Service Offerings- Satyam Industrial Practice Product Development

1. Product Engineering 2. Managing Complexity 3. Electronics Control- Motion – Power 4. Continuous Product Improvement 5. Product Data Management 6. Supplier Collaboration

Supply Chain Management

1. Demand and Supply Planning including Forecasting 2. Global Strategic Sourcing 3. Supplier Charge Back

Manufacturing

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 Planning

After 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 Development Lifecycle in Globalized Era

- Ram Prasad (ramprasad.srivats @gmail.com) Part I: Trends, Drivers and ConstraintsPart I: Trends, Drivers and ConstraintsPart I: Trends, Drivers and ConstraintsPart I: Trends, Drivers and Constraints and Opportunities. and Opportunities. and Opportunities. and Opportunities. Trends:Trends:Trends: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 towards to manufacturing of finished product. In recent years, high- technology companies are facing relentless pressures on their R&D and product development due to increase in consumer demand for : innovative product solutions, shrinking product life- cycles and declining price points. In this regard, global sourcing solutions offer an increasingly attractive value proposition to address these pressures, and product development is the inevitable next stage to enhance the competitiveness 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 are disaggregating their operations and are more focused to delivering value added products in terms of – enhanced value creation, cost- efficient and globally marketable products. As a result, these companies reap the benefits that go beyond the simple cost reduction mechanism to product innovative mechanism which quintessentially adds value to both their value 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 and opportunities of adopting global sourcing in product development; Part Two explores how companies are executing their global sourcing strategies by evolving their organisational architecture. Key Imperatives of HighKey Imperatives of HighKey Imperatives of HighKey Imperatives of High---- Tech Product DevelopmentTech Product DevelopmentTech Product DevelopmentTech 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 ImperativesProduct Development Key ImperativesProduct Development Key ImperativesProduct Development Key Imperatives The high-technology is always in a state of flux. Companies are facing tremendous pressure to innovate and create new products in consonance to the business demands, while dealing with decelerating 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, new technologies 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.

Leveraging Global Sourcing to Address Product DeveLeveraging Global Sourcing to Address Product DeveLeveraging Global Sourcing to Address Product DeveLeveraging Global Sourcing to Address Product Development Imperatives lopment Imperatives lopment Imperatives lopment Imperatives In order to address these imperatives, and their challenges product development executives are increasingly turning towards global sourcing opportunities. With high-tech companies becoming more focussed in disaggregating their product development value-chains they are closely moving towards discrete modules of work by identifying key global locations in their supply chain mechanism 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 Product Product Product ConceptualisationConceptualisationConceptualisationConceptualisation

Key DriversKey DriversKey DriversKey Drivers

• Developing Multiple Product Alternatives through increased R& D and Tech-spend

Key EnablersKey EnablersKey EnablersKey Enablers

• Deep Technological Expertise.

Market AssessmentMarket AssessmentMarket AssessmentMarket Assessment • Reaching to Emerging Markets- BRICS- Brazil/ Russia/ India/ China markets

• Inherent assessment of the markets

Product Design & Product Design & Product Design & Product Design & DevelopmentDevelopmentDevelopmentDevelopment

• Innovation to Consumption model

• Lower Development Costs.

• Product Improvisation

• Use of infrastructure mechanisms to develop new product designs.

Product TestingProduct TestingProduct TestingProduct Testing • Low Costs • Faster time to market • Product Improvisation

• Product Testing • Quality Assurance

Product ReleaseProduct ReleaseProduct ReleaseProduct Release • Enhanced Market Reach

• Customized Products

• Product Launch

Product SustenanceProduct SustenanceProduct SustenanceProduct Sustenance • Lower Cost • Product

Enhancements

• Basic Infrastructure Provider towards product sustainability.

