Building and managing a global engineering organization

Pratistha Suhasini June 1, 2016

Growth.jpgEngineering continues to remain a core competency to machinery manufacturers and product intensive companies. Owing to the increased globalization of markets, the software engineering and development industry has seen enormous growth in terms of spreading operations across locations where as engineering has been relatively closely guarded.

But many companies have tried their hands at trying the same formulae for engineering too. The teams have been exposed to various models of engagement and governance. These models are greatly influenced by the business goals and strategies of their organization.

Apart from reducing operating costs and profit making, the current challenges faced by companies are to bring about the need for their product/service in the market. This in turn makes the engineering intensive companies to hunt for newer options in order to keep the pace on and sustain themselves and carving a niche in their respective market space. One such trend setting engagement model has been the evolution of “Global engineering teams”.  These virtual engineering teams are the extended branches of the core team and operate across various locations and markets.

scaling_engineering_capabilities.jpgCompanies have started looking for greener pastures eyeing the global talent pool as well as deriving benefit of balancing their overall costs incurred. This kind of fusion of engagement models is giving the teams an all-round exposure as well as back up for surging times.

Even though these models have been time tested in the software and product development field, these are relatively less heard of the engineering domain. So as the companies are increasingly becoming open to such models, the engineering organization is getting introduced to broader domains. These engagement first hold few challenges before being implemented.

  • What are areas where we need support?
  • Where would be the ideal location?
  • Who are going to choose for such an association?
  • How are going to manage the engagement?

The areas for support could be your day to day engineering jobs or certain specialized ones for which you are looking for specific skills. The ideal location could be based on the newer markets the company is looking to penetrate into as well as the balancing the overall costs. Such associations could be engineering partnerships with local and global players.

People.jpgMoreover, while operating in a new market location, knowledge of the local markets, competition, legal and cultural issued need to be extensively researched upon. They can have captive centers in the respective locations.

In such cases, companies can also partner with local vendors skilled in the required domain where they can opt for having teams working solely for them in the vendor’s location. With time and results, these teams can be transitioned into their organization and operate as an offshoot in their new location.

But, there still exists a certain degree of complexities in the area of managing such teams which are spread over global locations but under working for the same organization cloud. Managing virtual teams, streamlining their output with the business goals, IP and data security, communication with them as well ensuring the standards of operation and quality of deliverables, poses various challenges for the engineering department. The decision also needs deep understanding of the cultural and legal affairs of the location.

All these shortcomings can be overcome by a suitable vendor partnership in the market of operation. The company can have their engineering team staffed, developed and maintained by the vendor from its location under the guidance of the central teams.  

Another engagement currently gaining a lot of attention is the BOT (Build-Operate-Transfer) model where the entire operations are provided by the vendors for a period till the organizations is stable enough to operate independently under the umbrella of the parent company. It answers all the problems arising out of the decision to have local operations globally. This is essentially a win-win situation for both parties.

In such arrangement the company can opt for having both a centralized as well a decentralized structure of communication. To start with, the new location would need a lot of handholding which the partner will also support in to take care of. Gradually as it evolves, the structure can be decentralized for the ease of operations and it can move out to be an independent entity of the parent.

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Topics Globalization Competitive Advantage Global Engineering Centre