Akka Shifts its US Strategy and Goes India-Centric
Akka Shifts its Strategy in the US
Akka Technologies made a significant shift in its US strategy with the appointment of Dharam Sheoran. Mr. Sheroan joined from Wipro and must have been an ideal candidate for Akka. At Wipro, he headed several global service lines, including automotive and A&D. His experience, therefore, matches Akka’s presence and ambitions in the country.
Akka is making a U-turn in its North American strategy and goes India-centric. The company acquired in 2018 PDS Tech, an aerospace staffing vendor whose largest client was Boeing. Akka wanted to use PDS Tech to enter the Boeing account and bring its engineering expertise. We disagreed with the staffing approach, bringing low margins and a cyclical business. We highlighted several times addressing the US market through an Indian approach was a much better option. Having said that, Akka paid little for PDS Tech (~USD 100m). Also, in all fairness, no one could have guessed the commercial aerospace ER&D market would collapse in less than two months.
Mr. Sheroan Will Help Akka North America to Become India-Centric
No doubt will Mr. Sheroan bring his precious know-how in shifting the capabilities and portfolio of Akka away from capacity to T&M and fixed-priced projects. We expect him to transpose Wipro’s IP and accelerators and overall focus on a repeatable and process-based service delivered from India. With the commercial aircraft industry going through several years of downturn, we think that the Indian costs and quality are the right way to address the market.
The French ER&D Industry Is Becoming More Indian
Obviously, we would have preferred Akka to take a pro-active India-centric approach to the US market. However, later is better than never. We are seeing French ER&D vendors now adopting the Indian model. Of course, Altran, with its Aricent acquisition, led the industry. Expleo recently appointed Rajesh Krishnamurthy A French citizen of Indian origin, Mr. Krishnamurthy was head of the Energy, Utilities, and Telco division at Infosys. Among the large vendors, Alten remains the exception. We would love to see a change in Alten’s offshoring strategy.