Leveraging Technology for Transcontinental Outsourcing

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Leveraging Technology for Trans-continental
Outsourcing

• Swami Subramaniam, MD, PhD
• Chief Executive

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The Y2K problem
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Source McKinsey
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Reengineering processes

• Round the clock shifts (24/7)
• Cheaper, locally made capital equipment
• Reduced automation

Source McKinsey
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From IT services to RD
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Moving beyond cost arbitrage

• Availability of distinctive skills (CMM level 5)
• Ability to hire better trained talent (PhDs)
• Selective hiring
• More managers to staff

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Fortune 500 company RD Facilities in India
100 Fortune 500 companies - including Delphi, Eli
Lilly, Hewlett Packard, General Electric, Daimler
Chrysler and others - have put up RD facilities
in India over the past five years
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General Electric
GE's John F Welch Technology Center in Bangalore
is the company's largest such facility outside
the United States. With an investment of US60
million, it employs 1,600 researchers and plans
to raise the number of staff to 2,400.
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Motorola
a technology company would fail in its IQ test
if it did not have anything significant in India.
Theres quality, speed, process orientation in
India and at a cost thats still attractive."
Mike Zafirowski, President and COO, Motorola

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Intel
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Microsoft
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What about lifescience?
Source McKinsey
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India and lifescience offshoring

• The latest Ernst and Young study has identified
  India as an emerging hub for collaborative and
  outsourced RD in drug development, biotechnology
  and chemicals.
• Indian companies have developed manufacturing
  processes for eight of the world's top 10
  blockbuster drugs.

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The lifescience off-shoring model

• IPR issues
• Materials transfer
• Interdisciplinary
• Not amenable to a rigid workflow management
  system
  
• Labor accounts for a small portion of costs
• Labor shortages as a driver Chemistry
• Standardized productivity/quality models lacking
• Performance/productivity linked rewards is
  difficult

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The six steps of software development

• Project initiation
• Analysis
• Logic design
• Physical design
• Implementation
• Maintenance

Linear, high probability of completion
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Tools for collaboration
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Take Notes, for example. In talking informally
with tens of organizations, I have yet to find
one that believes that Notes transformed how
groups worked. Its a pretty good information
distribution system and not too shabby, albeit
slow, for e-mail. But show me a company where
Notes has transformed how work is done and
decisions are made, and Ill water-ski to
Nantucket in January. Davenport 1993
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Web-based collaboration tools

• 24 hour progress monitoring systems
• Access to files and code under development

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Living repository

• Web-based information and document repository
• Basic unit Document
• Annotation and inter-referencing of documents
• Inbuilt translation server that can convert any
  format into searchable or viewable formats
  
• Access controls
• Issue Flexibility vs standardization

Carnegie Mellon
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Customer
vendor
High-bandwidth Leased line connectivity
Data Video Images Voice
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Collaboration is about people
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Spatially based collaborative systems

• Collaborative virtual reality
• MUDs
• Multimedia communications

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Space is the opportunity place is the understood
reality

• Spaces are not places
• Places, not spaces, frame appropriate behavior
• Places have social meaning
• Different media have different spatial properties

Source XEROX PARC
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Multi-User Dimension
Synchronous asynchronous communication
Informal History Jupitermulti-media exten
sion to a pure text based MUD mixed metaphor

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asynchronous
synchronous
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Collaboration Models
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Distributed Collaborative Software Development
Infosys
USA
India
Software architecture
Database design and Optimization
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Distributed Collaborative Software Development
USA
India
Hot Phase
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Distributed Collaborative Drug Discovery
USA
India
Target ID/Validation HTS
Lead Optimization
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Choice of models

• To supplement staff
• Build turnkey projects or provide ongoing
  support
  
• Assistance in building own centers
• Build, operate and transfer facilities
• To provide specialized assets
• Joint ventures

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Hub and spoke
India
EU
PGs connect and develop hub
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Off-shoring Less is more

• Adjacent activities
• From manufacturing to designmanufacturing
• From Chemistry to Chemistry ADME
• Adjacent markets
• HP and digital cameras
• Synthetic to natural products

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Summary

• Do you have an Off-Shoring strategy? (your
  competition does!)
  
• Are you willing to reengineer processes to
  extract maximum value from off-shoring?
  
• Do you believe technology has limits Or do you
  believe technology has possibilities?

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ProCitius Research Chemistry Research Centre, Che
nnai, India
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Fast forward drug development