Oct 11 2005
IBUS 579 10/11 Discussion
Subject: Product Development; Simens, India Development Center
1. Distributed product development makes good business sense. The key challenge is execution.
2. Beyond Language Difference:
a. Labor/employment culture: what is “loyal”, what is not? long employment and vacation vs. short employment and vacation.
b. Communication style/norm: hard to say “no”; the scope of “no problem”, etc.
c. Technology expertise: large system vs. personal computers—expectation of stable vs. unstable systems.
d. Educational level and social dynamics: Why India has soooo many engineers? Social mobility …
e. Regulations: immigration, labor movement
3. Simens Challenges:
a. Giant, Bureaucratic company
b. Complicated organizational structure (matrix structure)
c. Diversivied customers (geo location, product cycle, quality requirements, etc.)
d. Legacy system overhead (huge: code base, portofolio of systems to maintain, etc.)
e. Best #2 mentality (risk-aversion)
f. Global presence (tensions among different CoC vs. Regionals, cultural, style differences, communications, travel overhead, etc.)
4. Dinosaur has two brains: why Simens still so top-down, continental centric?
5. How to balance pursuit of “synergy” vs. “access to market”?? How bad is duplicating work in US and Germany? What if it speeds up response time?
6. Bangalore Challenges:
a. Wage pressure (per MS CFO, outsourcing still saves 1/2 cost)
b. Cultural differences: not testing “5, 6, 7, 8 …”
c. Infrastrucutre: polution, power, etc. (first and last paragraph)
d. High turnover rate: dis-incentive for HR investment, training, etc.
e. IP concerns
Overall, the Germans in my group has a lot to complain about Simens and German labor market condition. The Indian is intensely interested and very philosophical about outsourcing.
My thoughts:
1. Simens can further leverage US resources: e.g. outsource outsourcing to Boca Raton! e.g. MS has 1/5 engineers from India/Paki, US has the immigrant pool and experiences dealing with outsourcing.
2. How to find/train/use compatriots like us may be very important to bridge up both sides.
3. Why Simens did not involve the Indians during product design? If senior Indian guys help to draft the specification, it makes a lot difference!
4. It is simplistic to assume a more detailed spec will result in more efficient development. It is as important to transfer the “intangibles” (see “Beyond Language Difference” and my point #2)