Service Offerings- Satyam Industrial PracticeProduct Development 1. Product Engineering 2. Managing Complexity 3. Electronics Control- Motion – Power 4. Continuous Product Improvement 5. Product Data Management 6. Supplier CollaborationSupply Chain Management 1. Demand and Supply Planning including Forecasting 2. Global Strategic Sourcing 3. Supplier Charge BackManufacturing 1. Factory Scheduling and Sequencing 2. Manufacturing Execution Systems 3. Lean Manufacturing 4. Operations Planning.Sales and Marketing 1. Channel Management 2. Marketing 3. Market Intelligence ( Business Intelligence) 4. Order Management 5. Sales 6. Service 7. CRM Analytics 8. Sales PlanningAfter Sales Service 1. Network Optimisation 2. Inventory Planning 3. Product Life cycle and Logistics Management 4. Opportunity Management 5. Contract Management 6. Dealer Management
High Tech Companies and their Product DevelopmentLifecycle in Globalized Era - Ram Prasad (ramprasad.srivats @gmail.com)Part I: Trends, Drivers and Constraints and Opportunities.Trends:Global sourcing has become an important parameter in the high- end technology manufacturing –causing drastic shifts in how and where the product components are sourced and leading towardsto manufacturing of finished product. In recent years, high- technology companies are facingrelentless pressures on their R&D and product development due to increase in consumer demandfor : innovative product solutions, shrinking product life- cycles and declining price points. In thisregard, global sourcing solutions offer an increasingly attractive value proposition to addressthese pressures, and product development is the inevitable next stage to enhance thecompetitiveness of the high-tech companies in this increasingly becoming borderless world.With global sourcing and procurement of products becoming the order of the day, companies aredisaggregating their operations and are more focused to delivering value added products in termsof – enhanced value creation, cost- efficient and globally marketable products.As a result, these companies reap the benefits that go beyond the simple cost reductionmechanism to product innovative mechanism which quintessentially adds value to both theirvalue creation stream and revenue generation stream.This paper extrapolates the impact of the global sourcing on product development ( R&D)operations of high-tech companies. Part One examines the trends, drivers and constraints andopportunities of adopting global sourcing in product development; Part Two explores howcompanies are executing their global sourcing strategies by evolving their organisationalarchitecture. High-Key Imperatives of High- Tech Product Development • Reduce product development cycle-time; improve time to market and creating enhanced value creation. • Maximise value obtained from increased tech-spend in developing new products. • Accelerate the innovative mechanisms and creating clusters for innovative product developments. • Managing the cost of product operations, for both new and mature product lines. • Increase the success rate of new products, through improved fit with market needs.Product Development Key ImperativesThe high-technology is always in a state of flux. Companies are facing tremendous pressure toinnovate and create new products in consonance to the business demands, while dealing withdecelerating price points and shrinking profitability margins. These trends are driven by: • Rapid assimilation of technology into every day life and thereby changing the landscapes of technology mechanisms. • Increased consumer demand for newer products and technologies. • Hyper competition from low- cost locations.
• Emerging new business models and business landscapes.This pressure translates several key imperative for the companies to develop new products, newtechnologies and new markets across global locations. • Development of new product platforms- Companies need to evolve towards development of new product platforms which form the basis for multiple product development, fuelling innovation within the organisation. • New Technological Solutions – Developing new solutions should be the mantra for the corporations , enabling them to move towards solutions centric from product centric operations. • New Markets- Creating new products, markets and technology enables the companies to leverage their IP ( Intellectual Property) property . • Management of Product Development Costs- Managing costs and complexities of far flung product development operations, both within and outside the company’s operations. DevelopmentLeveraging Global Sourcing to Address Product Development ImperativesIn order to address these imperatives, and their challenges product development executives areincreasingly turning towards global sourcing opportunities. With high-tech companies becomingmore focussed in disaggregating their product development value-chains they are closely movingtowards discrete modules of work by identifying key global locations in their supply chainmechanism for better delivery mechanism, while factoring all imperatives such as: costs,competencies, skills sets, location for development and a closer association with the customer.Product Key Drivers Key EnablersConceptualisation • Developing Multiple • Deep Technological Product Alternatives Expertise. through increased R& D and Tech-spendMarket Assessment • Reaching to Emerging • Inherent assessment Markets- BRICS- of the markets Brazil/ Russia/ India/ China marketsProduct Design & • Innovation to • Use of infrastructureDevelopment Consumption model mechanisms to • Lower Development develop new product Costs. designs. • Product ImprovisationProduct Testing • Low Costs • Product Testing • Faster time to market • Quality Assurance • Product ImprovisationProduct Release • Enhanced Market • Product Launch Reach • Customized ProductsProduct Sustenance • Lower Cost • Basic Infrastructure • Product Provider towards Enhancements product sustainability.
