Re-engineering ER&D with Digital

While the overall global ER&D spend has remained flat in the last 12 months but the
disruptive forces of digital hasnt spared this sector either. The definitive shift in R&D spend
from products to software applications has been happening in a progressive manner.
And parlayed, because of two factors: The ubiquitous presence of embedded software
which provides network connectivity reliably and inexpensively, coupled with the
emphatic need of organizations to differentiate, drive competitive advantage, add
newer revenue streams and keep customers happy.

This is not to imply that embedded is the only change taking place. Some of the
traditional engineering behemoths (GE is a classic example) have reoriented
(imagination at work?), invested heavily in software platforms to re-position themselves
as digital industrial companies. This lends heft to the commonly bandied argument of
futurists, that of every company becoming a software (company) eventually. Inasmuch,
the humongous data generated by billions of interconnected devices is being captured
and analyzed for more effective service delivery. Data-driven insights can be drawn from
the entire range of operations. It aids engineers to quickly respond to production
changes with greater precision while tightening quality standards and scheduling
predictive maintenance far more efficiently.

As an aside, consider the meteoric rise of consumer internet brands like Amazon, Apple,
Google and Facebook. From being startups to attaining leviathan proportions was but a
work of 10 15 years. Not surprisingly, their market-facing journeys started with coarse-
grained demographic models. As they expanded, their access to buyer preference data
increased at an exponential rate (some even opine, alarming) and look where they are
all today. The coarse-grained models of yesteryears have transformed into highly
sophisticated Analytics-driven tools which pinpoint group affinities and behavioral
causalities to carve out exactly what the individual requires. The room for error is so low
that it has attained almost mythical proportions which only soothsayers can match.

The OEMs today are evenly placed. Either they leverage industrial data, build
partnerships with ecosystem players and move up the proverbial value chain or banish
the thought and vanish into oblivion before you can say Jack Robinson. Globally, the
OEMs are exploring digital in considerable depth and it reflects in the kind of people they
are hiring software engineers are being nudged out by mechanical (engineers); it isnt
a rarity anymore and gradually this trend is picking up. In India, the OEMs have been
focused on developing in-house applications but they realize that this strategy can yield
only limited results. The Indian startup ecosystem is vast and very powerful ranked third
in the world - so why not leverage it? Increasingly, the collaborative approach between
OEMs and startups is also being explored. There are more than 250 startups in India which
specialize in niche technologies such as Industry 4.0, predictive / prescriptive analytics,
robotics, AI etc. In India, the ER&D domestic opportunities remain largely under-explored
and it is reasonable to expect that there will be a significant growth in the medium long
time range.
IoT has caught the world by storm and in India too its expected to grow by leaps and
bounds accentuated by the sheer number of connected devices (eventually) and the
governments invigorated drive towards a digital agenda. By using sensors, diagnostics
and users interaction data, firms can get detailed inputs on consumer behavior which
can be used to make necessary changes in products, perhaps even real-time someday.
To reiterate, data-driven decision-making will be of great use to engineering firms and
will help them anticipate consumer preferences. Ultimately, it will reflect in faster go-to-
market operations as supply chain adjustments are effected at a much faster pace.

Things just dont happen in a vacuum, they have to be fostered and its no different for
IoT. NASSCOM already has a fully operational CoE IoT but given the size of the market,
we need many more. Besides energizing R&D, these labs will be tasked with creating
innovative applications across domains to address the nations varied needs especially
in the areas of Smart City, Smart Healthcare, Manufacturing and Agriculture.

If we are to emerge as an engineering hub then surely we must reduce our import
dependency.