Innovation in India: The Future of Offshoring

142 Pages·2012·0.529 MB·English

by  Suseela Yesudian (eds.)

Innovation in India
Also by Suseela Yesudian
INDIA: ACQUIRING ITS WAY TO A GLOBAL FOOTPRINT (edited, Palgrave
Macmillan 2012)
Innovation in India
The Future of Offshoring
Edited by
Suseela Yesudian
Executive Director, Aditya Birla India Centre, London Business School, UK
Selection and editorial content © Suseela Yesudian 2012
Individual chapters © the contributors 2012
Foreword © Phanish Puranam 2012
Softcover reprint of the hardcover 1st edition 2012 978-0-230-30067-5
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First published 2012 by
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Contents
List of Tables and Figures vi
Notes on Contributors vii
Foreword by Phanish Puranam viii
Acknowledgements xi
1 Symphony Services – Playing a Different Tune 1
K. Balakrishnan
2 Globalisation of Research and Development Centre:
How GE does it in India 18
Barnali Chaklader
3 Quatrro BPO Solutions: Developing Outsourcing
Solutions Innovatively 30
Rajat Gera
4 The Offshoring Industry in India: Moving Up the
Value Chain? 49
Doris Rajakumari John
5 Dr Reddy’s Custom Pharmaceutical Services:
A Tailor-Made Breakthrough Strategy in Pharma
Offshoring? 74
Ananthi Rajayya
6 Legal Process Outsourcing Opportunity and
Cobra Legal Solutions 90
Sathyanarayanan Ramachandran
7 eInfochips: Product, Delivery and
Service Differentiation 103
Vrajlal K. Sapovadia
Bibliography 117
Index 124
v
List of Tables and Figures
Tables
1.1 Symphony’s main competitors 2
1.2 Symphony product and organisational innovation 11
1.3 IRP scheme 15
1.4 Symphony Innovation Program results 16
4.1 Innovations at JFWTC 59
5.1 Dr Reddy’s major global generic brands 78
Figures
1.1 Drivers important for global development 5
1.2 Impact of global software development on
company financials 5
1.3 MNC business models 8
1.4 Symphony organisational structure in January 2007 9
1.5 Symphony organisational structure in January 2009 10
1.6 Symphony PDLC ideas pipeline 13
3.1 Quatrro model: Value innovation 39
3.2 Quatrro’s new product development process 41
3.3 New service development model 42
7.1 Amplified Offshoring Model 108
vi
Notes on Contributors
K. Balakrishnan is Professor of Marketing at the SDM Institute for
Management Development, Mysore, India. He researches contracting
and corporate management.
Barnali Chaklader is Associate Professor of Finance at the Institute of
Management Technology, Ghaziabad, India. She researches account-
ing and control, corporate finance and strategic cost management.
Rajat Gera is Associate Professor of Marketing Management at
the Institute of Management Technology, Ghaziabad, India. He
researches service quality and its consumer consequences, e-learning,
sales force automation, innovation and technology, services market-
ing and product management.
Phanish Puranam is Professor of Strategy and Entrepreneurship
and Co-Director of the Aditya Birla India Centre at London Business
School. He is also Chair of the school’s Ph.D. programme. He
researches and consults on the design and management of strate-
gic relationships between organisations. His first book, India Inside
(2011), co-authored with Nirmalya Kumar, was published by Harvard
Business Review Press.
Doris Rajakumari John is Professor of Marketing at Chennai
Business School, Chennai, India. She has specialised in developing
case studies as pedagogical tools for management education.
Ananthi Rajayya is Lecturer at the Albertian Institute of Manage-
ment, Cochin, India.
Sathyanarayanan Ramachandran is Professor of Marketing at
Chennai Business School, Chennai, India. He researches brand
management, advertising and cross-cultural marketing.
Vrajlal K. Sapovadia is Professor of Finance and Accounting at IIM
Indore, India. He researches business strategy, corporate governance
and management accounting.
vii
Foreword
To many readers, ‘offshoring’ and ‘innovation’ may seem like strange
bedfellows. While India’s success at becoming the world’s hub for
offshored services is now common knowledge, it remains less clear
whether the country can make the transition from being the world’s
provider of fairly standardised knowledge work done to other’s speci-
fications, to becoming a genuine locus of innovation that has global
