February 24th, 2003 - What are the options before most mid-sized companies to distinguish themselves from the crowd? Not much. One is to get into the already crowded space of outsourcing and compete with the ‘Big Names.’ Another is to find a niche where there is little competition. But niche areas too are getting filled up and commoditised. Take areas like chip design and embedded software, for instance, which are getting increasingly crowded. But one area, which remains relatively untouched, is the product design space.
And this is the area, which the Bangalore-based Tata Elxsi, the lesser-known infotech company of the Tata group, is betting on. The business model of the company is unusual for an Indian enterprise since it focuses extensively on design at all levels—right from specialised product design services to system design and silicon design. This is the competitive advantage Tata Elxsi is betting on. The company delivers services and complete development projects to a variety of industries, right from consumer appliances and FMCG packaging to automotive and aerospace design.
Says Ramakrishnan S, Tata Elxsi’s Worldwide General Manager for Sales and Marketing, “ Design is what sets us apart from the competition and also plays a key role in bringing our core practices together. For instance, in product design services, design highlights our hardware and software design expertise. For the design engineering services, it emphasises our capabilities in providing customised design engineering and industrial design solutions. For our systems integration services, it represents the unique products and solutions across different divisions and the seamless integration services that we offer. And for Mediaworks, design comes into play on a purely aesthetic sense for 2D/3D animation and game development. ” And while every SBU looks different, it is the design element that connects them together.
For example, in product design services the company’s expertise ranges from automotive, consumer products, semiconductors, media, storage and scientific applications. Can you think of any similar Indian company which has these capabilities? In system integration too, besides offering solutions in the CAD/CAM domain, the company offers solutions in niche and highly specialised areas like high performance computing, virtual reality and bio-informatics. But, being in a highly specialised domain has its pitfalls. For instance, Tata Elxsi does not do traditional work done by the majority in the Indian IT industry, like say, customised module development, implementation of ERP or BPO. Hence, it does not have the cushion of low-end commodity services, which are one of the major sources of revenue for other companies. But the business model of the company makes sense if you take a long term view of the industry. The company believes that in the future design will form a core part of every company’s strategy across every domain. But as companies look at decreasing the products time-to-market for products it would make sense for them to outsource their design requirements or look at adopting existing designs developed by specialist companies like Tata Elxsi. This is what Tata Elxsi is betting on. In line with the long term vision the company has been strategically trying to position itself in niche areas with the objective of acquiring competitive domain knowledge. This would mean that in any area, if a particular company wants to deploy products in a short time frame, Tata Elxsi can meet the requirement by providing specialised design services with the technology at a lesser cost or license its Intellectual Property. |
