commercial
period Requirements Capture
– Test Synthesis
– RTL Design ƒ Post silicon validation ƒ Functional Requirements
Capture
– RTL/Verilog design and Validation ƒ Digital/Analog IP
ƒ Architecture system level
– Logic Synthesis ƒ Stacks
design
ƒ Post silicon validation ƒ System Integration
ƒ Physical implementation
ƒ Digital/Analog IP ƒ Embedded solutions
– Fabrication
ƒ Stacks ƒ Application software
ƒ Development of Board
ƒ System Integration ƒ VLSI Design/Verification Support Packages (BSPs)
ƒ System Integration ƒ Embedded solutions ƒ Writing Device Drivers ƒ Requirement definition and
ƒ Embedded solutions ƒ Application software ƒ Platform Porting analysis
ƒ Application software ƒ VLSI Design/Verification ƒ Testing Software ƒ Pre silicon validation
ƒ VLSI Design/Verification ƒ Writing Device Drivers ƒ Simulation and debugging – Pre-layout
Verification
ƒ Writing Device Drivers ƒ Platform Porting ƒ Embedded OS
– Test Synthesis
ƒ Platform Porting ƒ Testing Software ƒ PCB Design
– RTL Design
ƒ Testing Software ƒ Simulation and debugging ƒ ASIC/SoC/SiP
– RTL/Verilog
ƒ Simulation and debugging ƒ Embedded OS ƒ Firmware & Diagnostics design and
ƒ Embedded OS ƒ PCB Design Validation
ƒ PCB Design ƒ ASIC/SoC/SiP – Logic
ƒ ASIC/SoC/SiP ƒ Firmware & Diagnostics Synthesis
ƒ Firmware & Diagnostics

Past Present Future

Note: The activities listed provide a comprehensive view of the supply base, specific companies in India may already be involved in activities listed in the “Future” section
Source: Booz Demand Side Interviews, Booz & Company IC and analysis
Semiconductors

Semiconductor technology is aiming for

better power management and integrated chipsets
Technology Trends and Potential ESP Involvement

Higher Performance / Integrated

Power Management Next-Gen Wireless Chipsets
Chipsets
Potential ES Technology Potential ES Technology Potential ES
Technology Description /
Provider Description / Provider Description / Provider
Potential Work
Involvement Potential Work Involvement Potential Work Involvement
ƒ Power management in ƒ Low power ƒ Next-gen baseband ƒ Software ƒ Moore’s law implies ƒ Parallel
semiconductor devices is semiconductor chips will need to be development for that computing programming S/W
crucial for portable design, and developed, and safety modules power doubles ever engineering
applications as it validation services current chips will ƒ Functional and two years, which is ƒ Verification services
determines battery life need to be made system testing a principle that for multi-core
– Integrated chipsets offer cheaper to guides ER&D products
better power manufacture planning for many ƒ System-on-chip
consumption than – 4G chipsets will semiconductor design and
discrete solutions represent the next companies verification
– Intel uses a 2:1 guideline wave – Push to include
for design elements, for – The market is multiple cores or
every 1% increase in moving to more integrate various
power consumption, single chip mobile functions into a
performance must solutions that single chip
increase by 2% integrate the – Adjustments to
baseband and existing software
microprocessor in are required to
single package maximize
utilization of the
computing
resources
provided by multi-
core processors

Medium-term opportunity / investments required Immediate opportunity / Minimal investments

by Supply base to address these needs required by Supply base to address these needs

Source: Booz Demand Side Interviews, Booz & Company IC and analysis
Semiconductors

