Offshoring is still a taboo in the architecture, engineering, construction (AEC) industry. Unlike the entertainment or automotive design industries, which also require a combination of technical and creative talent, the AEC industry is beset with some unique challenges that make offshoring a difficult decision to implement. Some of the traditional challenges include availability of skill sets and lack of fresh talent, lack of maturity on both the service provider and outsourcer side, and some perceived risks in outsourcing  and offshoring.

Yet the slow march towards offshoring is unmistakable. The 2006 American Institute of Architects (AIA) Firm Survey indicated that more than 60 percent of architecture firms outsource work at least occasionally, and eight percent of those firms offshore outsource. In addition, based partially on Forrester Research findings, consulting firm Larsen Associates has projected that within two years, 20 percent of firms will send work offshore and that 20 to 30 percent of the U.S. architecture jobs will be offshored by 2015. In another survey done by Larson, presented at the 2006 AIA National Convention, also found that costs ran from one-third to one-tenth of the U.S. production costs when performed by offshore personnel. (Source: AIA Report)

The Drivers
The usual drivers of outsourcing like cost benefits and competitive advantage stand but there are some others that make outsourcing and offshoring a viable business case in the AEC industry. Offshoring frees up technical capacity to manage new workflows, and the additional capacity can be used to handle multiple projects concurrently. It also helps technical teams to handle peak design loads when multiple projects in the design phase compete for the same resources. Even as these benefits accrue — the AEC firms can better utilize and deploy junior technical talent to handle higher order work — thus leading to accelerated skill transformation. This is because routine and repetitive tasks like drawing conversions and hygiene tasks like documentation are taken care of by the offshoring partner to a level that there is an overall value-addition. Thus, the work that has been going offshore includes construction documentation, renderings, electronic model creation, and drafting, etc.

Activities that are considered to be more difficult to outsource include customer-facing interactions, project management, materials selection, and some high-end analytical work.

Potential Destinations

Dalian (China) Manila (Phillipines) Columbia, Venezuela, Uruguay (South America) Mexico

Source: Som Marappa of SN Architects; These are the destinations other than India for outsourcing architectural services.

The Customer — Architectural Firms
For an AEC firm, superior design capability is the most important business differentiator. And this is the very reason for them not to outsource the core work to offshore locations. Intellectual Property Rights (IPR) issues have always followed outsourcing irrespective of the area of practice. First of all, there is a lack of trust as there is not much bonding between the architects in the U.S. and India, though the major chunk of work is coming to India from the U.S. This is borne out of the fact that AEC firms in the U.S. believe that the Indian architects lack the sophistication needed to handle global projects. Till the time large construction groups such as Unitech and DLF take a step ahead and hire U.S.-based architectural firm or architects to take up their projects, the walls of distrust will not crumble.

Secondly, the work culture in the two geographical regions differs to a great extent.  In the U.S., the construction work proceeds only once the drawings are finalized by the customers. So here the contractors get involved once the design is put on the paper. On the contrary, in India the drawings and the construction phase go hand in hand. Thus, even contractors get involved to some extent in the design process. In order to build up outsourcing relationships, there need to be some level of understanding between the two varied work cultures.

Lastly, it is the lack of readiness to embrace outsourcing as a business practice. The U.S.-based architectural firms are not quite ready to send higher order work. The housing and construction sectors in the U.S. are bound by laws and legal guidelines, which the architects are required to abide with. The architects who graduate from the U.S. are well-versed with this list but the challenge is to train an Indian architect on them. It is like teaching a law student the legalities of another country.  Moreover, a lot of training is required to get desired results.

Despite these differences, there is an indication of hope that more of architectural work will get outsourced. “Outsourcing does help in saving the cost that goes in hiring drafters for drawings. But getting a third-party involved in some cases is more problematic. As drawings have to back and forth for corrections, it makes the process tedious. Plus it is a long chain. We explain requirements to the service provider and then they in turn explain it to the production team sitting offshore. We get perfect images of what we want, but the problem arises when we get into the intricacies and notice the differences in what we wanted and what we got,” says Som Marappa of S.N. Architects and former President of AIA’s South East Chapter — Alaska, and who has been a practicing architect in the U.S. for the last 20 years. “Major issue is the disconnect between the two genres of architects. Outsourcing will be a more successful avenue once these differences are bridged.”