Four questions an engineering-services strategist answers

Global manufacturers have been setting up their own engineering and technology centres in India for two decades, and the pace has increased. I maintain an account map for our forty largest clients that records which work each one treats as overflow, as specialist capability or as knowledge it intends to own. Account directors update it each quarter, and I test it against hiring announcements, facility leases and the questions clients ask during renewals. Where a captive is likely, we prepare an offer before the client tenders: a build-operate-transfer arrangement, a reduced specialist scope or a joint centre. I do not decide pricing; the business head does. My contribution is to make sure the board sees the probable change in revenue three years early rather than in the quarter it arrives.

An engineering-services company inherits its clients' investment cycles. When vehicle makers paused programmes in 2020, our mobility revenue fell by about a fifth in six months. I now present the portfolio by the sources of each segment's demand rather than by revenue share alone: model launches and emission rules for vehicles, factory automation budgets for industrial machinery, and regulatory submission cycles for medical devices. Capability spending is allocated against those drivers. Medical-device work needs verification engineers who understand design-control documentation and quality-system expectations, which takes longer to build than a simulation team. I make the trade-offs explicit: money placed in device verification or factory software is money not placed in battery-management and vehicle-software teams, where demand has returned quickly and competitors have moved faster than we did.

Engineering services are bought by the hour of a capable person, so the location of that person shapes cost, attrition and what clients will accept. I compare cities on the depth of graduating engineers in relevant disciplines, the presence of manufacturing clusters, the senior talent available to lead teams and the travel clients will tolerate. Coimbatore met the first two tests and failed the third at the start, which is why we relocated sixty senior engineers from Pune with defined allowances. I also track the hidden costs of a new centre: duplicated laboratory equipment, leadership time and client reluctance to approve a site they have not visited. The delivery head owns operations. My role is to show the board the full ramp-up cost and the conditions under which a centre should stop growing.

As a listed company, Varunthal has a Risk Management Committee, and I report to it twice a year on strategic exposures: client concentration, insourcing probability, dependence on particular vehicle programmes and the effect of new tools on the size of engineering teams clients will buy. I keep these reports separate from the chief financial officer's financial-risk reporting, while agreeing figures with his team before anything reaches directors. Each report states the indicators we watch, the level at which management will act and the actions already taken. I work with the company secretary when a strategic decision may need disclosure to the stock exchanges under the listing regulations. I avoid presenting a risk as managed simply because it has a named owner; the committee should see the evidence that the response is working.