In Semiconductor equipment, changes in

manufacturing process and expansion into related markets is
driving technology
Technology Trends and Potential ESP Involvement
Manufacturing Changes Adjacent Markets
Technology Description / Potential Potential ES Provider Technology Description / Potential ES Provider
Work Involvement Potential Work Involvement
ƒ Semiconductor manufacturing is still an ƒ Mechanical design, software ƒ Semiconductor equipment ƒ Equipment design and
evolving process, and new design, and automation for technology and knowledge validation
equipment/facilities will be needed to new equipment can be leveraged for other ƒ Mechanical, embedded
incorporate changes ƒ Sustenance engineering for markets software, and automation
– Wafer size changes from 200mm to older equipment – Flat panel displays
300mm and then to 450mm wafers in – Solar photovoltaic cells
the future – Flexible electronics
– Reduced line widths, which involves – Energy efficient glass
increased complexity due to more
dies per wafer
– Alternative materials outside of
silicon are being researched

Medium-term opportunity / investments required Immediate opportunity / Minimal investments

by Supply base to address these needs required by Supply base to address these needs

Source: Booz Demand Side Interviews, Booz & Company IC and analysis
 Computing Systems

Computing systems supply base supports a

wide range of activities
Offshored ER&D Activities
Blue, bolded text
represents new ƒ Complete Product Ownership
activities in each ƒ Product Conceptualization
period ƒ Architecture
ƒ Architecture ƒ Hardware/Mechanical Design and Development
ƒ Hardware/Mechanical Design and Development ƒ System Software Design & Development
ƒ System Software Design & Development ƒ System Integration and Testing
ƒ System Integration and Testing ƒ Product Documentation
ƒ Product Documentation ƒ Product Support
ƒ Mechanical Design and Development ƒ Derivative product HW
ƒ System Software Enhancements & Maintenance ƒ Mechanical Design and Development
ƒ Development/Maintenance Release Testing inc ƒ System Software Enhancements & Maintenance
System Test, Performance Tests etc
ƒ Development/Maintenance Release Testing inc
ƒ Hardware, Mechanical fixes System Test, Performance Tests etc
ƒ Product & System Software Sustenance ƒ Hardware, Mechanical fixes
ƒ Firmware Development ƒ Product & System Software Sustenance
ƒ Hardware Design & Development ƒ Software Product Development
ƒ Verification ƒ Firmware Development
ƒ Porting and Migration Services ƒ Hardware Design & Development
ƒ Verification and validation ƒ Product Reengineering (ROHS compliance, ƒ Verification
ƒ Porting and Migration Services application/platform porting)
ƒ Porting and Migration Services
ƒ Product Reengineering (ROHS compliance, ƒ Testing Services
ƒ Product Reengineering (ROHS compliance,
application/platform porting) ƒ Tech Support (L1, L2 and L3) application/platform porting)
ƒ Testing Services ƒ Testing Services
ƒ Tech Support (L1, L2 and L3) ƒ Tech Support (L1, L2 and L3)

Past Present Future

Note: The activities listed provide a comprehensive view of the supply base, specific companies in India may already be involved in activities listed in the “Future” section
Source: Booz Demand Side Interviews, Booz & Company IC and analysis
Computing Systems

Technology trends moving towards

technologies that will make ownership cheaper
Technology Trends and Potential ESP Involvement
Portability Lower Power Consumption Advanced Network Architecture Scalability / Virtualization
Technology Potential ES Technology Potential ES Technology Potential ES Technology Potential ES
Description / Provider Description / Provider Description / Provider Description / Provider
Potential Work Involvement Potential Work Involvement Potential Work Involvement Potential Work Involvement
ƒ Portability and ƒ Mechanical / ƒ Power ƒ Energy efficient ƒ Network ƒ Design, ƒ Technology that ƒ Design and
miniaturization of HW engineering consumption is design architecture will development, allow for greater development of
components will and design becoming a ƒ CAD (Modeling/ continue to be testing, and scalability, such blade servers
continue to be a trend ƒ Software greater concern Detailing) refined, with sustenance as through used in
– Consumer demand development as hardware ƒ Analysis new protocols engineering virtualization upcoming cloud
is shifting to ƒ Testing becomes more (Structural, and standards ƒ Product Support and cloud computing
portable PCs, ƒ Documentation powerful and Thermal, – Internet small ƒ Prototyping computing, will environments
namely laptops and complex Reliability, CFD, computer be sought after ƒ Deployment
netbooks – Design and systems
– Features such as Rotor to minimize and product
development Dynamics) interface fixed costs support
portability and of storage (iSCSI)
wireless – Cloud
and server storage area computing
connectivity are systems networks
important involves real-
taking into (SANs) time scalable
– Ultraportables, consideration interconnects
which are smaller resources
energy and are low-cost provided as a
and less expensive, power & less
but have fewer service over
consumption. complicated the Internet
features, are – Developing – Ethernet-
gaining in popularity – Allows for
technologies Based extremely
to reduce the interconnect flexible
ongoing protocols computing
energy costs offer better resources
of reliably performance – Used by
maintaining at lower cost Amazon,
data Google,
Yahoo, etc
Medium-term opportunity / investments required Immediate opportunity / Minimal investments
by Supply base to address these needs required by Supply base to address these needs
Source: Booz Demand Side Interviews, Booz & Company IC and analysis
Consumer Electronics

