Talk about strategic acquisitions, and Tata Technologies’ recent decision to acquire the US-based Cambric Corporation stands out as a prime example. Valued at $ 32.5 mn, the acquisition is likely to help Tata Technologies gain greater presence in the global construction and heavy equipment sector, aided by its access to 450 additional engineers in the US and Romania.
Along with the automotive and aerospace industries, the construction and heavy machinery industry forms the core of Tata Technologies’ business. Over the years, the leading global provider of engineering services and manufacturing enterprise IT, has built depth of experience in these areas to deliver innovative, relevant and differentiated solutions to its clients.
At the sidelines of a recent NASSCOM (National Association of Software and Services Companies) event in Bangalore, Auto Tech Review spoke to Samir Yajnik, President, Sales and Chief Operating Officer, Asia-Pacific, Tata Technologies to understand the way forward for this industry, and the company’s role in aiding that growth.
For the record, Yajnik chairs a Special Interest Group (SIG) on Construction & Heavy Engineering under NASSCOM. The group was formed in September last year with objectives of bringing about awareness about the sector in India, and the development of a talent pool for this sector. The growth potential of the C&HE sector, which is set to grow about six times from the current $ 4 bn to $ 24 bn by 2020, is more than commensurate, Yajnik said.
Of late, the industry has witnessed a few companies looking at fundamentally redesigning or redeveloping their products for the Indian market. Larger players like JCB and Caterpillar too are re-positioning their products for the Indian market. This is a departure from the earlier position of bringing in products from the west, and homologating them to try and meet demand in India.
“What’s now dawning upon them is that they need to redesign. They are slowly re-positioning themselves with their parent companies (western and eastern companies). To redesign products, you need to have a much richer product development base, not just by homologation and doing low-end stuff,” Yajnik reasoned.
With Indian organisations though, including PSUs, the larger issue is their low-end quality and standard of products. There are ambitious players in the market, but they have no engineering strength. That is where Yajnik believes the Cambric acquisition, among other things, will help Tata Technologies build a compelling proposition, not only for the global market, but specifically for the Indian market (India-for-India) as well. Cambric’s domain expertise in the areas of powertrain, overall systems engineering, and hydraulic systems, for instance, would help the company make a proper full-vehicle impact.
THE NASSCOM ROLE
NASSCOM’s SIG of C&HE is focussing on four key aspects – developing a talent pool, use of analytics or advanced engineering, use of more systemised standards and innovation. The SIG is focusing on branding the C&HE sector better, so as to have better pull within engineering students. Secondly, it is aiming at using product analytics and advanced engineering to make products compliant. “Essentially, this in an industry where you can re-position your products, not only by doing a lot of tear-down and bench-marking, but also looking at trends of how these products need to be positioned, what are the new compartments of industry space that are emerging.”
The third key aspect is about non-application of uniform standards. In most cases, standards are not according to the Indian context. The SIG would strive to have a systematic approach to either agreeing to time a certain standard correctly, or even lobbying to say the standard is not needed, he said. The fourth key area is innovation, where efforts would be to bring in technology partners (like Cambric) in a forum and showcase what’s happening around the world – best technologies, best practices, best process practices, best system engineering approaches, etc.
There is an urgent need to provide the right impetus to the C&HE sector, especially in the areas of talent and innovation. While government policies are unlikely to favour the C&HE industry dramatically, Yajnik believes it would certainly give an impetus. “There must be some connect between the work that goes on in PSUs and bring that work and technology through universities as IPs that can be applied. Even standards should be set sensibly to help the sector, by having norms adhering to the Indian context,” he said.
To build a technical roadmap for the industry, it is important to develop and apply test and validation capabilities, along with the use of product development technology, embedded electronics, enterprise IT technology and other emerging technologies like cloud computing and mobility, which are concerned with running the business, he concluded.
Text: Naveen Arul