Friday, April 09, 2010: 12:56:05 PM

Cover Story


India’s outsourcing expertise has seen great demand in the slowdown, but can Indian firms adapt to the demands of a better economic climate? Mitali Saha explores
Offshoring involves the relocation of business processes of companies from one country to another, typically to reduce costs and gain a comparative advantage. Spurred by a liberalised economy, high technology acceptability as well as a huge English-speaking population, the outsourcing sector in India, in particular, has seen the nation’s emergence as a global industry participant in the last decade or so. The National Association of Software and Services Companies (NASSCOM) CEO Summit has pegged sectoral growth at 80 per cent to generate revenues of around $225 billion by 2020.

In the architectural industry, outsourcing began at least 10–15 years ago. The offshoring of architectural services to India in the form of computer-aided design (CAD) drafting and outsourcing have since drawn significant attention from clients based in the US, UK, Europe, the Middle East and Australia. They enjoyed the benefits not only of rock-bottom costs, but also of highly skilled and economic technical assistance which could be availed quickly on account of time differences. At a point in time when the recession was not very obvious, this trend helped many such Western companies keep their costs low.

According to Bloomberg UTV, the $29 billion US architecture industry outsources work worth $100 million each year, and a large portion of this is outsourced to India. This takes place particularly in the hospitality space, since that industry serves a global customer base. An American Institute of Architects survey revealed that 11 per cent of US architecture firms outsource work.

“Some of the biggest architectural firms have global businesses. Their idea is that they can execute a project from anywhere in the world and draft and design it at a location that best suits the bill. As the trend for outsourcing in IT developed, so, too, did the trend for architectural outsourcing; and in fact, just before the recession hit in 2007, it was believed that at least 30–40 per cent of firms in the US were outsourcing work to countries like India,” says Sonali Dhopte, Technical Director, Excelize, an architectural services company. “Many firms— engineering and architectural—have either opened up their offices here or tied up with local entities to grasp a share of the market, get jobs and execute them here, supported by India’s own inherent growth. Emaar MFG is operating as Emaar in India. Skidmore, Owings and Merrill (SOM) and Callison (for Unitech) are doing a lot of work in India,” says Ankur Mathur, Global Director, Building Information Modelling (BIM) Services, Satellier, an architectural services company. The latest entrant to the list of global companies that have set up shop in India is US-based Gensler. The firm has tied up with design firm Space Matrix to focus on large-scale projects in India and abroad. The Indian skill-set for architectural design and detailing is developing fast. In general, the assignments involve detailing conceptual designs, and Indian firms must elaborate upon and further them with a complete set of design documents.

However, when the slowdown is through, won’t companies go back to hiring domestic services in the West? Can Indian firms adapt to a new business model? Have the emergence of services like Building Information Modelling (BIM) and Design Management Services (DMS) provided a buffer to enable reaching out to a discerning Indian clientele as well?

A Gamut of Services
The services offered by architectural outsourcing firms in India cover the entire gamut of CAD architecture and more, and these expert services have set themselves apart in the world market. “Typically, the work that is outsourced to India includes the non-design-related work. So it could be conversion from a concept design to a CAD software tool, generating a set of drawings, Good-For-Construction (GFC) drawings or construction documents that suffice for executing projects abroad. Other functions being outsourced are rendering and animation work. We are also seeing a lot of interest in BIM modelling now. The most popular services are CAD conversion and construction documentation,” says Ms Dhopte. Artee Rana, Partner, Architecture Outsourcing, adds, “If the design is being done there then design development is done here; besides this, we undertake the construction recommendation and design documentation as well. When working for facilities management companies, we do some drawing and drafting work. Generally, all Indian companies work on processes that can be outsourced. A few act as consultants to foreign companies.” Here is a sneak peek at some chief activities that can be outsourced to India.

Conversion: Conversion services comprise design transition from one format/medium to another. This may be for conversion from paper to digital formats, or from the imperial system to the metric system. The most commonly offered services are digitisation services, which involve changing blueprints and terrain maps to CAD format. Services also comprise the formulation of front elevations to side and rear.

Plans: Drawings and 3D models of the electrical wiring and plumbing plans in congruence with the structure can be devised using software such as Architectural Desktop.

Drafting: Drafting services include construction-detailed architectural plans, working drawings from raw data, technical drawings, comprehensive specification sheets and other such detailed documents. AutoCAD drawings are extracted from manually drawn sketches and blueprints. Construction drawings can be entirely created from general layout sketches, charting out details such as furniture, telephone and electrical layouts, their reflected ceiling and floor plans, partitions as well as hardware schedule plans. Detailed elevation plans from various perspectives are also offered.

