ISG Provider Lens™ report finds German manufacturers looking for ways to update their processes

FRANKFURT, Germany, Feb. 07, 2020 - Automotive and aerospace manufacturers in Germany are seeking support from engineering services providers as they adopt emerging technologies like 5G, artificial intelligence and the Internet of Things to improve both products and processes, according to a new report published today by Information Services Group (ISG) (Nasdaq: III), a leading global technology research and advisory firm.

The 2019-2020 ISG Provider Lens™ Engineering – Service Partners Report for Germany finds German manufacturers interested in end-to-end contracts in which engineering services providers take ownership of an entire product, platform or process. This helps support manufacturers as they focus their internal teams on cross-functional, product-aligned delivery models.

Digital products and services and digital operations are high opportunity areas for providers. In the automotive product engineering sector, manufacturers are embracing emerging technologies such as 5G, big data analytics, AI and the IoT, as well as smart engineering methods such as simulations, virtual tests and validations. Collaborative development platforms are gaining prominence, to help launch products on time and on budget.

European automakers are seeking provider support to create autonomous driving platforms that use machine learning models to analyze massive amounts of data to develop innovative features and, some day, to operate and monitor autonomous fleets.



Consolidation in the provider market as well as partnerships among manufacturing OEMs has been a prominent trend in the engineering sector. “Smart products and smart manufacturing span all layers of the technology stack, from the physical to the virtual, with product definitions extending right up to the cloud,” said Christian Decker, partner and lead, Smart Manufacturing, ISG EMEA. “This IT – OT [operational technology] integration is a key driver of provider consolidation.”

Auto makers are also focusing on cybersecurity, with vehicle development increasingly becoming software driven and with shop floors being connected to the internet. Service providers are investing in cybersecurity centers of excellence to help manage the risk. They are also helping auto makers integrate IoT and Industry 4.0 technologies, and offering smart maintenance services to the German auto industry, the report says.

“There has never been a more challenging time for German automakers,” said Decker. “On one hand, they are racing against new technology-driven innovations and, on the other, cost pressures continue to be a pain point. In some cases, providers are closely partnering with manufacturers on holistic cost take-out programs, which allow savings to be reinvested in innovation.”

In the German aerospace industry, the report sees some manufacturers turning to providers to replace insourcing arrangements that have led to significant losses. European aerospace companies are now seeing value in outsourcing engagements for services that can’t be carried out by their own organizations.



The report sees aerospace simulation and training technology evolving significantly over the last decade. Futuristic concepts such as urban air mobility and regional mobility, combined with electric propulsion and autonomous systems, open new opportunities for simulation and training vendors.

The 2019-2020 ISG Provider Lens™ Engineering – Service Partners Report for Germany evaluates the capabilities of 36 providers across four quadrants: Automotive – Product (Design, Development and Pilot) Engineering; Automotive – Manufacturing Engineering; Aerospace – Product Engineering, and Aerospace – Manufacturing Engineering.

The report names Altran, HCL, Infosys, L&T Technology Services (LTTS), QuEST Global and TCS as leaders in all four quadrants and Capgemini and Ferchau as leaders in three. Alten and Wipro are named leaders in two quadrants and Bertrandt in one.

The 2019-2020 ISG Provider Lens™ Engineering – Service Partners Report for Germany is available to ISG Insights™ subscribers or for one-time purchase on this webpage.

About ISG Provider Lens™ Research

The ISG Provider Lens™ Quadrant research series is the only service provider evaluation of its kind to combine empirical, data-driven research and market analysis with the real-world experience and observations of ISG's global advisory team. Enterprises will find a wealth of detailed data and market analysis to help guide their selection of appropriate sourcing partners, while ISG advisors use the reports to validate their own market knowledge and make recommendations to ISG's enterprise clients. The research currently covers providers offering their services globally, across Europe and Latin America, as well as in the U.S., Germany, the U.K., France, the Nordics, Brazil and Australia/New Zealand, with additional markets to be added in the future. For more information about ISG Provider Lens research, please visit this webpage.

The series is a complement to the ISG Provider Lens Archetype reports, which offer a first-of-its-kind evaluation of providers from the perspective of specific buyer types.

About ISG

ISG (Information Services Group) (Nasdaq: III) is a leading global technology research and advisory firm. A trusted business partner to more than 700 clients, including more than 70 of the top 100 enterprises in the world, ISG is committed to helping corporations, public sector organizations, and service and technology providers achieve operational excellence and faster growth. The firm specializes in digital transformation services, including automation, cloud and data analytics; sourcing advisory; managed governance and risk services; network carrier services; strategy and operations design; change management; market intelligence and technology research and analysis. Founded in 2006, and based in Stamford, Conn., ISG employs more than 1,300 digital-ready professionals operating in more than 20 countries—a global team known for its innovative thinking, market influence, deep industry and technology expertise, and world-class research and analytical capabilities based on the industry’s most comprehensive marketplace data. For more information, visit www.isg-one.com.