Customer and partner-centric collaboration is a must for achieving ER&D success

With a greater focus on innovation, faster time-to-market, and the development of sustainable and future-ready solutions, service providers’ role as enablers is becoming paramount. The successful integration of ER&D services is not solely based on technical knowledge and solutions—but also on how effectively one integrates expertise, fosters collaboration, achieves measurable business outcomes and operational efficiency, and provides skilled talent. As customer and partner expectations continue to evolve, service providers are doubling down on the value delivered through a mix of robust capabilities, global scale, domain expertise, and collaborative innovations.

Voice of the customer (VoC) and voice of the partner (VoP) (see Exhibit 1) from our upcoming ‘Best of Engineering Research and Development Service Providers, 2025’ Horizons report show that capabilities around the depth of services, talent, geographic presence, co-innovation, and domain expertise, among others, have a critical role in driving business impact.

• Enhancing capabilities to establish agility: Customers and partners rated the breadth and depth of services at 8.6 and 9.4, respectively, reflecting service providers’ increased focus on offering a wide array of specialized capabilities, from early-stage design, embedded hardware design, simulation, and product life cycle management. Also, providers are taking an integrated approach by aligning partner capabilities with customer demand to elevate customer experience, making them more agile in meeting evolving customer expectations and industry dynamics.
• Robust delivery models and talent: Global presence and skilled talent are proving to be a strategic advantage for service providers, ensuring faster turnarounds and resilient operations. Service providers are leveraging centers of excellence and adopting a hybrid nearshore and offshore approach for reduced time-to-market and better talent. In our survey, both customers and partners highlight that these factors are crucial in meeting their long-term ER&D goals.
• Evolving innovation and commercial models: Service providers are engaging with a broader network of partners, such as technology providers, domain specialists, and academic institutions, to foster a collaboration model and innovation ecosystem. This approach enables them to develop cutting-edge solutions and accelerate product development, resulting in mutual growth. At the same time, the adoption of enhanced commercial models, such as outcome-based, ensures clearer and measurable value for customers and partners.

The Bottom Line: The transformative potential of ER&D services lies in an ecosystem-driven approach, agile innovation, skilled talent and established delivery models, and outcome-oriented engagements.

Customers and partners expect more than transactional relationships—they demand strategic co-creation aimed at delivering tangible, transformative business results. To catalyze growth, service providers must continue to deepen their collaborative approach, invest strategically, and co-innovate to unlock maximum value and impact.