Structural Engineering: Drafting and design services like 3D structural modelling, structural
drafting and analyses are available for dynamic as well as non-linear analysis. This is based on the application of software like STAAD-III and Stardyne. The structural engineering service also includes 3D Finite Element Models, which are meant to access the strength of the proposed structure under various loads and stresses. Connection design facilities and calculations based on Allowable Stress Design (ASD) or load and resistance factor design (LRFD) standards may also be sought by using software applications such as DesconWin or X-Steel.

Layering: Layering involves a set of drawings showing different details, consolidated in the
same document. Such a document would display the electrical plan, plumbing structure and air conditioning, all in one. Each layer may be viewed independently or in combination with the others, providing the developer with complete insight of all technical aspects of the building.

Cost and Quantity Survey Estimations: Estimations may be calculated as per initial working drawings or construction plans. The purchase volumes of various materials required can be provided if the product’s quality specifications and prices are provided to the firm. This includes the estimation of structural steel sections, quantities and sizes. Many also possess the expertise of tender preparation which entails detailed specifications and quantities. Cost estimations are generally in the form of Microsoft Excel reports and illustrate with graphics and files. To compute building quantities, the software MathCAD Professional is typically used.

Architectural Visualisation: This applies to design upgrades of the existing building fabric of a property. According to Nirmita Mehrotra, Architect, Urban Planner and Assistant Professor, Apeejay School of Architecture and Planning, these are generally based on  current photographs. The buildings are provided a CAD-enabled facelift.

The Next BIM Thing: Building Information Modelling (BIM) is the process of generating and managing building data over its entire life cycle. Typically it uses 3D, real-time, dynamic building modelling solutions to increase productivity in design and construction. The process produces a building model, which encompasses structural geometry, spatial relations, geographic information and properties and component quality of the building. Airports, hotels and retail destinations are best planned with BIM. “BIM is most beneficial for complex projects, such as those for healthcare that have to be completed on-quality and on-time. The US has mandated BIM for hospital projects,” said Mr Mathur.

The service is now becoming a popular export from India. Ms Dhopte pointed out, “It is the bigger projects that are deeply in need of BIM. We are doing a project with 28 floors that is going to be a BIM project.” BIM serves a virtual advantage before physically building a project. Problems that cannot be easily anticipated in a 2D drawing can be seen in 3D format. Additionally, a BIM model is detailed— it computes the bill of quantities, facilitates change management and helps customise units (of apartments, stores, etc). The size and cost implications of all design decisions can be assessed through BIM. With a BIM product, a 2D drawing that you generate is essentially a bi-product, so any changes are global. Change in a floor plan, changes elevation and quantity. This causes fewer errors. Added Manideep Saha, Head-AEC, Autodesk India and SAARC, “With BIM, architects and engineers can efficiently generate and exchange information, create digital representation of all stages of the building process and simulate real-world performance, thus streamlining workflow and increasing productivity and quality.”

Since projects do not end with construction, BIM can also double up as an excellent facilities management tool when maintaining a building for its life. Autodesk product FMDesktop is one that may be used for the same as it ties into this model without major glitches. “Take for example a hotel—there is ducting, electrical systems— everything is concealed under a false ceiling. If you have to ever access it, you have to open it up, find where the problem is. However, with a Autodesk Revit model you won’t have to do that as you will have a model showing the exact location of pipes. In a 2D drawing it is not the same. Also, if the model is detailed enough, you can also pinpoint the part which has sprung a leak. Further, if you have fed the name of the manufacturer into the model—which again ties into a facilities management tool—you can contact the manufacturer with the part detail and can immediately get a replacement,” explained Ms Dhopte.

Working on BIM requires a steady client interface involving tremendous back-and-forth activity between the person designing and building the BIM model. So, although outsourced, not a lot of outsourcing is happening at the design end. Ms Mehrota commented, “Some offshoring firms are increasingly venturing into facilities management, building lifecycle planning and BIM.” However, she indicated that offshoring management work and DMS has limited scope due to the lack of an adequate interface. Conversely, Mr Mathur opined that, “When you have a technology backbone, it enables people to plug into a BIM from wherever they are after the process is set up first. It is possible to have various agencies working from spots across the globe in a collaborative environment.” What is helping the work gain popularity as an outsourced service is that the number of people that are trained to operate BIM here is much denser than in the US, where the cost of somebody who is trained in BIM is also palpably higher.

