2. Deependra Moitra Determinants of Success in Global R&D Lessons from India’s IT Industry

3. 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

4. Indian IT Industry – A Snapshot

5. 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

6. Europe:Stockholm Brussels Amsterdam London Frankfurt Paris Zurich USA:Atlanta, Boston, Chicago, Dallas, Detroit, Los Angeles, New York, Fremont, Seattle Argentina Japan, Australia, Hong Kong, China, Singapore, Sharjah, Mauritius India:Bangalore, Chennai, Pune Bhubaneswar, Hyderabad, Mangalore, Mohali, Mysore Delhi, Mumbai Canada Global Company, Global Outreach

7. 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 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

8. Infosys China Integrated Innovation Model Leverages Complementary Strong Education System Strong Tech Skills Language Capability But there are gaps.. Project Management Skills Organizationa l Skills Quality and Process Maturity Domain Skills

9. Organizational Drivers (1) ClientsEmployees InvestorsSociety Value, Delight, Long-term Relationship “The softest pillow is a clear conscience.” “Powered by intellect, driven by values.” “Business insights, integrated solutions, value multipliers.” “Greater good should always triumph over individual good.”

10. 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.”

11. Growth Stimulants Democracy Engineering Industry Technical Education English Language Pre-1991 Import Tariffs, Tax Structures Export Incentives Capital Markets Telecom Revolution Post-1991 Economic Productivity Y2K Technology Boom Indian Diaspora Opportunity

12. 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.

13. Influencing Factors Managerial Cultural Communications Language Technical IP Management Project Management HR Management Infrastructure Government / Ecology TrustDistance Centralization Vs Decentralization Coordination and Alignment Mechanisms

14. Global R&D Progression Model Tactical / Opportunistic Resource Utilization Tactical Resource Leverage Projects-based Approach Strategic/Integrated Competency-based and Innovation Fully Leveraged Subsidiary with total NPD and regional sales responsibilities Skills Flexibility Confidence Performance Relationship Business Value Partner Ownership

15. 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

16. 99 01020304 $ 1.06 b Infosys’ growth 1991: $ 2m Thank You Questions & Discussions Deependra Moitra deependra@moitra.com www.moitra.com