More and more knowledge and skill-based professions continue to proliferate in parallel, as the Indian offshoring industry evolves and seeks ever-new growth opportunities. New markets within knowledge process outsourcing (KPO) continue to emerge and grow, making this space attractive for venture capitalists eyeing new and relatively unexplored growth opportunities.

Offshoring of "architectural design services"Source: ValueNotes Research is another niche where India has been steadily making inroads. Apart from the numerous captives of international architectural and civil engineering firms that dot the landscape, several third party vendors have emerged on the scene. While there are a few large vendors like Neilsoft and Tata Engineering that provide engineering design services across engineering segments (civil, auto, aerospace, chemical, etc), there are also several smaller players, some of whom are focused on the civil and architectural markets.

The table below lists players focused primarily on civil and architectural design services to the international market.

 
As we can see, the number of players is already quite large and this is not a comprehensive list. While there are a few startups focused exclusively on providing offshore services, most players are originally India-focused architects/engineers that have drifted towards providing offshored services to grab the growing opportunity. Most vendors provide services like drafting, design support, building information modeling (BIM) and production of construction documents.

According to estimates suggested by Cadforce, the US architecture industry is approximately $29 b, while about $100 m worth of work is offshored each year. Several leading architecture firms offshore a small part of their work to India. Despite the offshore market size being only around $100 m, the segment has begun to attract its share of VC interest:

• Satellier received $10m in second round funding from Sequoia Capital. The company plans to invest aggressively in expanding building information modeling (BIM) services. The company has around 450 employees currently.
• Cadforce secured a $1.7m first round of funding from Rincon Venture Partners, based in California, and followed this up with $3.1 m in a second round from Louisiana Ventures. The company has around 300 employees.

Satellier has an Indian offshore presence in Delhi and Kolkata, with offices in New York, San Francisco, Chicago, London, Shanghai, and Hong Kong. California-based Cadforce has offshore facilities in Kolkata and Hyderabad. Both companies service clients with their 'blended-shore delivery' model.

Driven by the ubiquitous offshoring trend, apart from advances in digitization technology and lesser 'time to market', architectural offshoring to India is likely to take-off. However, the challenges faced will be no different from the usual - streamlining processes to ensure scalability, hiring decent quality of employees and keeping them interested!

Growing opportunities in the Indian real estate industry multiplies the employment challenge further. Currently, most work sent to India is 'fragments' of a large project, often devoid of the thrill of 'creating it' for some employees. Despite offshoring growth, vendors do not envisage very high-end design work moving to India anytime soon. Retention of employees in such a scenario is an obvious challenge.

However, one key difference between engineering services and several other KPO segments is that in engineering, the existing pool of trained engineers, architects and draftsmen is huge. For instance, the number of patent attorneys, designers or even lawyers available in India is dwarfed by the sheer number of people and companies employing these people. Indian construction firms have a long history of overseas project execution, especially in the Middle East. There are numerous educational establishments from engineering and architecture colleges to "ITI"s that train people on a range of skills. In many other KPO segments, the shortage of people is exacerbated by the non-existence of meaningful education capacity. As a result, though demand for trained architects and engineers exceeds supply, the size of the pool is quite large. This creates a significant enabler for scalability.

Going forward, just as the Indian architecture firms are increasingly eyeing the offshore opportunity, global architectural firms offshoring to India are expected to look at the potential in the Indian market. While this is still far on the horizon, it may spell bonus for the architecture graduates looking to make the most - global work exposure and possibly the delight of seeing greater appreciation for good architecture in our cities!