Popular Tools
For CAD, the most common applications are part of Autodesk’s range of products, AutoCAD, Architecture and MEP (mechanical, electrical and plumbing). For 3D BIM, Revit Architecture, Revit MEP, Revit Structures and a product from Graphisoft called ArchiCAD are most beneficial. ArchiCAD is recognised as the first CAD product to enable creation of both, 2D and 3D drawings. Since its use is predominant in Europe, a lot of companies outsourcing to the region use the latter. For clash detection, Autodesk has a product called Navisworks that enables 3D project design, engineering, and construction professionals to unite their efforts onto a single platform. Rendering is simplified by Autodesk’s 3D Studio MAX. Mr Saha corroborates with some details of the Autodesk product-line.

Revit Architecture 2010 software: It provides a intuitive user interface that provides a smoother and more continuous design workflow.

Revit Structure 2010 software: It integrates a multi-material physical and an independently editable analytical model, to help provide for more efficient and accurate documentation, analysis and design.

Revit MEP 2010 software: It provides customers with optimum tools for system design and building performance analysis, helping engineers to make better informed decisions.

AutoCAD Civil 3D 2010: A powerful BIM solution for civil engineering, it helps project teams explore transportation, land development and environmental projects digitally before they are built.

Navisworks 2010: It enables design and building professionals to unite project contributions into a synchronised model for BIM, by enabling team members to more reliably share, combine, review and perfect detailed 3D design models of any size or format.

The Global Perspective
In India, the size of projects undertaken was much smaller in the past. Over a short period this trend quickly changed and the size and scope of projects—whether public or private— increased. Mr Mathur opines that the accuracy of master-planning that was required was inadequate. It took a while for architects to develop their capacities and adapt to delivering at the required proficiency. A handful of firms were over-flooded with work, making delivery a long wait. Additionally, the skill to match changing needs had to be imported. The presence of global players on the team also earned higher project investments for developers.

Services that are today being outsourced from India to foreign countries include rendering
and 3D modelling services. The biggest vendor for this service to India is China. This service is quick and cheap because the nation has vast libraries of rendering data and abounds in experience in this field. Many technical CDs floating around for rendering purposes also originate in the country, adds Ms Dhopte. In India, there is a large demand for global services in the GIS digital mapping space. Services such as digital terrain modelling, base mapping, cadastral service for hazard mapping (for earthquake mitigation) are some other popular offshored services from India, says Ms Mehrotra. According to an International Labour Organization report, in 2003–04 alone, India imported various IT and business process services worth $11 billion from the US, Britain, Germany and Japan.

With regard to global architectural offshoring services, India is facing growing competition from nations such as the Philippines, Vietnam, Canada and China. South American countries like Brazil, Uruguay, Mexico and Argentina have some notable firms for CAD outsourcing. According to Mr Mathur, they also benefit from being in the same time zone as North America. Similarly, Vietnam is seeking to carve a niche in markets unshadowed by China, while countries such as Russia and Romania are seeing greater interest fuelled by a smaller time difference to the West.

Due to the recession, India has seen a lot of business drain to other countries due to low-cost opportunities available there. “In terms of rendering and animation, India is not doing too well. China and Vietnam have captured that market, their advantage being low costs.,”
opined Ms Dhopte adding that competition from other developing nations will not be substantial. According to industry sources, the cost of CAD work done in India ranges between $10–22 per hour and is almost one-fifth of that in the US.

Mr Mathur opines that the issue of importing skilled services was necessary in certain unexplored spaces. “If I am working with a skyscraper here and I want an expert in exterior curtain walls, I would not find too many people doing that in India. So US firms have to be engaged. It’s more of a global-sourcing scenario right now. Now that BIM and new-technology offerings are being offered from India, their services will be sought from firms in the US that do not have competencies in these. Energy analysis, curtain-wall detailing and other construction-related services are being sourced from other regions to India,” he said.

Following an amendment in Section 9 to the IT Act, services rendered from outside India for use here will now come under the tax net. The amendment proposed in Budget 2010–11, will now bring all services, including fees on technical service or royalty, under this net irrespective of whether the service provider has a residence or place of business here.

Exploring Opportunities
Outsourcing companies focus on offshoring services and rarely pick up local work. This may be attributed to retaining cost-profit margins to maintain a quality workforce—a must for serving a discerning clientele. However, given the growing global competition, it may be good sense to build up spare capacity to service local markets. A few firms cater to graphic design clients and take up some business from local clientele.

In the West, all service inputs are defined at the conceptual and design stages. In India, generally, one does not require that kind of detailing as most of the work is finalised onsite. “In offshoring projects, as the design team cannot be present onsite, all the concerned work has to flow easily from the plans itself. The basic difference between designing for other countries and our own is that our designs have to be fabric-oriented and theirs, service-oriented,” says Ms Mehrotra.

