Global Innovation Centres

Global Innovation Centres

Surag Ramachandran

Software development in many multinational companies is an in-house function as opposed to the old days when it was outsourced. Many companies made the switch to in-house development when they found that it is not easy to have a competitive edge when software development is outsourced. Offshore development to India was here to stay because of the availability of the large volume of talent who are equipped with strong domain knowledge that has been acquired over a period of many years. During the offshore development history of the last thirty years or so, numerous software professionals developed a strong expertise in their respective domains. As the part of offshore wave, these multinational companies, especially those from US and Europe, opened their Research and Development Centres in India. Many of them opted to retain these departments as a Cost Centre, rather than a Profit centre. As time passed, offshore centres became places where similar work can be done at a low cost. The result was a high sentiment among the existing workforce in the home location that required them to. “Get ready to train your substitute in India”. Such a sentiment resulted in a fear that offshore centres are going to take away local jobs. It was not easy for the substitutes too as the knowledge transfers were very inefficient. The need of the hour was to develop more efficient systems and utilize the offshore development centres for efficacy, rather than substituting the existing workforce merely due to cost reasons.  Multinational Companies had unique problems to solve and there were not many vendors out there who developed customized software for them. Service companies began to pitch in, but the focus seemed to be more concentrated on maintaining billable resources. Many of the resources moved across various projects and several resources were recruited every year in India, a place that has no shortage of Engineering Colleges.

Though not all Engineering graduates were job ready, organizations were willing to train for gaps and this resulted in many such candidates entering the system. Additional training led to an increase in cost and at the same time, since opportunities opened up for the (now job ready) candidates, attrition also picked up at the same pace.

When most of the “business as usual” components started to get computerized, the special needs of the multinational companies had to be met for improving and optimizing their performance.

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For that, more than numbers, quality professionals were being demanded. Quality folks were expensive, but it was found that with quality came efficiency – sometimes as much as 3 times the regular efficiency.

This also meant hiring from premier institutions.

Newer technologies were also used for solving the newer issues. If analytics was used in earlier days for batch executions, later they started using data science methodologies to solve the bigger and more sophisticated issues. Global Innovation Centres were established in India not only by the US and European companies, but also by the Asian giants. Innovation Centres are not set up because of a cost advantage. At least not by the Asian multinational companies. The focus was on innovation and to achieve that, they recruited top talent from leading engineering colleges. They also used the advanced technology. Some of these companies looking to set up innovation centres even had collaborations with various companies in India who helped set up the office for them in India and when it reached a certain level of maturity, was handed back to the multinational company as a completed project. Now the parent organization could run the show.

New innovation centres in India begin like start-ups. They are set up as a Private Limited company in India and go through all the same processes. Employees who like the challenges associated with the start-ups usually thrive in such environments. If the employee is looking to be associated with a brand, they get that as well in the form of the branding and funding from the parent company. And those who are looking to solve problems, there’s plenty of scope to innovate. The parent company generally throws up a short problem statement (usually in one line) and the innovation centres need to come up with creative and feasible solutions. Problems are solved by discussion, attending business workshops, and brainstorming. Detailed requirements are generated and then categorized. These requirements then become the features of various applications.

The solutions in one area are also applied in another related and sometimes altogether different area. The global innovation centre employees take as much pride as they would when working for the parent company, developing strategic software applications.

Most service companies cannot offer such kind of work to challenge their employees. And that is why global innovation centres attract the best of talent and why they are here to stay. So if you get an opportunity to manage a project for an innovation centre, be sure you grab it with both hands.