Indian supply base has significant coverage

of the entire Consumer Electronics value chain
Offshored ER&D Activities
ƒ Product conceptualization
Blue, bolded text ƒ Complete development of embedded components
represents new ƒ end-to-end development
activities in each ƒ Structural engineering ƒ Requirements and Algorithm Development
ƒ Plastic engineering ƒ Chip Design
period
ƒ Product design ƒ Structural engineering
ƒ Design evaluation services ƒ Plastic engineering
ƒ Prototype development ƒ Product design
ƒ Batch quantity development and supply services ƒ Design evaluation services
ƒ Mock-up development services ƒ Prototype development
ƒ Reverse engineering services ƒ Batch quantity development and supply services
ƒ Tool design and development of tools for plastic ƒ Mock-up development services
parts and sheet metal parts ƒ Reverse engineering services
ƒ Semiconductor design and development ƒ Tool design and development of tools for plastic parts
ƒ Applications/middleware debugging and sheet metal parts
ƒ LSI/VLSI design ƒ Semiconductor design and development
ƒ Embedded software development ƒ Applications/middleware debugging
ƒ Engineering Change ƒ LSI/VLSI design
ƒ CAE, CFD, FEA Analysis ƒ Embedded software development
ƒ CAE, CFD, FEA Analysis
ƒ Data migration services ƒ Engineering Change
ƒ Data migration services
ƒ Detailing services ƒ CAE, CFD, FEA Analysis
ƒ Detailing services
ƒ Embedded Services ƒ Data migration services
ƒ PLM Services
ƒ Software development ƒ Detailing services
ƒ Embedded Services
ƒ UI design & testing ƒ Embedded Services
ƒ Software development
ƒ IP Development ƒ Software development
ƒ UI design & testing
ƒ UI design & testing
ƒ IP Development
ƒ IP Development
Past Present Future

Note: The activities listed provide a comprehensive view of the supply base, specific companies in India may already be involved in activities listed in the “Future” section
Source: Booz Demand Side Interviews, Booz & Company IC and analysis
Consumer Electronics