Since BIM is a service that could increasingly benefit large projects in India, it is popular.  Although scores in India are trained for it, few want to build in-house capacity as there is limited need for it. Instead, it is outsourced when required. However, Mr Mathur believes that many property owners now are mandating the use of specific technology processes to help deliver better results. “A lot of experienced talent is being developed in-house, because there are no legacy systems,” he says. Typically, on projects where there is a foreign and Indian design architect collaborating, the need for a BIM model is much higher. “The birth of BIM is going to be developer- and contractor-driven. When developers face problems in execution due to lack of coordination, their costs will go up and they will start looking at options to reduce these; only then will these virtual models come into play.” says Ms Dhopte.

According to a survey conducted by Excelize and market research firm, Opinion Market Research, it was found that 96 per cent of Indian developers believed that the lack of coordinated drawings was one of the biggest challenges preventing timely execution in the real estate industry, thanks to emergency clash points in architectural drawings and reworking drawings at the last minute. 92 per cent of builders said that when drawings were received in time, few were coordinated, coherent and GFC. Issues such as drawing coordination, reworking activities onsite and delayed schedules account for more than 20 per cent of total time delays.

More and more developers are seeking outsourced architectural services today. Shabbir Kanchwala, VP–Project Coordination, K Raheja Corp says, “We work with a lot of architects worldwide and try to balance in-house designing with outsourcing these services, from India as well as abroad. External architects have a lot of exposure to projects in India and outside. So, we like to leverage that expertise in our projects. Foreign architects are good at master planning and designing, while Indians are good at detailing and GFC drawings.”

Neev Group of Companies currently outsources a lion’s share of its design services. It has outsourced design work on its residential projects in Nana Chowk, Colaba and Dadar to architects like Saurabh Chatterjee, Skyline Architects. Nayan Raheja, Director, Raheja Developers, said “We work with an in-house team, and we outsource work domestically and from abroad. The upcoming trend now is to outsource the conceptual part to international outsourcing firms while the submission and working drawings are done in-house.” Mr Raheja and Jitendra Jain, MD and CEO, Neev Group of Companies agree that most builders are not equipped with architects who are in tune with changing construction trends. This hurdle can be avoided by bringing on board an architectural outsourcing firm.

In the past, K Raheja Corp has worked with global brands such as SOM, HOK (formerly Hellmuth, Obata + Kassabaum) and Bell Collins. Swiss architect Mario Botta has designed Tata Consultancy Services offices in Hyderabad and Noida. Raheja Developers is working on their Delhi slum-rehab project with Callison, one of the world’s leading architects for mixed-use development projects as well as Aedas, again one of the world’s largest, for a couple of group-housing projects in Gurgaon. Mr Raheja believes that buildings built using international help provide leverage while pitching to clients. They bring a fresh perspective to the projects, especially if you already have an in-house team in place. However, Mr Jain suggests that international architects are not familiar with mandates such as Development Control Regulations, which, in contrast, is something outsourcing companies in India are constantly updated with.

Preparing for Change
The obvious benefits of outsourcing design services are reduced costs and multiple parties working on a single project across the globe, 24x7. This helps speed up design as well as construction. For India, the differentiator in the long run will be experience. Ms Mehrotra says, “In the slowdown, the West was looking for cost-cutting solutions in developing nations. India’s edge was its low-cost skilled manpower and the time differential. Now, the
global construction industry is reaching a post-slowdown equilibrium. Eventually, many firms in the West will look at employing local staff. That may present problems for the CAD outsourcing niche. In such a case, these Indian players may have to start catering to local clients or laying off their staff.”

India is evolving to provide more value-added services for the global environment. Says Mr Mathur, “India is perfectly located to serve the Middle East, UK and US on one side and Australia on the other. In India, the owner–driver approach will drive the trend to make individual consultants improve their service quality as well.” India has gone from 2D manual drafting to AutoCAD. However, instead of upgrading India’s skills on AutoCAD, it is now advisable for the outsourcing industry to skip growth on that front and advance to the BIM platform.

Industry estimates suggest that India needs 10,000–20,000 architects to cater to the domestic and global market in the coming years, but India has no dearth of technical and theoretical skills. As Ms Dhopte points out, “Skill-wise, India’s new graduates are much more proficient with technology as compared to 10 or even five years ago. Actually getting an opportunity to apply this skill is going to be more crucial.” Progress requires us to learn from our own experiences as well as those of our global counterparts.

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