impact. The challenges seem fairly obvious: distance from customers
in the developed world, a surprisingly shallow pool of high-skilled
talent and an Intellectual Property (IP) regime whose robustness
is yet to be proven. On the other hand, the potential talent pool
remains deeper than elsewhere in the world, and if the global deliv-
ery model (the workhorse of the IT and BPO offshoring industries)
could be extended to higher-end innovation-related work, then tal-
ent in India could yet generate innovations for the world.
While the employment opportunities generated in an ‘innovation
as a service’ sector must necessarily be smaller than those in com-
modity services, there are nonetheless several reasons why develop-
ing such a sector in India may be worthwhile. Greater value added,
and therefore potentially greater profitability, may well generate
large diffusion-of-wealth effects. There is also a potential incubation
effect as individuals in the sector move on to become entrepreneurs.
In some sense, building an export-oriented innovation ecology may
prove to be an alternative to the existence of strong research-oriented
universities as breeding grounds for innovators, and such an ecol-
ogy would effectively be subsidised by global customers. Finally, an
‘innovation as a service’ sector is less likely (though not immune) to
be a hostage to wage arbitrage opportunities that arise elsewhere in
the world.
My own interest in the offshoring of services dates back at least
to 2003 when I began investigating early attempts by Indian firms
such as Dr Reddy’s Labs and Biocon to replicate the success of the
IT services industry in contract R&D in the life sciences sector.
A talented doctoral student (and now a professor at the Indian
School of Business), Kannan Srikanth, helped me learn about the
viii
Foreword ix
global delivery model as an organisational innovation. In our aca-
demic papers, we have analysed how this model takes work that was
formerly performed in one location and one firm, distributes this
work across multiple firms and locations, and specifies the means to
reintegrate the results.
In more recent work with Saikat Chaudhuri (Wharton), we have
been exploring how the model transfers to R&D services. A paral-
lel stream of research uses patented data to understand the nature
and impact of innovation originating in India, and involves co-
authors Tufool Al-Nuaimi (Imperial), Gerry George (Imperial) and
Suma Athreye (Brunel). Some of this research is discussed in my
book India Inside (Harvard Business Review Press, 2012) co-authored
with Nirmalya Kumar, my colleague at London Business School and
Co-Director of the Aditya Birla India Centre. The key point of the
book is that products that are ‘Made in India’ are not the only form
of innovation with global impact that India can produce; much
innovation that may occur for global customers and consumers
may be invisible to them unless Intel’s approach to branding its
microprocessor (‘Intel Inside’) were also to be applied to these Indian
contributions – hence the title.
I am thus particularly pleased to see this edited volume, in which
Dr Suseela Yesudian pulls together several cases that explore whether
and how the services-offshoring sector in India is making the transi-
tion towards greater value added and innovative work. These cases
were developed by academics in India as part of a case study project
titled ‘Innovation: The future of offshoring?’ hosted at the Aditya
Birla India Centre at the London Business School in 2009. The
Centre was funded through the generosity of an alumnus, Mr Kumar
Mangalam Birla, in memory of his father, one of India’s pioneer glo-
balisers. I have had the honour to serve as Co-Director of the Centre
for several years now. One of the mandates of the Birla Centre is the
development of case studies that showcase Indian business devel-
opments and enable these to be discussed in B-school classrooms
around the world.
I congratulate the authors of the cases contained in this volume.
Writing a case study using in-depth data from both secondary and
primary (interview) sources is a time-consuming task, but if done well
can result in a context for simulated problem solving by students, as
well as a documented slice of business history that can be useful to the