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Determinants of Success in Global R&D Lessons from India’s IT Industry. Deependra Moitra. Overview. Indian IT Industry – A Snapshot A Case Study of Infosys Technologies Synthesizing Learning Determinants of Success in Global R&D Discussions
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Determinants of Success in Global R&DLessons from India’s IT Industry Deependra Moitra
Overview • Indian IT Industry – A Snapshot • A Case Study of Infosys Technologies • Synthesizing Learning • Determinants of Success in Global R&D • Discussions Seeking to provide a 360º view of R&D Globalization
Infosys Technologies: Facts Sheet • Started in 1981 by 7 people with US $250 and a dream to build a globally respected software company of the professionals, for the professionals, and without compromising on ethics • 1999: Listed in NASDAQ (first Indian company) • Year 2004-2005 • US $1.5+ Billion in Revenues • Market Cap of US $19 Billion • 37000 Employees • Total Number of Clients 440 • 32 Development Centers and 32 Sales Offices Around the Globe • Has subsidiaries in China and Australia • 2004: Set-up Infosys Consulting
Global Company, Global Outreach Europe: Stockholm Brussels Amsterdam London Frankfurt Paris Zurich Canada Japan, Australia, Hong Kong, China, Singapore, Sharjah, Mauritius USA: Atlanta, Boston, Chicago, Dallas, Detroit, Los Angeles, New York, Fremont, Seattle Argentina India: Bangalore, Chennai, Pune Bhubaneswar, Hyderabad, Mangalore, Mohali, Mysore Delhi, Mumbai
To become a best-in-class provider of software solutions to Global 2000 companies by leveraging technology & talent base of China V I S I O N Infosys in China has a Global Hub … • Incorporated March 2004 as a 100% subsidiary of Infosys, located in Shanghai PuDong Software Park • Focus on • Offering an alternative offshoring destination to global clients • Providing IT services to regional operations of global clients • Providing IT services to large mainland and North Asian corporations • Growth plans 180 (current) to 2000 (2006) • Plans to expand to other cities in China in the next 24 months
Infosys China Integrated Innovation Model Leverages Complementary But there are gaps.. • Quality and Process Maturity • Domain Skills • Project Management Skills • Organizational Skills • Strong Tech Skills • Language Capability • Strong Education System
Clients Employees Investors Society Value, Delight, Long-term Relationship Organizational Drivers (1) “Business insights, integrated solutions, value multipliers.” “Powered by intellect, driven by values.” “The softest pillow is a clear conscience.” “Greater good should always triumph over individual good.”
Organizational Drivers (2) “In God we trust; everyone else must come with data.” “The only time and context invariant attributes of a successful organization: innovation, speed and excellence in execution.” “We should have humility, respect for the competition, and a healthy sense of paranoia; or, we’ll vanish like dew drops on a sunny morning.”
English Language Telecom Revolution Indian Diaspora Technical Education Capital Markets Technology Boom Engineering Industry Export Incentives Y2K Democracy Import Tariffs, Tax Structures Economic Productivity Opportunity Pre-1991 Post-1991 Growth Stimulants
Key Learning • Long-term, value creating, relationship-based model versus transactions based model • Superior value through competency growth and ownership • Global presence for a truly global delivery model to deliver on time-to-market, lowered operational cost and reduced cost of quality • Continuous improvement in quality, productivity and customer satisfaction parameters • 2-D growth (scale and organizational maturity) • Source and manage best-in-class “raw material” for the knowledge business • There are some undesired effects and imbalances, too.
Influencing Factors Managerial Technical HR Management Cultural IP Management Infrastructure Communications Language Project Management Government / Ecology Trust Distance Centralization Vs Decentralization Coordination and Alignment Mechanisms
Global R&D Progression Model Skills Flexibility Confidence Performance Relationship Business Value Partner Ownership Fully Leveraged Subsidiary with total NPD and regional sales responsibilities Tactical / Opportunistic Resource Utilization Tactical Resource Leverage Projects-based Approach Strategic/Integrated Competency-based and Innovation
Determinants of Success • Organizational • Clarity on R&D globalization intent • Managing organizational change • R&D globalization model • Work distribution model • Integration strategy • Executive commitment • Ecosystem • Availability of resource pool (scale and quality) • Complementarity (venture capital, outsourcing, MNC, R&D Labs) • Cluster effect and “Spiraling” effect • Demand creation and opportunities • Policy and Incentives • Government’s facilitative role • Tax incentives • Country attractiveness, economic policies, and educational set-up • Procedural simplicity • Minimize geo-political risks • Other • Coordination and alignment mechanisms • Organizational maturity • Value-based management • IP regime Managing Global R&D is a learned competency
Thank You Questions & Discussions Deependra Moitra deependra@moitra.com www.moitra.com $ 1.06 b Infosys’ growth1991: $ 2m 01 02 03 04 99