Engineering services Ecosystem

Engineering services Ecosystem

As we see a lot of M&As on the rise, the way businesses evolve these days are certainly a great shift from what we have witnessed since the last two decades. M&As are driving more capabilities in business ecosystems which is always for the greater benefit of the companies. This also brings us to think whether M&A is the new R&D in these ecosystems. Why invest in a new technology while it could be acquired along with several other capabilities?

 

To put things into perspective, let us dive into the realm of engineering service companies. These companies typically outsource a particular set of services (engineering design, supply chain solutions etc) across a broad range of industry verticals. For example, if we consider the automotive sector, these companies tend to fall under the category of Tier II service providers. But with the automotive sector having the largest number of outsourcing activities, there lies a great opportunity for engineering service companies to increase their capabilities and drive growth. Currently, one of the areas OEMs are focussed on investing in is the embedded electronics domain. We suspect the race towards a future of connected cars could be driving this effort. Therefore, what if a Tier II service provider could view its ecosystem and see where there is potential capability that it currently may not have? What if it could acquire its way up to become a Tier I engineering service provider itself?

 

Analysing business ecosystems are critical for growth and sustainability of existing and modern businesses. Ecosystem analytics can not only help business leaders identify gaps in their capabilities, but also identify opportunities in the ecosystem their organizations belong to. Knowing when and where to make an investment, will help business leaders get a broader understanding of their ecosystems and thus enable them to take better business decisions in order to get an edge in the current competitive landscape.