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

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Presentation on theme: "Managing Global R&D Collaboration Vinit Parida ETS/Entrepreneurship and Innovation Luleå University of Technology Luleå Feb 29, 2012."— Presentation transcript:

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

2 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 skilled but relatively cheap labor” (Doh et al., 2009)

3 3 Emerging Global Trends Saab India Technology Centre invigt i Hyderabad i samarbete med Mahindra Satyam 21 okt, :53 CET I samarbete med Mahindra Satyam invigde Saab India Technologies Pvt. Ltd. idag Saab India Technology Centre, ett nytt centrum för forskning och utveckling i Hyderabad 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. Percept Activ launches Sandvik Coromant’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 Sandvik Coromant - 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.

4 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 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 6 Offshore-site Challenges Interface Challenges On-site Challenges R&D Offshore Challenges 65 Interviews in eight Global companies 3P List of more than prominent challenges Fear of job losses Global working experience Intraorganizational commitment Operational routines Retention of talent Access to talent Knowledge sharing and building Cultural diversity Information technology

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

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

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

10 10 Managing Global R&D Collaboration For more information contact: Vinit Parida Luleå Feb29, 2012 Thank you ! Any Questions?

11 11 Recommendation ChallengeRecommendation Fear of job lossesRegular internal discussions and meetings about future of offshore engagement with managerial and operational level stakeholders and future opportunities Global working experience Identify and recruit individuals with an appropriate managerial/ leadership skill-set to facilitate and coordinate offshore engagement on-site Access to talentRecruit experienced employees at the offshore unit at the managerial level and undertake campus recruitment visits to top engineering universities. Retention of talentDevelop customized growth plans for offshore unit employees to reduce the rate of attrition and create incentive for retention of talent Operational routinesPerform internal analyses of processes and tasks based on three critical criteria – level of transferability, maturity, and risk. Knowledge sharing and building Formal and informal knowledge transfer programs, such as online seminars, crash courses on specific tools, internal regular meetings. Emphasize the development of product knowledge at the offshore unit through access to the factory floor and sharing design practices. Intra-organizational commitment Development of a specific offshore strategy and dedicated offshore unit Information technology Investment in developing information logistics and data exchange tools which ensures access to relevant information for offshore employees Cultural diversityInitiate inter-cultural learning programmes through promoting on-site visits and offshore unit visits

12 12 R&D Offshore Challenges 65 Interviews in eight Global companies 3P List of more than 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 Global working experience “people here [i.e. on-site] have always been accustomed to communicating easily and asking questions over the wall and working on problems together”. Intraorganizational commitment “Shifting from cost savings to R&D offshoring requires strong internal organizational commitment and agreement, which is typically missing for most multinational companies”

13 13 R&D Offshore Challenges 65 Interviews in eight Global companies 3P Operational routines “ 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 ” Retention of 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” Access to talent “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

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


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