This document discusses offshore R&D in India and effective management strategies. It provides the following key points: 1) Offshore R&D in India can reduce costs by about 40% compared to the US while providing access to large pools of engineers. However, managing offshore teams requires addressing cultural differences. 2) Effective management of offshore R&D in India requires defining clear processes, frequent communication, monitoring metrics, and addressing cultural norms around decision making, hierarchy, and communication styles. 3) Not all work is suitable for offshoring. Critical, fast-paced, or core knowledge work may be better kept onshore due to complexity or time sensitivity. Offshoring general engineering work can

1. Dvir Zohar
054 – 5555668
dvir@simplesolutions.co.il

2. “My World”
World”

3. Agenda
Offshore R&D
Offshore in India
Effective management of offshore in India

4. Offshore Is Everywhere
Manufacturing Hi tech
manufacturing
textiles, toys, Services
cars, ….
call centers,
accountants, MRI,
presentations…
R&D

5. R&D Offshore Advantages
Lower cost – the cost in India is about 40% from the cost in the USA.
Higher availability of low level engineers
Close to new & large markets
High growth in technology culture (more PC’s, IT students, internet,
infrastructure etc.)

6. Some Facts About R&D Offshore
Started in the 80th (TI, Cadence)
The leader – India (12.7 B$ per year). About 700,000
employees (next is china)
Outsourcing and turn key projects
A few international research centers (Microsoft, Cisco,
Intel and others)
Most of the large technology firms have branches in
India and/or China.
Most of them continue to increase the number of their
employees at home and at LCG
They had problems but improved their management
over the years

7. (90’
India - Before the Revolution (90’s)
Barely functioning services
Government denied business requests
Low wages
Of college graduates
Success=going overseas 60% found jobs
Best educated Indians left India
Job for life
Women depend on family/husband for money

8. The High Tech in India Today
3 major companies – Tata, Infosys, Wipro
(above 100000 employees)
Many “small” companies (500 – 3000 employees)
800 R&D centers
300,000 new graduates each year, just ¼ are qualified to work
Shortage of people with experience, only 100 computer science PhDs,
only 7000 patents per year
Turnover of about 15 to 30 percents
Wages increase is about 15% in the last years. Wages triple from 0 to 3
years experience
Good quality (CMM, CMMI5)
VC’s are starting to invest (475M$ in 2009)

9. Examples for Offshore Activities (India)
Cisco Oracle Microsoft
Half of R&D 8500 developers 3000 developers
AMD Intel
GE
3B$ project 1B$ project
Chip design 4300 developers
Chip design
Airbus Ness/Sela
SAP
Java group part of the wing Outsourcing
for new plain Firms

10. If You Want to Be Competitive
Innovation
Much shorter time to market
Use effectively the LCG groups

12. Things That Will Make The Difference
Management from
Managers Communication
Israel
Development
Monitoring Recruitment
processes
Cultural daily
issues

13. Hofstede™
Geert Hofstede™ Cultural Dimensions
PDI – Power distribution in the organization
IDV – Individualism (Vs. collectivism)
UAI - Uncertainty Avoidance
90
80
70
60
50 USA
40 ISRAEL
30 INDIA
20
10
0
PDI IDV UAI

14. Management
Indian managers see employees as “servants”
Very slow in decision making
Most foreign firms prefer returned Indians from the west as managers
Define management procedures (similar to Wintegra
with some adjustments to the Indian culture)
Explain your values (people, motivation …)
Train your managers
Be formal and acknowledge hierarchy

15. Management from Israel
Indians is willing to take higher risks with someone they trust
Respect them
Let them understand the whole picture
Let them feel as part of Wintegra
Remember their holidays, birthdays ..
The Indians do not express their disagreements (“lets discuss
it later …)
Give them a presentation about Israel

16. Monitoring
Very important
Not naturally done, they can live with contradictions
Fast monitoring
Metrics - define many, give them to fill in (time, quality, investments,
work in process …)
They need a PMO

17. Recruitment
CV – out
Universities - out
 Friend brings friend
 Formal test (professional + personality)
 Give your employees reasons to stay

18. Communication
The key to success
Daily - written communication
(chats, Email)
Weekly – teleconference
Monthly – Video conference
Quarterly – Meeting face to face
Establish communication at all levels / positions

19. Development process
Usually, they don’t have their own process
Very disciplined
Looking for new methods (first at Google survey of “design pattern”)
Quality – after price
Excellent documentation
Need to be trained

20. Daily issues
Willing to work hard
Punctuality will be an issue (delay in meetings)
Dress conservatively
Business card is important
Indian rarely turn off their cell phones
Indian likes to talk about family and home

21. Not Everything Can and Should Be Offshored
Critical
Fast
Complicates
Core knowledge

22. Summary