Global Sourcing Drivers and Enablers by Product Lifecycle Stage Desegregation of Product Development Lifecycle Desegregation of Product Development Lifecycle Desegregation of Product Development Lifecycle Desegregation of Product Development Lifecycle

Any consulting company involved in high end customer solutions, should embark on disaggregating of the products along the various stages of product development lifecycle. As companies involved in developing improved cost structures, should identify between its in-house capabilities and outsourcing of its products from specialised partners around the world. Global sourcing adoption is the highest in product development. This enables the companies to adopt a low cost – high revenue models. Other features which are intricately woven around this model includes is- it develops the supplier networks across the globe which is one of the key features 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 drawing them towards more sophisticated engineering and design works, where by virtually handing over the every aspect of product development, which is key to vendor development management. This is particularly true when a vendor demonstrates deep capabilities in specific area of software or hardware technology, and when these capabilities will enhance the product success as measured by performance, feature-set and price value equation. Global Sourcing Stages of MaturityGlobal Sourcing Stages of MaturityGlobal Sourcing Stages of MaturityGlobal Sourcing Stages of Maturity Although hi- tech companies are leveraging global sourcing across many stages of product lifecycle, most companies cannot immediately engage or realize benefits across- all stages of these stages. It is mandatory for IT Consulting Companies like Sat yam to observe these developments which are leading towards leveraging of global sourcing strategy in product development cycle to visualise the next stages of maturity by envisaging the future to transfer all responsibility pertaining to outsourcing where by they can enhance their value architecture with their clients.

Global Sourcing Stages of Maturity- Various Stages of Maturity for Hi- Tech Design & Engineering.

A

Level IV: Benefits Impacting Bottom Line

Level V: Benefits Impacting Top Line

Level I Product Design & Developme

nt

Level II Design

Ownership &Product

Development

Level III Partnering to drive the

D&E agenda Maturity Stage

Level VI: Benefits Additional Revenue Streams

Benefits Impacting Bottom LineBenefits Impacting Bottom LineBenefits Impacting Bottom LineBenefits Impacting Bottom Line

• Reduced Investment in Product Development • Reduced Cost of Product Operations • Enhanced Productivity of Engineering Workforce

Benefits Impacting Top LineBenefits Impacting Top LineBenefits Impacting Top LineBenefits Impacting Top Line • Recharged Innovation Cycle • Reduced Time to Market for New Products • Improved Product- Market Fit • Longer Product Life (with extensions) • Additional Revenue Streams

Companies will go through different stages of maturity as they are in the process global delivery model and their product development lifecycles evolve with their operating models and establish a closer collaborative relationship with their global sourcing partners. Those at the leading edge of this transition are evolving from superior cost- driven model to value enhancement model reflecting the trends of market orientation and market acceptability. Business Impact of Global Sourcing in Product Development Companies realize the tremendous impact as they leverage the range of capabilities offered through global sourcing model

Benefits Impacting the Bottom Line Global sourcing not only reduces the costs by leveraging the capabilities of offshore capabilities in low-cost centeres, but it also enhances the productivity factors also, by enabling to work towards new product development processes and programs leading towards improved program management. As global sourcing model lowers down the product development costs, companies tend to stretch their product development budgets farther- which enable better and quicker analysis in developing new products with better features. This move further lends credence towards fostering innovative 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. Mature companies are using global development teams to accelerate development lifecycle times, thus meeting the market requirements. In this way, companies are moving away simple value addition orientation to value enhancement orientation through superior innovation cycles, superior delivery mechanisms, cutting edge technologies to improve their products. In this way, they are beating the 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 of the 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 line for 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 should leverage their skills to build customised products to cater to each of these segments as these markets are witnessing an exponential growth across various product segments. Conclusion: As matured companies like Satyam Consulting operates across different verticals and different spectrum on services delivery, they certainly know when to introduce new products to market, and have the ability to quickly market them. In the rapidly becoming flat world, new market conditions are creating new challenges in bringing the right products to market quickly. The ability to adapt to various market conditions entails companies to quickly spot new opportunities and address new challenges and take advantage of new opportunities that flat world is creating, will determine the long term winners and losers in the high tech market place. Satyam with its inherent capabilities gained over more than three decades of experience in product development consulting across different models across geographies would entailing its efforts to create new solutions for companies in the flat world by realising various product innovations in product development cycles by embarking on new design and development partnerships. With the flat world offering huge potential, only companies that view globalisation with strategic and long term orientation will be able to execute their strategies well; will make use of the opportunities. Sat yam has superior capabilities to assist companies in leveraging global partnerships to create product innovation, while optimising new product development with cost variables under control.