The trend is towards devices that blend

multiple functions and open up new segments
Technology Trends and Potential ESP Involvement
Device Convergence Connectivity Digitalization
Technology Technology
Technology Description / Potential ES Provider Potential ES Provider Potential ES Provider
Description / Description /
Potential Work Involvement Involvement Involvement
Potential Work Potential Work
ƒ While especially true for ƒ Mechanical / HW ƒ Connectivity in ƒ Mechanical / HW ƒ Highly popular ƒ Mechanical / HW
mobile handsets, device engineering and consumer devices engineering and contents such as engineering and
convergence is occurring design creates opportunities design books and maps are design
across consumer electronics ƒ Software to provide services ƒ Software increasingly available ƒ Software
– Functionality of a camera, development seamlessly across development in digital format due development
camcorder, music player, ƒ Testing mobile and fixed ƒ Testing to customer demand ƒ Testing
game console, and PDA ƒ Documentation devices ƒ Documentation – eBook readers ƒ Documentation
are all discrete devices – Trend is towards such as Amazon’s
that can now be found in a including internet Kindle have been
phone connectivity successful
– Game consoles can now through – Music and movies
stream movies, function as technologies such are increasingly
a DVR, and play DVD and as Wi-Fi or purchased in digital
Blu-Ray discs Bluetooth, even in formats (Apple is
devices not now the biggest
traditionally music seller in the
associated with US, ahead of
computer use Walmart)
(such as home – Paper maps have
theatre equipment) been replaced by
personal
navigation units,
which can now
provide real-time
traffic updates as
well as turn-by-turn
directions
Medium-term opportunity / investments required Immediate opportunity / Minimal investments
by Supply base to address these needs required by Supply base to address these needs
Source: Booz Demand Side Interviews, Booz & Company IC and analysis
Medical Devices

Medical devices involvement is still maturing,

but will cover a greater portion of the value chain in the future
Offshored ER&D Activities
Blue, bolded text
represents new ƒ Molded part design ƒ Risk Analysis
ƒ Pre-Market Approval/ ƒ Design & code reviews
activities in each Notification ƒ Test Engineering
period ƒ Industrial Design
ƒ Designs complying with FDA, ƒ Design for testability
IEC, & UL requirements ƒ Development of test fixtures
ƒ Concept exploration
ƒ Compliance with FDA design ƒ Development of software for
ƒ Product styling controls production testing
ƒ Human factors engineering ƒ Electromagnetic compliant ƒ Risk Management
ƒ Mechanical Design designs
ƒ Reliability Engineering
ƒ Molded part design ƒ Regulatory Compliance &
Certification ƒ Hazard Analysis
ƒ Pre-Market Approval/ Notification
ƒ Verification & Validation ƒ Product Manual Development
ƒ Designs complying with FDA, IEC, &
and Publication
UL requirements ƒ Specifications Development
ƒ Industrial Design
ƒ Compliance with FDA design controls ƒ Regulatory Compliance
Strategy Formulation ƒ Concept exploration
ƒ Electromagnetic compliant designs
ƒ Design and Development ƒ Product styling
ƒ Regulatory Compliance & Certification
ƒ System and software ƒ Human factors engineering
ƒ Verification & Validation
architecture design ƒ Mechanical Design
ƒ Specifications Development ƒ Specifications Development
ƒ Specification development ƒ Molded part design
ƒ Regulatory Compliance Strategy ƒ Regulatory Compliance Strategy
Formulation ƒ Analysis & simulation ƒ Mechanism design
Formulation
ƒ ƒ Electronics Engineering ƒ Industrial Design
ƒ Design and Development Design and Development
ƒ ƒ Computer system design ƒ Concept exploration
ƒ System and software architecture System and software architecture design
design ƒ Specification development ƒ Analog & digital circuit design ƒ Product styling
ƒ Analysis & simulation ƒ Analysis & simulation ƒ Embedded software ƒ Human factors engineering
ƒ Electronics Engineering ƒ Electronics Engineering development ƒ Mechanical Design
ƒ Computer system design ƒ Computer system design
ƒ Analog & digital circuit design ƒ Analog & digital circuit design
ƒ Embedded software development ƒ Embedded software development

Past Present Future

Note: The activities listed provide a comprehensive view of the supply base, specific companies in India may already be involved in activities listed in the “Future” section
Source: Booz Demand Side Interviews, Booz & Company IC and analysis
Energy

