April 2006 | Cynthia Rodrigues
Designed to perfection
Customers of Tata Technologies can now draw from the resources of the company as well as its acquisition, INCAT International
Customers of Tata Technologies have reason to rejoice. They can now draw from the skills and resources of not only India's largest provider of automotive engineering and design services but also those of its acquisition, INCAT International.
Expressing his pleasure with the acquisition, Patrick McGoldrick, MD and CEO, Tata Technologies, says, "The joint operations of Tata Technologies and INCAT will add even more value to our combined international customer base through our ability to deliver engineering and design and product lifecycle management (PLM) solutions in the most timely and cost-effective manner onsite, near-shore and offshore."
Tata Technologies' decision to grow inorganically arose from its customers' demands to enhance the company's local presence. "Our customers kept emphasising to us that engineering is different from IT. To help them optimise the way they develop products requires a deep understanding of their processes so that the right work can be done at the right place, at the right time and at the right price," explains Mr McGoldrick.
The acquisition was needed to strengthen the company's presence by bringing together process knowledge, complementary delivery capabilities, the opportunity to leverage existing client relationships, and to create a truly global delivery model by adding local capabilities in new geographies.
The right choice
The search for the perfect candidate involved a formal selection process featuring criteria such as local presence (it had to have critical mass in key automotive cities), right technology (it had to be engaged primarily in engineering and design services), satisfied customers (quality of customer relationships and provision of critical services to Tata Technologies' target and existing customers), suitable skill sets (expertise in CAE, CFD, PLM, CATIA Version 5), financial (acceptable profitability, repeat business, balance sheet risk) and culture (strong supporter in the identified target markets).
Having evaluated a number of targets, the company finally decided to acquire INCAT. The UK-based firm had a number of advantages to recommend it, not the least of which was its presence in Detroit and the key automotive capitals of the world. Another plus point was its substantial presence in the aerospace sector which complemented Tata Technologies' small but growing presence in this domain.
Into the fold
INCAT looked in detail at the Tata group's experience with previous acquisitions, notably that of Daewoo. "Our philosophy of retaining top management, together with access to Tata tools such as business excellence and the focus on measurable quality, helped give INCAT directors, shareholders and senior management confidence that the acquisition would be beneficial to all stakeholders," Mr McGoldrick explains.
Warren Harris, president, INCAT, says, "The shared engineering heritage has provided a basis on which we understand each other. Now we need to work on welding together the distinct cultures of the two companies."