Managing Global R&D Collaboration

1. Managing Global R&D Collaboration VinitParida ETS/Entrepreneurship and Innovation Luleå University of Technology Luleå Feb 29, 2012

2. Define Outsourcing vs. Offshoring Outsourcing is the movement of internal business processes to an external company. A company who subcontracts the business process in the same country would be outsourcing, but not off-shoring (wiki). Offshoring is the relocation of business processes to foreign countries to take advantage of skilledbut relatively cheap labor” (Doh et al., 2009)

3. Emerging Global Trends Saab India Technology Centre invigt i Hyderabad i samarbete med MahindraSatyam 21 okt, 2011 11:53 CET I samarbete med MahindraSatyam invigde Saab India Technologies Pvt. Ltd. idag Saab India Technology Centre, ett nytt centrum för forskning och utveckling i Hyderabad Percept Activ launches SandvikCoromant’s ‘The Yellow Truck’ Campaign Fri, 21 Oct 2011   Percept Activ, the Strategic Business Unit of Percept Sports & Entertainment, recently organized ‘The Yellow Truck’ roadshow campaign for SandvikCoromant - a Swedish giant and a market leader in the metal cutting industry. This unique outreach programme kick-started on 3 October, 2011 in Pune will be traveling to 49 cities covering 20,598 km in 115 days for their valued customers.    Volvo Aero India Bangalore har Volvo Aero sedan några år ett produktutvecklingskontor. Volvo Construction Equipment to invest Rs 90 Cr in Indian facility Wednesday, 12 May 2010 Bangalore: Volvo Construction Equipment, a wholly owned subsidiary of AB Volvo, has announced a strategic investment of about INR 90 Crores in its existing facility in Bangalore, India for the production of Excavators.

4. Emerging Global Trends Source: Duke University/Archstone Consulting Offshoring Research Network 2004 and 2005 U.S. Surveys and Duke University/Booz Allen Hamilton Offshoring Research Network 2006 U.S. Survey.

5. Emerging Global Trends Changing Importance of “Access to Qualified Personnel” as a Strategic Driver of Offshoring Decisions Source: Duke University/Archstone Consulting Offshoring Research Network 2004 and 2005 U.S. Surveys and Duke University/Booz Allen Hamilton Offshoring Research Network 2006 U.S. Survey.

6. R&D Offshore Challenges List of more than 20-30 prominent challenges Interface Challenges Cultural diversity Offshore-site Challenges On-site Challenges Information technology Access to talent Fear of job losses Operational routines Retention of talent Global working experience 3P Knowledge sharing and building Intraorganizational commitment 65 Interviews in eight Global companies

7. R&D Offshore Challenges Top 3 Challenges Top 2 Managerial Challenges Top 2 Operational Challenges 60 respondents from two Global companies

8. Dynamic View- Collaboration Life Cycle Collaboration Maturity Setup Stage (Year 0) Startup Stage (Year 1-3) Ongoing Operation Stage (Year 3 and ahead) Dissolution Stage

9. Dynamic view- R&D Offshore Challenges Retention of talent Access to talent Operational routines Knowledge sharing Knowledge building Collaboration Maturity Information technology Fear of job losses Global working experience Cultural diversity Intra-organizational commitment nizational commitment Setup Stage (Year 0) Startup Stage (Year 1-3) Ongoing Operation Stage (Year 3 and ahead)

10. Managing Global R&D Collaboration Thank you ! Any Questions? For more information contact: VinitParidavinit.parida@ltu.se Luleå Feb29, 2012

11. Recommendation

12. R&D Offshore Challenges List of more than 20-30 prominent challenges “I think/I hope that we still have work left” “the people here (on-site) initially thought that everything will move to low-cost countries. This is a critical issue” Fear of job losses “people here [i.e. on-site] have always been accustomed to communicating easily and asking questions over the wall and working on problems together”. Global working experience 3P “Shifting from cost savings to R&D offshoring requires strong internal organizational commitment and agreement, which is typically missing for most multinational companies” Intraorganizational commitment 65 Interviews in eight Global companies

13. R&D Offshore Challenges “Due to the presence of several global engineering companies in close proximity (e.g. Bangalore high-tech parks), it can be difficult to attract the top talent” –hotspot phenomenon Access to talent “we have lost several competent offshore engineers in the last few years. This is a challenge for us because we have to start from the beginning each time with the new recruits” Retention of talent 3P “it is all about process development at our side (i.e. on-site). The current processes followed are highly individual, so they lead to too much artistic freedom….so basically we need to straighten up our internal offshore processes and start to produce similar functional work packages every time ” Operational routines 65 Interviews in eight Global companies

14. R&D Offshore Challenges Knowledge sharing and building “we usually get detailed information about our specific task but we don’t understand the bigger picture” “they don’t dare to make mistakes but as engineers we expect them to draw their own conclusions and come up with ideas and solutions” Cultural diversity 3P “the offshore unit employees should have direct access to models, drawings, and design practices but we are restricted in providing them with this access”. Information technology 65 Interviews in eight Global companies