Activities supported by ER&D supply base

continue to increase in the Energy industry

Offshored ER&D Activities-Energy

Blue, bolded text
represents new ƒ Feasibility and Conceptual Studies
activities in each ƒ FEED Studies
ƒ Geospatial application development & implementation
period ƒ FEA & CFD ƒ GIS Mapping Service
ƒ Design Automation ƒ SCADA/RTU
ƒ Manufacturing Engineering ƒ RoHS Compliance
– CNC and CMM Programming ƒ FEA & CFD
– Tooling Design ƒ Design Automation
– Others (service provider Management) ƒ Manufacturing Engineering
ƒ Technical Publications ƒ Technical Publications
– Illustrative parts catalogue
ƒ Field Services
– Assembly, Maintenance & Operations Manual
ƒ Plant Safety & Reliability
ƒ Conversions – Digitalization of paper manuals
ƒ Plant Revamp & Decommissioning
– Piping & Instrumentation Diagrams (P&ID) ƒ Field Services
ƒ Content Management
– General Arrangement Drawings' (GADs) ƒ Plant Safety & Reliability
ƒ Engineering Drawings
– Isometrics (Piping isometric drawing) ƒ Plant Revamp & Decommissioning
ƒ CAD Conversions
– As-Built Design ƒ Content Management
ƒ 2-D production drawings
ƒ 2-D production drawings ƒ Engineering Drawings
ƒ 3D Modeling (Plant 3D Visualization)
ƒ 3D Modeling (Plant 3D Visualization) ƒ Conversions (CATIA 4 to 5)
ƒ Laserscan & Plant Walkdown Capture
ƒ Digitalization of paper manuals ƒ 2-D production drawings
ƒ CAD
ƒ Laserscan & Plant Walkdown Capture ƒ 3D Modeling (Plant 3D Visualization)
ƒ Plant Operation Management
ƒ CAD ƒ Laserscan & Plant Walkdown Capture
ƒ Demand Response
ƒ PLM/PDM ƒ CAD
ƒ Plant Operation Management ƒ Plant Operation Management
ƒ Demand Response ƒ Demand Response

Past Present Future

Note: The activities listed provide a comprehensive view of the supply base, specific companies in India may already be involved in activities listed in the “Future” section
Source: Booz Demand Side Interviews, Booz & Company IC and analysis
Energy

Technology moving towards increased

energy efficiency and alternative methods of energy
production
Technology Trends and Potential ESP Involvement
Smart utility grids Real-time metering control In - home device control
Technology Technology
Technology Description / Potential ES Provider Potential ES Provider Potential ES Provider
Description / Description /
Potential Work Involvement Involvement Involvement
Potential Work Potential Work
ƒ Investment in grid ƒ Hardware ƒ Smart meter ƒ Mechanical / HW ƒ Devices are linked in ƒ Mechanical / HW
infrastructure that enables development programs where the engineering and to all home engineering and
real - time monitoring of ƒ Mechanical smart meters are design equipment that use design
energy consumption by end engineering installed at each unit ƒ Software energy ƒ Software
users ƒ Embedded software being served by the development ƒ Allows owners to development
ƒ Involves deploying ƒ Testing electricity company ƒ Testing monitor the energy ƒ Testing
infrastructure that allows ƒ Technology allows ƒ Documentation consumption by each ƒ Documentation
two-way communication two-way appliance in real-time
between the distribution communication to ƒ Could be
center and the meters which monitor energy programmed to shut
in turn would enable utility consumption on an down appliances at
companies to predict and hourly basis specific times of the
prepare for future demand ƒ Next generation day based on how
and supply patterns technology could the owner/ user
allow utility programs the device
companies to adjust
demand and supply
of electricity based
on time of day or
customer

Medium-term opportunity / investments required Immediate opportunity / Minimal investments

by Supply base to address these needs required by Supply base to address these needs
Source: Booz Demand Side Interviews, Booz & Company IC and analysis
 Infrastructure

