3 Problems Engineering Firms Can't Afford to Ignore
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3 Problems Engineering Firms Can't Afford to Ignore

  • Highlights

  • Improper cash flow management

  • Cyber security threats can lead to a revenue loss

  • Increased carbon emissions

  • Engineer loan as a solution


Driven by increased investments in industrial production and infrastructure, the Indian engineering sector has been on a growth trajectory over the past few years. With Indian engineering exports growing at a CAGR of 7.61%, during FY 08-17, the sector holds a strategic importance to the country's economy. However, for further growth in the days to come, the engineers running firms can’t afford to ignore these four problems.


1. Issues Related to Working Capital Cycle Management

All Tied up India - Working Capital Management Report 2014 published by EY highlighted an important issue affecting Indian firms including some of the top engineering conglomerates. The issue was that of ineffective working capital cycle management. The report said that top Indian firms could have had Rs.5.3 trillion cash at their disposal in FY 2013, only if they had effectively managed their working capital.

An economic downturn, recession in business, late execution of projects, and delay in receiving payments from clients put pressure on the working capital of engineering firms. Engineering companies can address issues related to working capital, with a loan for engineers offering up to Rs.15 lakh, the loan can be availed in a flexi format which is perfectly suited for cash flow management and gives companies the required liquidity where they can borrow as and when required.

2. Cyber Security Threats

According to EY, more than 60% of the software used by firms in India are unregulated, thereby posing a threat of cyber-attacks. India is witnessing increased sophistication in cyber-attacks from both organised and unorganised players, and it is high time for engineering firms operating in the country to adopt and implement robust cybersecurity solutions.
The running cost of implementing cyber-security solutions can go as high as Rs.2.5 lakh per annum. It’s a multi-layered approach that involves cybersecurity audit (costing around Rs.7 lakh), setting up the required infrastructure, deployment of the technology solutions (costing approximately Rs.5 lakh) and day-to-day maintenance that can be funded with an engineer loan.

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3. Increase in Carbon Emission

In the modern scenario, it's important for engineering firms to reduce their carbon footprint and adopt green practices. Going green reaps dividends for engineering firms in terms of employee productivity and efficiency.
A survey found that workers in a green building environment scored 61% higher in cognitive function than those in a traditional building with productivity benefits ranging from Rs.4-5 lakh per employee annually.

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