GIRISH CHADHA The Economic Times Online Printed from economictimes.indiatimes.com
What is common between a 400-unit housing scheme in Maryland, US and a 200-block residential complex in The Netherlands? Both schemes are among the several housing and commercial complexes for which the basic land development and designing has being carried out by Indian architects and civil engineers in India. As the country moves up the value chain in the knowledge process offshoring (KPO) domain, several companies that cater to the architectural, civil engineering and land development requirements or in short, the brick and mortar project design needs of overseas clients have cropped up. A typical start-up in the land development sphere is New Delh-based HS Consulting, a joint venture between US-based $2.5-million Harris Smriga & Associates (HSA) and India-based Taj Design Services. The four-month old company is catering to the captive infrastructure construction design needs of HSA. For the US, the single largest market for such services, the need to tap India and other overseas destinations for carrying out civil engineering and architecture design works is not purely bottom-line driven. With the information technology sector witnessing good growth in the past several years, there has emerged a shortage of civil engineers in the US. Companies in the industry had to look outwards in order to deliver projects in time to their clients, say industry insiders. But, what began as an experiment for US firms is turning out to be a good business opportunity for Indian companies in the space. Though accounting for a fraction of the $750-million overall KPO market in India at the moment, existing companies are stepping up efforts to tap growing outsourcing requirements of clients. With the US undergoing a realty boom, orders are flowing in for designing both commercial and residential properties, even some mini-townships. Outsourcing contracts are also coming in from Europe, Dubai and Singapore, claim industry insiders. "The fear of US firms related to training of civil engineers and architects and knowledge of local by-laws while handling projects to Indian companies is slowly disappearing. Our company has handled several small projects and is now poised to deliver a 400-unit housing scheme spread over 70 acres," says HS Consulting CEO Bharat Bhargava, who came back to India to set up the firm after working in the US for several years. There is no doubt that the Indian community of architects and civil engineers is well respected in the US. The statement is also corroborated by the fact that two of the world's top names in engineering, construction and project management/maintenance sphere - Fluor Corporation and Bechtel have set up their local offices in India to cater to their worldwide clientele. The Indian companies are vying for a piece of the pie that is estimated to be worth several billion dollars in the US alone. The size of the overall market can be gauged from the fact that an industry estimate puts the land development and related design works in the Washington DC area alone at $300 mn-$500 mn annually. Also, 300,000-odd US jobs related to architecture, transport and civil engineering design are being outsourced to several countries with India estimated to be a major gainer. Overseas companies are also able to cut costs drastically, often as high as 50%-60% by outsourcing to India. Companies in India are charging clients anywhere between $5-$8 per man hour for small projects to $15-$25 for bigger ones, whereas the cost of getting the same work done in the US ranges from $60-$100 per man hour. Also, with each successful project, the comfort factor of the foreign clients is increasing while getting work outsourced to India. "Our projects are completed taking due note of the ecological and aesthetic aspects of the area as well as thinking of the needs of the community for, say, next 50 years," says an architect in an Indian company catering to the US market. "The design drawings and construction drawings that we make have to get the approval of the local counties in the US, so we need to know about the local land laws too," the architect adds. Like a usual BPO, clients in the US or elsewhere, do not often come to know that the actual work is happening across the world in India. Some US companies have opened their local subsidiaries here too and are passing on work from various customers. The local office in the US acts as the front-end and sources contracts, sends specifications and comments to the Indian subsidiary or BPO and then steers the Indian company through the project as per the client's requirements. With the scope of work growing, several companies have started providing computer aided design (CAD) services to the construction and civil engineering sector including contractors, engineers, builders and architects abroad. Even freelancers are joining the bandwagon, servicing smaller clients that some of the bigger players do not take up, industry insiders add. Going ahead, companies like HS Consulting are thinking of ramping up their operations to cater to growing projects. "We are looking to raise the headcount in India from the existing 8-10 employees to between 50 and 100 by end of the year," says Bhargava. Adds CAD Softech Overseas Pvt Ltd's -- which caters to residential project design needs of clients in Europe -- Amit Gulati: "We have been doing captive work for one major client, but would like to expand our scope of work." Knowledge process outsourcing (KPO) industry in India is catering to client needs in areas of equity research, finance and insurance processes, data search, human resource development, engineering and design and medical content development. Business research firm Evalueserve had last year estimated that India can grow its KPO market to $12 bn by fiscal 2010 from existing $720 mn. So, the next time you visit a relative's apartment in a US city or go mall shopping somewhere in Europe, you may be stepping in to something which was designed back home. -------------------------------------------------------------------------- | Goa - 2005 Santosh Trophy Champions | | | | Support Soccer Activities at the grassroots in our villages | | Vacationing in Goa this year-end - Carry and distribute Soccer Balls | --------------------------------------------------------------------------
