Wipro Technologies Optimizing New Product Development

Transcription

1 Wipro Technologies Optimizing New Product Development by Professors Keith Goffin and Rick Mitchell Cranfield School of Management This case study will be published in Goffin, K. and Mitchell, R. Innovation Management: Strategy and Implementation Using the Pentathlon Framework. 2 nd Edition, Palgrave 2009, ISBN

2 MAIN CASE: WIPRO TEC HNOLOGIES, INDIA OPTIMIZING NPD 1 Before reading this case, consider the following generic innovation management issues: What are the potential problems that arise when new product development is conducted at multiple sites and across organizational boundaries? How can these issues be addressed in the NPD process? What are lessons that can be learnt from NPD projects? What should companies do to stimulate learning that is not just related to specific new product development projects? Wipro Technologies is a world leader in IT Services with revenues of over $5B and more than 97,000 employees around the world. It serves a wide range of sectors including manufacturing (18 per cent of revenues), banking and financial services (17 per cent), retail and transportation (16 per cent), and technology (13 per cent). Wipro is also the world s largest provider of R&D services and employs over 18,500 engineers in this domain. Founded over twenty five years ago, it has eight development centres, including major facilities in Bangalore, India. It provides offshore product engineering for a wide range of companies covering automotive electronics, medical devices, telecommunications, computing (hardware and software), consumer electronics, semiconductors, avionics, and industrial automation. The company has an approach that it calls Extended Engineering, whereby clients can outsource any part of the value chain, including complete product development, product sustenance, and support. The demand for cost-effective product development is high, as companies attempt to bring products to market faster but at the same time reduce costs. Offshore Engineering The downturn in the world economy has limited the amount of money that many companies can afford to invest in R&D and heightened the interest in offshore engineering. Advances in information technology have made it easier to co-ordinate outsourced activities and the number of companies using this approach has increased significantly. Sachin Mulay, General Manager - Strategic Marketing, says there are a number of factors driving companies towards offshore engineering. Initially, it was the cost advantage that caught people s attention. That is still important but there has been subsequent recognition that offshore engineering can improve speed to market and the quality of the finished product. Interestingly, companies are now starting to recognize that we can not only help them with product development but also give them access to leading edge ideas on R&D management. Where are the leading edge ideas being generated? We currently manage over 1000 R&D projects a year and so we want to learn as much as possible about these, so we can apply it in the future for our clients says Mulay. In addition, the relatively new Wipro Council for Industrial Research is creating a network of domain and technology experts from Wipro, who are working in collaboration with leading academic institutions and industry bodies to study market trends. The Council has been set up to address the needs of Wipro s customers, specifically to look at the innovative strategies that will help them facilitate their IT and business strategies and gain competitive advantage. Making Extended Engineering Work 1 K. Goffin and R. Mitchell

3 It is well known that co-location makes NPD teamwork easier. However, as an offshore R&D service provider, Wipro always has to deal effectively with multiple sites, organizational boundaries, and a global delivery model. A. Vasudevan is the Vice President of VLSI & System Design and manages over 2100 engineers working on clients projects. He has clear views on the challenges in new product development and says, We must excel at running multiple-site projects. To achieve this, we put a lot of emphasis on defining roles and responsibilities at the beginning of projects. We also have a handshake concept, where we put milestones into the schedule to deliberately check that both parties are 100 per cent satisfied with both the technical progress and quality of our communications. To apply the handshake concept effectively, Wipro engineers need to be technology experts and also highly skilled project managers. As part of our Talent Transformation programme, engineers receive intensive coaching in cross-cultural issues, project management techniques, optimizing communications, and negotiation. These skills are all essential for our work that covers multiple sites, different time zones, disparate organizations, and diverse cultures, says Vasudevan. Wipro also has a strong mentoring scheme whereby experienced project leaders support their more junior colleagues in learning these skills and ensure that tacit knowledge is transferred from one generation of engineers to the next. Technical Challenge The projects that are given to Wipro by their clients are technically very challenging and the devil is in the detail. For example, an innovative start-up company recently came to Wipro for help in achieving their goal of producing PC-based gaming hardware with such exceptional performance that the gaming community would be really impressed. One of the limitations of previous games was that the pictures generated were not that realistic, for example impacts and the movement of debris were not realistically represented (and did not follow the laws of physics). But game enthusiasts do not want realism, they want reality. So there was a need to produce the computational power (in hardware and software) that could ensure that the pictures generated were real and the movement of every object, be it a car involved in a collision or a bullet ricocheting off a wall, followed an exact, calculated path. The goal was clear but achieving it was by no means simple. Normal game processors at the time were accurately calculating the path of about 40 objects but that was insufficient to represent the movement of, for example, an avalanche in a skiing game. Calculating the exact way an avalanche will move requires a set of very complex physics algorithms to be coded, massive use of memory in making the calculations, and fast hardware to support calculations that will accurately pinpoint the movement of over 40,000 objects. High-performance hardware with ASIC (Application Specific Integrated Circuit) technology needed to be developed hand-inhand with the software. The technical challenge that Wipro faced was matched by a management challenge of equal magnitude. The client, game developers, key suppliers, and some of the owners of the required IP (intellectual property) were spread across the globe, and time-to-market was crucial as the idea of using physics algorithms in gaming software had already been muted (and there were rumours that other gaming companies were working on it). In such a situation, the project management needed to be executed flawlessly so that the physics hardware and software would be available on-time project. Rising to the challenge, the development team met all the milestones and passed all of the technical tests first-time. Most importantly, this enabled their 2 K. Goffin and R. Mitchell

