by Jean Thilmany, Contributing Editor
Outsourcing CAD drafting and design can boost a company’s productivity, but firms looking to outsource should ask some questions and do their own research before moving CAD work out of the company.
Thanks to technological advances, more companies are outsourcing work, according to a recent Deloitte Global Outsourcing and Insourcing Survey. Engineering companies are certainly part of that trend.
Today, engineers and CAD drafters can take advantage of CAD in the cloud, which offers access from anywhere and allows users to receive and work with up-to-the-second information. Also, engineers can now pass designs and ask for feedback through sharing sites like Dropbox or product lifecycle management systems.
The nature of the systems themselves allows CAD work to be more readily outsourced—or done by in-house temporary workers—than other engineering jobs, says Sandesh Joshi, president and co-founder of Indovance, which provides CAD outsourcing services.
Engineering companies can also buy licenses that give them access to CAD software on a short-term basis. These types of agreements include the Desktop licenses from Autodesk and similar-type license from Solid Edge and other CAD companies.
It’s tools like those, including online forum software, that lead at least one expert to believe mechanical engineers themselves will be able to act as free agents in the not-too-distant future, moving from one company to another when a project ends.
But before that happens, outsourcing the simpler aspects of CAD drafting and design remains a big part of many engineering company’s business plan, Joshi says.
Indovance, of Cary, N.C., has seen its business revenues grow by 50% in 2014 and again in 2015. Joshi, expects that trajectory to continue, with his firm forecasting a 50 to 60% revenue growth in 2016.
So what’s driving the trend toward outsourcing CAD work? Joshi has an easy answer.
“The growth in CAD outsourcing is a direct result of the recession of a few years back, which changed the mindset and opened people up to different ways of doing business,” he says. “Teams are leaner and productivity is measured more closely now.”
CAD projects are the most outsourced jobs at engineering and manufacturing companies today, he says.
“Companies have reinvented their business model to focus on what they do best and contract out everything else,” he adds. “Our clients are focused on building core teams, that’s been the trend since after the recession.”
Mark Jakiela, a professor of mechanical design at Washington University in St. Louis, says that engineering firms could cut costs even further by hiring temporary, or freelance, engineers to work on single company projects. When the project ends, the company could compile an entirely new staff of freelancers (or keep some of the best performers) for the next job.
Freelancers could have more employement opportunities, as they could work on nationwide, even international, projects from home, Jakiela says. Meanwhile engineering companies would pay fewer costs in long-term benefits, employee perks, and office space.
The researchers at Washington University are investigating the best type of software for freelance engineers and the companies they’d freelance to. The researchers studied how engineers at large equipment manufacturers worked together on product development.
Those studies lead them to think freelance mechanical engineers would work best together through what they call web-based user communities. They’ve determined forum-based software—in which a poster begins a conversation about a project and others involved with the project respond—would best meet user and company needs, Jakiela says.
Now they’re looking at the specifics of how such a forum needs to function, he adds.
“The real value is in the process,” Jakiela says. “The software itself is not radically new.”
Until freelance engineers become commonplace, most companies that need extra help look to offload some of their organizations’ simpler CAD work, says Charlie Seymour, president of the Raleigh, N.C.-based CAD Designs Inc.
Temporary CAD workers boost engineering companies’ productivity, he says. He advocates calling upon temporary workers from a local or nationwide agency, like his own, which places skilled CAD designers and drafters across the nation. Companies who use contract CAD workers onsite at their U.S. locations must comply with federal rules for temporary workers, he adds.
Engineering companies need to have an agreement with the temporary worker that outlines benefits they’ll receive and compares them to the benefits permanent workers receive, Seymour says.
“Temporary workers should feel just as valued as their permanent counterparts, or else productivity is stalled,” he says.
The worldwide availability of popular CAD tools, mean, however, that outsourced CAD projects needn’t be done within the United States, Joshi says.
Outsourcing companies like Indovance can purchase the needed CAD software and train users.