Indian ER&D supply base steadily moving

up the value chain
Offshored ER&D Activities
ƒ Architectural Conceptualization Services
Blue, bolded text
ƒ Glazing and façade drawings
represents new
ƒ Welding Engineering Services
activities in each ƒ Materials Engineering Services
period ƒ Feasibility studies ƒ Feasibility studies
ƒ Geographical Information System (GIS) ƒ Geographical Information System (GIS)
ƒ Remote Sensing ƒ Remote Sensing
ƒ AutoCAD drawings ƒ AutoCAD drawings
ƒ Construction & Cost Estimation Services ƒ Construction & Cost Estimation Services
ƒ Change Management ƒ Change Management
ƒ Analysis for static load, seismic and wind loading ƒ Analysis for static load, seismic and wind loading
ƒ Structural Engineering & Steel Design ƒ Structural Engineering & Steel Design
ƒ Piping & Equipment modeling ƒ Piping & Equipment modeling
ƒ Reliability Assessment of Structures ƒ Reliability Assessment of Structures
ƒ CAD Design and Drafting
ƒ CAD Design and Drafting ƒ CAD Design and Drafting
ƒ Exterior & Interior 3D Rendering
ƒ Exterior & Interior 3D Rendering ƒ Exterior & Interior 3D Rendering
ƒ 3D Aerial View
ƒ 3D Aerial View ƒ 3D Aerial View
ƒ Transportation Design Analysis
ƒ Transportation Design Analysis ƒ Transportation Design Analysis
ƒ Construction Drawings
ƒ Construction Drawings ƒ Construction Drawings
ƒ Structural 2D drafting
ƒ Structural 2D drafting ƒ Structural 2D drafting
ƒ Architectural Layouts of Plumbing Fixture
ƒ Architectural Layouts of Plumbing Fixture ƒ Architectural Layouts of Plumbing Fixture
ƒ Site Utility Plan
ƒ Site Utility Plan ƒ Site Utility Plan
ƒ Mechanical specifications, drawings & calculations
ƒ Mechanical specifications, drawings & calculations ƒ Mechanical specifications, drawings & calculations

Past Present Future

Note: The activities listed provide a comprehensive view of the supply base, specific companies in India may already be involved in activities listed in the “Future” section
Source: Booz Demand Side Interviews, Booz & Company IC and analysis
Industrial Automation

Investments are being made to increase

complexity of service offerings to Industrial Automation clients
Offshored ER&D Activities
Blue, bolded text ƒ New product development
represents new ƒ ER&D (model building, algorithm evaluate/implement)
ƒ Simulator Software Dev for Optimization/Training
activities in each ƒ System Engineering incl. Architectural design
period ƒ Device Drivers, FDT-DTM Dev.
ƒ Obsolescence Protection ƒ Obsolescence Protection
ƒ Interoperability Issues ƒ Interoperability Issues
ƒ Process development & Reliability check ƒ System-on-Chip/ ASIC Development ƒ System-on-Chip/ ASIC Development
ƒ Mechanical Design ƒ Electronic Hardware Development ƒ Electronic Hardware Development
ƒ PLC Programming ƒ Real-Time Software Development ƒ Real-Time Software Development
ƒ SCADA ƒ Product Innovation for Succession ƒ Product Innovation for Succession
ƒ Panel engineering ƒ Process development & Reliability check ƒ Process development & Reliability check
ƒ Embedded product development ƒ Mechanical Design ƒ Mechanical Design
ƒ System Integration and Network Fit ƒ PLC Programming ƒ PLC Programming
ƒ Field Trials ƒ SCADA ƒ SCADA
ƒ Porting to New Hardware ƒ Panel engineering ƒ Panel engineering
ƒ Client Application & Host Application Software Dev. ƒ Embedded product development ƒ Embedded product development
ƒ Product Quality Check ƒ System Integration and Network Fit ƒ System Integration and Network Fit
ƒ Safety Critical Systems Testing ƒ Field Trials ƒ Field Trials
ƒ Internationalization and Localization ƒ Porting to New Hardware ƒ Porting to New Hardware
ƒ HMI/ GUI Software Dev. ƒ Client Application & Host Application Software Dev. ƒ Client Application & Host Application Software Dev.
ƒ Test Automation ƒ Product Quality Check ƒ Product Quality Check
ƒ Product documentation ƒ Safety Critical Systems Testing ƒ Safety Critical Systems Testing
ƒ Product maintenance ƒ Internationalization and Localization ƒ Internationalization and Localization
ƒ End customer services for Automation Implementation ƒ HMI/ GUI Software Dev. ƒ HMI/ GUI Software Dev.
– Client-Specific Customization ƒ Test Automation ƒ Test Automation
– Domain-Specific Customization ƒ Product documentation ƒ Product documentation
– System Integration on-site ƒ Product maintenance ƒ Product maintenance
– Commissioning, Acceptance tests ƒ End customer services for Automation Implementation ƒ End customer services for Automation Implementation

