As a part of the Blue Star Infotech team, I got an opportunity to participate in Congruence 2010, one of the largest R&D conferences in India, hosted by Zinnov. Blue Star Infotech was the Silver partner of for the event which saw a huge ensemble of people from all R&D organizations like MNC captives, Defence Labs, and leading R&D service providers. Aim of Congruence 2010 was to explore roadmap to help transform Indian R&D ecosystem and make India the epicenter for global innovation.
The speakers also talked about what are the requirements of the industry to move it up in the value chain. Central theme of most of the discussions was about India’s evolutions as top R&D hub for global majors. Most of the speakers felt that to keep the growth going Indian firms should concentrate on innovation, not only for India but for global market. According to them creating an excellent team and leadership is the key to sustain this growth.
There were multiple sessions on talent attraction, management and retention. It is clear from the participation in those sessions that this is a key pain point for most of the captives.
Most heartening fact for people of this industry is that R&D Globalization has significantly evolved over the last few years, wherein most centers aspire to move from operating as a low cost center to a center with focus on ‘Innovation’ and ‘Global Leadership’. The economic slowdown over the last eighteen months has in fact helped accelerate this much needed change. Companies have also realized that their increasing focus on innovation and global leadership will significantly augment the value they offer to their parent companies and allow them to attract as well as retain top talent. But most interesting thing is that this did not happen at the expense of operating cost. In a recent operations benchmarking report, Zinnov adds the cost of running R&D centres in India has continued to decline over the last two years and stands at Rs 18.2 lakh ($38,199 or 27,028 euro) per person per year, a decline of 0.9% in rupee, 4% in dollar and 3.3% in euro terms in FY 2010, indicating signs of cost optimisation due to the constrained economic environment. According to this report R&D centres in India have helped parent companies save a cumulative of $40 billion for the last three years.
It is also clear that to fuel this innovation engine, without compromising the operations excellence, Product companies are constantly looking out for partners who can offer Strategic value, Core & non-core skills, Flexible scale, and cost benefit. There is a definite shift happening towards treating partners beyond resource suppliers. From engagement model perspective, though T&M is the most common one, there is definite intent in moving towards SLA based/ outcome based models. Companies like Blue Star Infotech, who focuses on engineering business outcomes for its customers will be able to leverage their outcome based engagement models and will be treated as strategic partners by product companies.
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