Also, engineering design software is flexible enough for use across time zones and project type. Indovance has carried out projects in the mechanical and civil engineering industries as well as for architects and graphics providers, Joshi says.
Indovance’s more than 120 contractors have a four-year engineering degree, mostly from universities in India, and contractors often speak English, he adds.
“Our clients leverage us to do the front-end project manufacturing or design work and that’s attractive to the end customer,” he says. “That’s where we can boost our client’s productivity.”
For example, an oil-industry client sends its in-house engineering team onsite to determine project requirements, as initial designs and concepts are difficult to work out remotely, Joshi says.
“But once those initial parameters are figured out, then a lot of the work will be back-office and that’s a great candidate for us to be involved in,” he says.
Of course outsourcing isn’t without its cautions.
Rebekah Campbell, chief executive of Posse, which makes an app that stores users favorite or “to-try” restaurants, shops, and travel locations, wrote in the New York Times in March 2014 about her own experience with outsourcing app developers.
“I started with an idea for an app but lacked the knowledge or money to hire my own developers, so I outsourced,” she wrote in an article titled “What I Learned (the Hard Way) About Outsourcing.” First, she went with a local company that did some development work in house and outsourced other aspects of it to India.
“I never spoke to the Indian team, which had no clue about the business problem the app was intended to solve; they simply received instructions from guys who didn’t really care about my project. The result was a buggy product that crashed constantly,” she wrote.
After raising her first round of financing, Campbell hired two in-house engineers and a team in India. She hired the U.S. engineers for around $100,000 a year each, while the total for six full-time engineers in India was $180,000 a year. The local engineers spent significant time writing specs for the India team; still the returned code was filled with mistakes, she wrote.
Eventually, Campbell found success with outsourcing software development to the Philippines after overseeing hiring herself.
The 2014 Deloitte study found that, like Campbell, companies “consider locations that have a reputation for high service quality and lower cultural barriers. Countries with an educated technological workforce, language capabilities, stable currency, and stable technology infrastructure are potential candidates for offshoring.”
India does match that description, says Joshi, who received his bachelor’s degree in mechanical engineering from the Indian Institute of Technology Bombay in Mumbai, India, before moving to the United States, where he received a master’s degree in engineering with a focus on CAD from North Carolina State University.
Because he’s from India, yet has lived in the United States, he’s in a good spot to hire his contractors in India, check out their background and experience, and understand U.S. company needs, he says.
His company also maintains the same team across an engineering company’s projects.
“For remote outsourcing to work well it’s important to have the same team working on projects one after the other,” he says. “It’s important to go through the handshake between the companies, so it’s more like a partnership.”
In fact, Joshi views his staff members as a “virtual extension of the client team.” And that means his clients dictate how its engineers choose to pass CAD files back and forth. Usually, that means adapting to how the client team has exchanged files in the past, or will exchange files on this project.
The usual exchange methods include Dropbox, virtual private network (VPN), file transfer protocol (FTP), or product lifecycle management (PLM) systems.
If the client does have a PLM system in place and opens it to include Indovance contractors, that’s the method Joshi’s staff members use. Often, the client or Indovance itself will provide a quick training session on the system.
“From a security and privacy point of view, we want to stay within the client’s server systems rather than bringing client data on our central server,” he says.
Companies that perform CAD projects for engineering firms want more work from those firms. So they’ll do the job correctly—meeting specs and keeping all information private, Joshi says.
But ultimately, the decision to outsource CAD drafting and design work—or to bring in temporary CAD workers—depends on the nature of the engineering company’s business, the project itself, and its past experiences with outsourcing, he adds.
Engineers may or may not be free agents in the future. For his part, Joshi is sure companies will still be outsourcing some of their CAD design and drafting projects in that future. Even many engineering companies have rebounded after the recent recession. The outsourcing trend isn’t going away anytime soon, he says.
“It just helps their bottom line and their productivity too much for them to turn away from it,” he says.