Past Present Future

Note: The activities listed provide a comprehensive view of the supply base, specific companies in India may already be involved in activities listed in the “Future” section
Source: Booz Demand Side Interviews, Booz & Company IC and analysis
Industrial Automation

The future opportunities lie in embedded

intelligence, wireless…..
Technology Trends and Potential ESP Involvement

Wireless Communication Embedded Intelligence Real - time monitoring

Technology Description /
Potential Work
ƒ Development of low cost
wireless products allowing
for more monitoring points at ƒ Testing
lower installation costs,
higher reliability and security
ƒ Wireless transmitters are
being installed in remote,
hard-to-reach areas allowing
for continuous monitoring of
critical parameters not
possible before
Technology Technology
Potential ES Provider Potential ES Provider Potential ES Provider
Description / Description /
Involvement Involvement Involvement
Potential Work Potential Work
ƒ Embedded software ƒ Development of ƒ Embedded software ƒ Real time monitoring ƒ Embedded software
development “smart” sensors and development software applications development
actuators that enable ƒ Mechanical deign is fast gaining ground ƒ Testing
ƒ Verification & them to respond to services to allow users ƒ Verification &
Validation signals without the ƒ Testing & verification monitor, analyze, Validation
involvement of the optimize, and adjust
centralized control business processes
systems in real time
ƒ Sensors carry out ƒ Enables
specific quality organizations to
processes to reduce improve customer
human error service, reduce
inventory & risk and
lower processing
costs

Medium-term opportunity / investments required Immediate opportunity / Minimal investments

by Supply base to address these needs required by Supply base to address these needs

Source: Booz Demand Side Interviews, Booz & Company IC and analysis
Industrial Automation

…..and robotics involving higher levels

of automation
Technology Trends and Potential ESP Involvement

Robotics Fieldbus
Technology Description / Potential ES Provider Technology Description Potential ES Provider
Potential Work Involvement / Potential Work Involvement

ƒ With the rapidly increasing
processing power and advanced
intelligence, robots are
dramatically increasing their
potential as flexible automation ƒ Testing and verification
tools
ƒ Robotic technology is converging
with wide variety of
complementary technologies —
machine vision, force sensing
(touch), speech recognition and
advanced mechanics
ƒ Embedded software ƒ Digital 2-way multi-drop ƒ Application engineering
development communication link of fieldbus devices
ƒ Mechanical deign among intelligent ƒ Plant level integration
services measurement and supplier to end
control devices customers
ƒ Fieldbus is expected to
reduce the life cycle cost
of production line and of
the total plant
ƒ Allows integration of
devices from multiple
suppliers without custom
software

Medium-term opportunity / investments required Immediate opportunity / Minimal investments

by Supply base to address these needs required by Supply base to address these needs

Source: Booz Demand Side Interviews, Booz & Company IC and analysis
 Construction/Heavy Machinery

