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 brick and mortar- i.e architectural, civil
engineering and land development- project design
needs of overseas clients have cropped up.
A typical start-up in the land
development sphere is New Delhi-based HS Consulting,
a joint venture between US-based $2.5 mn 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.
Through accounting for a fraction of the $750
mn 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.