Global Sourcing Drivers and Enablers by Product Lifecycle StageDesegregation of Product Development LifecycleAny consulting company involved in high end customer solutions, should embark ondisaggregating of the products along the various stages of product development lifecycle. Ascompanies involved in developing improved cost structures, should identify between its in-housecapabilities and outsourcing of its products from specialised partners around the world.Global sourcing adoption is the highest in product development. This enables the companies toadopt a low cost – high revenue models. Other features which are intricately woven around thismodel includes is- it develops the supplier networks across the globe which is one of the keyfeatures in new product development.Another area which is emerging and its widely practiced by IT Consulting Companies is to:leverage the competency of outsourcing partners towards more value added works by drawingthem towards more sophisticated engineering and design works, where by virtually handing overthe every aspect of product development, which is key to vendor development management. Thisis particularly true when a vendor demonstrates deep capabilities in specific area of software orhardware technology, and when these capabilities will enhance the product success as measuredby performance, feature-set and price value equation.Global Sourcing Stages of MaturityAlthough hi- tech companies are leveraging global sourcing across many stages of productlifecycle, most companies cannot immediately engage or realize benefits across- all stages ofthese stages. It is mandatory for IT Consulting Companies like Sat yam to observe thesedevelopments which are leading towards leveraging of global sourcing strategy in productdevelopment cycle to visualise the next stages of maturity by envisaging the future to transfer allresponsibility pertaining to outsourcing where by they can enhance their value architecture withtheir clients.Global Sourcing Stages of Maturity- Various Stages of Maturity for Hi-Tech Design & Engineering.
Level IV: Benefits Impacting Bottom Line Level III Level V:Partnering to Benefits drive the ImpactingD&E agenda Top Line Maturity Stage Level II Level VI: Design Benefits Ownership Additional &Product Revenue Development Streams Level I Product Design & Developme nt A
Benefits Impacting Bottom Line • Reduced Investment in Product Development • Reduced Cost of Product Operations • Enhanced Productivity of Engineering WorkforceBenefits Impacting Top Line • Recharged Innovation Cycle • Reduced Time to Market for New Products • Improved Product- Market Fit • Longer Product Life (with extensions) • Additional Revenue StreamsCompanies will go through different stages of maturity as they are in the process global deliverymodel and their product development lifecycles evolve with their operating models and establish acloser collaborative relationship with their global sourcing partners. Those at the leading edge ofthis transition are evolving from superior cost- driven model to value enhancement modelreflecting the trends of market orientation and market acceptability.Business Impact of Global Sourcing in Product DevelopmentCompanies realize the tremendous impact as they leverage the range of capabilities offeredthrough global sourcing modelBenefits Impacting the Bottom LineGlobal sourcing not only reduces the costs by leveraging the capabilities of offshore capabilities inlow-cost centeres, but it also enhances the productivity factors also, by enabling to work towardsnew product development processes and programs leading towards improved programmanagement.As global sourcing model lowers down the product development costs, companies tend to stretchtheir product development budgets farther- which enable better and quicker analysis indeveloping new products with better features. This move further lends credence towards fosteringinnovative products and a higher success rate for new product introduction.Benefits Impacting the Top Line:Global sourcing model enables companies to look beyond cost reduction model. Maturecompanies are using global development teams to accelerate development lifecycle times, thusmeeting the market requirements. In this way, companies are moving away simple value additionorientation to value enhancement orientation through superior innovation cycles, superior deliverymechanisms, cutting edge technologies to improve their products. In this way, they are beatingthe competitor’s product by customised product differentiation to command higher market prices.Companies are also improving their competitive edge by focusing on internal value accruals ofthe products by designing more valuable product designs and product line management tasks,and outsourcing either commodity tasks or more specialised tasks to their partners.
Additionally, for mature products, top line benefits accrue in the form of re-casting the product linefor additional sources of revenue or extending the life of mature products with additional features,perhaps directed towards different market segments.Tapping into Emerging Markets:Global markets are expanding like never before in emerging markets of BRIC countries, (namely,Brazil, Russia, India and China). As the opportunity beckons companies in full, they shouldleverage their skills to build customised products to cater to each of these segments as thesemarkets are witnessing an exponential growth across various product segments.Conclusion:As matured companies like Satyam Consulting operates across different verticals and differentspectrum on services delivery, they certainly know when to introduce new products to market, andhave the ability to quickly market them. In the rapidly becoming flat world, new market conditionsare creating new challenges in bringing the right products to market quickly. The ability to adapt tovarious market conditions entails companies to quickly spot new opportunities and address newchallenges and take advantage of new opportunities that flat world is creating, will determine thelong term winners and losers in the high tech market place.Satyam with its inherent capabilities gained over more than three decades of experience inproduct development consulting across different models across geographies would entailing itsefforts to create new solutions for companies in the flat world by realising various productinnovations in product development cycles by embarking on new design and developmentpartnerships.With the flat world offering huge potential, only companies that view globalisation with strategicand long term orientation will be able to execute their strategies well; will make use of theopportunities. Sat yam has superior capabilities to assist companies in leveraging globalpartnerships to create product innovation, while optimising new product development with costvariables under control.