Complexity of work offshored to service

providers has seen a steady progression over time
Offshored ER&D Activities
ƒ Concept development for future products
Blue, bolded text ƒ Vehicle Stability/ Tolerance Stacking
ƒ Assess Overall Program Risk
represents new ƒ Assure Comprehensive Feasibility
activities in each ƒ Mock Ups
ƒ Sustenance engineering support
period ƒ
ƒ Develop Design FMEA service provider Management
ƒ CAE Analysis/Simulation and Meshing ƒ Develop Design FMEA
ƒ Hydraulic Design ƒ CAE Analysis/Simulation and Meshing
ƒ Hydraulic Design
ƒ FEA Analysis
ƒ FEA Analysis
ƒ Develop Test Strategy & Plan
ƒ Develop Test Strategy & Plan
ƒ Develop Process Design
ƒ Develop Process Design
ƒ Updating vehicle designs for meeting emission norms ƒ Updating vehicle designs for meeting emission norms
ƒ Develop Workstation Designs & Operation Descriptions ƒ Develop Workstation Designs & Operation Descriptions
ƒ Develop Vehicle Build Plans ƒ Develop Vehicle Build Plans
ƒ Conduct Design Verification, Production Validation ƒ Conduct Design Verification, Production Validation
ƒ Develop Vehicle Packaging and Design ƒ Develop Vehicle Packaging and Design
ƒ Database Management ƒ Database Management ƒ Database Management
ƒ Conversion from major CAD platforms ƒ Conversion from major CAD platforms ƒ Conversion from major CAD platforms
ƒ CAD ƒ CAD ƒ CAD
ƒ Test Fixture Design & Planning
ƒ Test Fixture Design & Planning ƒ Test Fixture Design & Planning
ƒ Competitive Benchmarking (Non-Teardown)
ƒ Competitive Benchmarking (Non-Teardown) ƒ Competitive Benchmarking (Non-Teardown)
ƒ Embedded Software Code/ Testing
ƒ Embedded Software Code/ Testing ƒ Embedded Software Code/ Testing
ƒ Technical Documentation & Translations
ƒ Technical Documentation & Translations ƒ Technical Documentation & Translations ƒ Engineering Change Management
ƒ Engineering Change Management ƒ Engineering Change Management ƒ Homologation & Regulatory Affairs
ƒ Homologation & Regulatory Affairs ƒ Homologation & Regulatory Affairs ƒ E-BOM Management
ƒ E-BOM Management ƒ E-BOM Management ƒ BIW Design
ƒ BIW Design ƒ BIW Design ƒ Module Design
ƒ Module Design ƒ Module Design

Past Present Future

Note: The activities listed provide a comprehensive view of the supply base, specific companies in India may already be involved in activities listed in the “Future” section
Source: Booz Demand Side Interviews, Booz & Company IC and analysis
Construction/Heavy Machinery

The future opportunities lie in technologies

and innovation in the electronics area
Technology Trends and Potential ESP Involvement

Environmental Compliance Remote controlled equipment Auto-Manual Transmissions (AMTs)

Technology Technology
Technology Description / Potential ES Provider Potential ES Provider Potential ES Provider
Description / Description /
Potential Work Involvement Involvement Involvement
Potential Work Potential Work
ƒ Customization of product per ƒ Mechanical design ƒ Integrating advanced ƒ Embedded software ƒ Shift to auto-manual ƒ Feasibility studies
local requirements changes motion and sensing development transmissions for ƒ Virtual simulation
ƒ Hybrid powertrains to ƒ HIL testing technologies for ƒ Mechanical deign ease-of-use, fuel ƒ Testing and
comply with city / state ƒ System level safer operating of services efficiency and verification
regulations validation of mining equipment ƒ Testing and purchase costs
ƒ ER&D into alternate fuels Powertrain ECU ƒ Global positioning verification
like biodiesel to meet ƒ Development of systems and ƒ RFID application
upcoming ASTM standards Powertrain software to track and development
embedded control manage construction ƒ Embedded software
systems equipment including applications
ƒ Feasibility studies tracking vehicles, development
ƒ Virtual simulation monitoring fuel
ƒ Testing and usage, operator
verification usage, maintenance,
etc

Medium-term opportunity / investments required Immediate opportunity / Minimal investments

by Supply base to address these needs required by Supply base to address these needs

Source: Booz Demand Side Interviews, Booz & Company IC and analysis