According to a recent report from European Automobile Manufacturers Association (ACEA) 12.5 million Europeans work in its automotive sector directly or indirectly. This massive number clearly represents that Europe’s Automotive sector alone holds 5.7% of total EU’s Employment to their credit. This is truly a great achievement for this industry in EU. The Automotive sector, being one of the top industries in EU and one of the best in World, is not only responsible for contributing substantially towards its powerful economy and job creation but the industry also provides necessary motivation & opportunity that will lead to Innovation in the existing models of business in future.
We say “Innovation can be defined as a continuous process which focusses to bring out the best in business models or improvise on the existing models using the thoughts of today and past experiences to make a perfect blend of business with evolving technology.”
It is very important to maintain proper connection between industry and technology to tap the latter’s full benefits which will go un-noticed if one does not take a note of the fact, how technology can help to scale up their business at new heights. This step will also help companies in sustainable development. A great example of excellence innovation in this regards is Tesla (an American Automaker) which starts to revolutionize the Automotive industry with Electromobility being one one of its core competencies. Another burning example is Google’s self-driving vehicles which is totally based on sensors and software coding. These business areas were possible only because of Innovation. Consequently, these technologies will force the other players in market to change their line of work. Future cars will be connected not only to monitor, in real time, its own working parts and the safety conditions around it, but it would also be able to communicate with other vehicles and with an increasingly intelligent roadway infrastructure. In the long run this will help to safeguard our environment, our infrastructure and furthermore save lives.
In short, “Innovation by tapping technological resources is a key to sustainable development.”
The automotive sector is not the only sector, consumer durables, utilities sector and plant manufacturing sector also provide immense opportunities for innovative services that can complement their actual business. This gives an edge to their business in comparison to competitors and adds value to customer’s money spent, thereby strengthening their position as a pioneer in providing innovative services along with their products offered.
The IT Managers, VP, Technical Directors and other stake holders can very well understand the growing opportunities for software and the rising trends in these potential industries. They should definitely take the help of technology for tackling the problems as well as challenges in today’s competitive, IT dominated world. It is very well cited in an article by McKinsey that nowadays, software codes are used more in some cars than in a MACbook. This trend will continue to grow in future to provide customers the best experience they ever had before. The manufacturing industries in EU has not only contributed strongly towards its economic growth but it has also created a platform for itself to emerge as a technology driven economy in the world. This factor has proved to be a catalyst towards growing GDP of EU. A report from BSA reveals that Software alone is catalyst for driving EU’s Economy by € 910 Billion.
Fig 1: How EU can take advantage of software Potential by BSA.org
It would be right to mention here that along with the rising demand for Software in non-IT industries, the demand for software engineers, IT specialists, Computer Engineers and researchers in EU has increased many folds during the past few years. This factor is also encouraging students to opt for computer science engineering over other courses. However, sad part of the story is, recruiters in EU are facing challenges in hiring and retaining candidates with most in-demand skills. This means that no matter opportunities for IT professionals, software engineers, EEs, Computer engineers in EU are growing but there are not enough qualified professionals to fill those vacant positions in organizations. This is where companies can take help of Outsourcing Software Development at onshore, nearshore and offshore locations. If implemented properly, outsourcing of software development will greatly help in reducing the gap between demand and supply for software architect, software engineers and other technical skill profiles.
Despite having required provisions for Innovation that can help make EU a technology driven sustainable powerful economy there are some hurdles in EU’s path for achieving this glorifying success. Few underlying problems on which pliXos (a German headquartered provider of solutions to automate and standardize Global Software Outsourcing) agrees with McKinsey for EU to become the next big contender for IT/Software Development hub are stated below:
- Challenge of rising gap between demand for skilled IT Engineers and the less number available to fill open positions:
According to a report from Czech College the IT sector in Europe is going to face a shortage of 9,13,000 skilled technical professionals by 2020 with shortage in 2015 stated to already have been 5,09,000. This rising gap will go on increasing if not addressed within the right time. Most of the companies who proclaim that they offer innovative software solutions along with their products are finding it very challenging to recruit a qualified computer science graduate with right skills to join their organization. If we keep aside the immigrant talent from other countries the region does not produce enough computer science engineers to serve for the growing demands of market.
Here, we at pliXos think to be of help:
After a robust research of the prevalent situations in EU the founders of pliXos created a free B2B Marketplace which gives customers access to a global list of preselected SW Service providers. Customers can filter by skills, regions, providers size etc. and run tenders to identify their best choice. Not only this, the B2B Marketplace is also integrated with other pliXos tools which will help the customers to lower down their load of project IT Outsourcing Governance, for tracking the progress, forming strategies etc. Thus pliXos has tools to provide Automation in almost each step of software outsourcing and vendor management. This way the B2B Marketplace and the other Software-as-a-Service (SaaS) tools helps the customers in saving huge amount of money which would have been than spent on searching for right vendors, forming Outsourcing Strategies, processing of Tender documents, legalities in a geographically distant location where the customer is interested to Outsource Software Development and related work in IT domain.
Recently Spring 2017, pliXos helped a German player in Automotive SW to start a nearshore operation with a provider in Ukraine. Done right, the long term goal might end up in doubling the current development capacity by global SW sourcing.
- Strategic Planning for implementation of robust software infrastructure across entire enterprise:
The manufacturing industry in EU should give impetus to strong software solutions if they wish to enjoy benefits which can never be possible with traditional old school business models. In other words, companies should row their boats in the currents of digitization and redesign their existing business models to stand strongly in the global markets. Just offering the core business products is a thing of the past. If companies do not take serious steps towards technology it would be too late for them to make a marked difference in global markets. Again, one can achieve this by employing skilled SW engineers.
This is again where pliXos provides an online platform in the form of B2B Marketplace that helps companies to outsource software/application development projects to trustful service providers across Europe, Asia and other parts of the world. Besides dealing with large corporations or mid-sized customers, we have met several Startups and helped them to understand how to outsource software/application development successfully.
- Talent Retention Strategy:
The talent shortage problem in EU is real but the root lies in the fact that companies fail to retain skilled IT engineers. This makes the problem graver. Organizations can address this growing challenge of recruiting and retaining the software engineers in their companies by restructuring their organizational culture to provide a more positive and friendly work environment and a sense of job satisfaction to its employees. This also instigates a sense of security to the employees and they tend to continue in the same organization for a longer period of time. Not only this, companies should also provide provisions for the employee’s professional development by means of further training, employee exchange programs etc. in order to keep their workforce well acquainted about the latest developments. This makes the employees precious assets of the organization. pliXos totally agrees with the work of McKinsey on why the best talent joins and stays in the company.
Fig 2: McKinsey’s work on factors governing Top Talent Retention by companies
The manufacturing sector in EU is undoubtedly one of the best in world and has many success stories owing to their strong position. But if they want to be competitive and emerge as leaders and foster Innovative IT solutions for future to improve their prospects of becoming a global leader in software development they need to come together along with the Government and contribute strategically for the betterment of the region as whole. Specific measure which can be thought of are
- Government funded higher education
- Give equal opportunities to both men and women which will decrease some gap in demand and supply of skilled software talent
- Welcome talent from abroad
- Build on global delivery models (global SW sourcing) based on proven approaches