- COVID-19 has had a pronounced impact on enterprise ER&D spending across verticals such as Aerospace and Transportation owing to demand vaporization
- ER&D spending in Aerospace is expected to decrease from USD 57 Bn in 2019 to USD 35 Bn in 2020
- Hi-Tech verticals such as Semiconductor, Telecom, and Enterprise Software have stayed resilient
- Digital Engineering is driving ER&D spend recovery on the other side of the pandemic
NEW YORK, Nov. 19, 2020 /PRNewswire/ -- Zinnov, a leading global management and strategy consulting firm, released its global ratings of Engineering R&D Services Companies, titled, 'Zinnov Zones for ER&D Services – 2020,' today. The comprehensive study empowers business leaders across industries to make informed decisions in their partner selection across geographies for their Engineering and R&D-led product and service initiatives. The Zinnov study analyzed the global Engineering R&D (ER&D) space and estimated that the Global ER&D spend by organizations worldwide has dropped by 6% year-on-year to USD 1.3 Tn in 2020.
The study titled, 'Zinnov Zones for ER&D Services – 2020,' highlighted the impact of COVID-19 on the global ER&D spend. The pandemic has had a pronounced impact on enterprise ER&D spending, especially across verticals such as Aerospace and Transportation, owing to demand vaporization. However, Hi-Tech verticals such as Semiconductor, Telecom, and Enterprise Software have stayed resilient in the face of COVID-induced uncertainties. In fact, the Software and Internet vertical has stood steadfast against the onslaught and is even expected to grow by 7% to touch USD 209 Bn in 2020 alone. The reason, an increased demand for Cloud and collaboration tools, digital infrastructure, data centers, and software-based network architecture for management of high network traffic that have helped growth within these sectors.
The Zinnov Zones study revealed that Digital Engineering spend will continue to provide impetus to the overall ER&D spending, especially on the other side of COVID-19, with enterprises investing heavily in 5 key themes:
- Adoption of Tele-X or Tele Everything, which has increased multi-fold during the pandemic. Healthcare and Education verticals, witnessed massive adoption and this change in consumption behavior is here to stay
- Building Contactless Commerce capabilities through "touchless order-to-delivery" experiences for customers
- Creating Intelligent Workplaces that incorporate workplace automation and safety while being conducive to productivity and innovation
- Enablement of end-to-end connected, intelligent, and immersive approach "Digital Thread" that covers next-generation product design platforms, digital manufacturing, and digital field services. The Digital Thread is already playing a key role in how enterprises conceptualize, design, manufacture, and support products
- Building systems for IoT-enabled Next-Generation Governance that enable cities to be pandemic-proof
Speaking about the report, Pari Natarajan, CEO, Zinnov, said, "In a post-COVID world, enterprise R&D priorities and the way companies work, will undergo a transformational shift. As enterprises accelerate technology adoption, the spend on Digital Engineering initiatives will be directed by Cloud, Intelligent Automation, 5G, and IOT. Consequently, companies will need to undertake reorganization initiatives to enable technology leaders to helm key business roles, and not just limit power centers to CIO and CTO roles. Enterprises will need to concurrently work towards building a robust multi-hub strategy to ensure business continuity in these turbulent business conditions."
"Companies will need to stay razor-focused on their core competency to drive differentiation, which is already translating to increased ER&D outsourcing levels. Currently, the addressed market by Service Providers is ~USD 80 Bn and accounts for only 6% of the global ER&D spend, but this is changing rapidly. Large engineering deals being signed amidst COVID is testimony to the increasing value being perceived from outsourcing relationships and ER&D outsourcing maturity," stated Pari.
For this study, ~60 Global ER&D Service Providers were assessed on their ER&D Services prowess and capabilities, across the following areas:
- Overall ER&D Zones 2020
- ER&D Zones – Small and Medium Service Providers 2020
- Digital Engineering
- AI Engineering
- Verticals: Automotive, Aerospace, Consumer Software, Enterprise Software, Industrial, Medical Devices, Semiconductor, Telecommunication
- Micro-verticals: ADAS, AI and ML for BFSI, Contactless Retail, Content Monetization, Cybersecurity, Digital Thread, SDN and NFV, Software Platform Engineering, Telematics, Telemedicine, and OTT
Service Providers assessed: Accenture, Accolite Digital, AF, Akka Technologies, Alten, Aspire Systems, Bertrandt, Bosch, Brillio, Bristlecone, Capgemini, Cleverlance, Cognizant, Cyient, Daffodil Software, EDAG, eInfochips, Encora, EPAM, Expleo Group, e-Zest, Global Logic, GS Lab, Happiest Minds, HARMAN Connected Services, Hashedin, HCL, IAV, Ignitarium, Infostretch, Infosys, intive, Itransition, KPIT Technologies, LTTS, Marlabs, Mindteck, Mindtree, Mphasis, Musala Soft, Ness Digital Engineering, N-ix, Persistent Systems, Quest Global, R systems, Sasken, Softdel, Tata Elxsi, Tata Technologies, TCS, Tech Mahindra, Tieto EVRY, To The New, Trigent, UST Global, Volansys, VVDN Technologies, and Wipro
About Zinnov Zones:
Zinnov Zones is an annual rating published by Zinnov which rates Global Service Providers based on their competencies, capabilities, and market success. Since 2009, Zinnov Zones (previously known as GSPR – Global Service Provider Ratings) has become one of the most trusted reports globally, for both enterprises and Service Providers to better understand the vendor ecosystem across multiple domains such as Digital Transformation, ER&D Services, IoT, RPA, and Media and Entertainment.
This is the twelfth consecutive year that Zinnov has assessed Service Providers for their ER&D capabilities. The detailed ratings and contact information of service providers are available on https://zinnovzones.com/
Founded in 2002, Zinnov is a leading global management and strategy consulting firm, with presence in Santa Clara, Houston, Bangalore, Gurgaon, and Paris. Over the past 18 years, Zinnov has successfully consulted with over 250+ Fortune 500 enterprises and technology companies to develop actionable insights that help them create value – across dimensions of both revenue and optimization. With core expertise in Product Engineering, Digital Transformation, Innovation, and Outsourcing Advisory, Zinnov assists clients by:
- Enabling global companies to develop and optimize a global engineering footprint through center setups, and technology and functional accelerators to achieve higher R&D efficiencies, innovation, and productivity;
- Advising global PE firms in asset shortlisting and target evaluation, commercial due diligence, and value creation;
- Growing revenue for companies' products and services in newer markets through account intelligence, market entry, and market expansion advisory;
- Structuring and implementing Digital Transformation levers enabled by technologies like AI/ML, Cloud, IOT, and RPA;
- Helping global companies outline and drive their open innovation programs, design and operate accelerator programs, and enable collaboration with start-ups across specific use cases and predefined outcomes.
With their team of experienced consultants, subject matter experts, and research professionals, Zinnov serves clients from across multiple industry verticals including Enterprise Software, BFSI, Healthcare, Automotive, Retail, and Telecom in the US, Europe, Japan, and India.
For more information, visit http://zinnov.com.
Chief Marketing Officer, Zinnov