4 client to be first-to-market with the capability to represent the laws of physics 100per cent accurately in pictures pictures that show true-to-life explosions that cause dust and debris, characters with human movement, clothes that drape and tear the way you would expect, and dense smoke and fog that billow around an object. Wipro s development expertise was initially seen by some clients to be purely technical. That meant that clients projects were managed using their own NPD processes. However, increasingly clients are recognizing our process expertise and are interested in us helping them speed-up their own processes. Wipro conducts so many projects each year that we have a greater opportunity to learn about the strengths and weaknesses of the product development process than many of our clients, who work on a more limited number of projects, says Vasudevan. After every project we analyze what the technical and managerial lessons are, and in the VLSI Design space we have defined our design methodology called EagleVision. Effective reuse and automation are the basic tenets of this design methodology. Serving the Service Sector Although Wipro is very active in electronics and manufacturing, it also has a history of working in the service sector, particularly banks and financial services. These clients are served by a specific organization that has gained significant expertise in the different field of supporting new service development. Prudential is a leading life and pensions supplier in the United Kingdom, with a customer base of around 7 million. The company had numerous call centres spread across diverse locations in UK, with each call centre dedicated to handle customer enquiries related to a single product line. This meant that customers had separate numbers for each of their products and the call centre consultant had to sometimes transfer them to a different department for each product. As a strategic IT partner Wipro rationalized Prudential s product categories and business processes, and provided an integrated view of transactions across products. The most important initiative was the integration of multiple front-end customer services applications into a single consolidated system. This will give Prudential s customer service agents a consolidated view of the customer allowing them to deal with a significantly larger number of transactions. Prudential will be able to deliver on the brand promise of one operation, reducing costs and delivering even better customer service. The Innovation Council and the Future One of the potential dangers of R&D consultancy work is that all of the innovation at Wipro could be solely in response to clients specific requirements. Management recognized that innovation should not be solely project-driven and several years ago formed the Innovation Council, made up of senior managers from Wipro and some of their leading clients. We recognized that we consistently need to push forward our own expertise. From our knowledge of a wide range of technologies, we saw that we could identify opportunities, says Mulay. The Council brings understanding to the changing business and consumer landscape in key business domains, spots the latest industry trends in various technologies, looks out for innovation best practice and business solutions that can be practically applied. Such projects demonstrate our ability to offer leading edge technology to our customers. They see a roadmap of the components and technologies we are planning and know that it is not just a single product development project where we can serve them but really in the long-term says Vasudevan. 3 K. Goffin and R. Mitchell

5 Ideas for new technology are also gathered bottom-up. It is our engineers and project managers who are immersed in the technical issues who often have the creative long-term ideas. The Council s job is to choose the best ones, based on our analysis of how the resulting technologies and components will, in turn, both increase the quality and speed of NPD for our customers says Vasudevan, and, for example, we have recently developed some key technology for wireless networking. Although the R&D services arm of Wipro Technologies initially focused on client-driven product engineering, it has come a long way. It has also become a leader in spotting technological opportunities, optimizing processes, managing effective NPD, optimizing processes, and driving project-to-project learning. It is a hotbed of NPD learning that is likely to provide a lot of managerial lessons for the future. Keith Goffin and Rick Mitchell. 1 Case based on interviews with Sachin Mulay and A. Vasudevan, Wipro Technologies, Bangalore August 2008; company documentation on the internet ( and the and Annual Reports. 4 K. Goffin and R. Mitchell