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                                                                                                     OM02

                                                                                 Technology Management

(For CNM Cases)

                                                                                             Assignment II

  Assignment Code: 2016OM02A2                                                           Last Date of Submission: 30^th April 2016

                                                                                                                   Maximum Marks: 100

Attempt all the questions. All the questions are compulsory and carry equal marks.

                                                                                                  Section-A

1              What in your assessment are the prevailing conditions of Intellectual Property Protection (IPP) in developing countries?

2              (i)            What are the direct and indirect costs of acquiring a technology?

                (ii)           What are the different modes of payment for technology?

3              Enlist the advantages and disadvantages of technology transfer from advanced /             industrialized     economy.

4              Write short notes on:

                (i)            Channels of Technology acquisition

                (ii)           Competitive position analysis

                (iii)          The system concept of Technology

                (iv)         Technology strategy and Management

                                                                                                  Section-B

 

Case Study: Leading Players

The frontline software companies in India like Wipro, Satyam and TCS had successfully employed the global delivery model – executing projects of different sizes and scale for Fortune 500 companies. This model not only helped them add value to their customers by significantly reducing their costs, but also helped them boost their own revenues.  The revenues of TCS, India’s largest IT Company, reached $1.6 bn in the fiscal year 2003-04, while Wipro’s revenues were $1.35 bn.  Its net income was $220 mn.  Similarly, the revenues of Infosys were $1.06 bn, while its net income was $270 mn.

With increasing competition in low-end niche operations from smaller players in the industry, the leading companies were forced to re-think their strategies to expand their business.  They further diversified the portfolio of services, where size and scale advantages could be used as differentiating factors.  This made most of them add new revenue streams into their business, the most recent inclusion being BPO.  The companies started focusing increasingly on the ways and means to partner with their customers and build stronger relationships with them.  This not only helped them in understanding their clients’ requirements better, but also doubled as a customer retention strategy.

Infosys

Infosys is one of the most successful companies in the Indian IT software and services industry.  This can be gauged from the fact that during 1999 and 2004, the company registered an eight-fold increase in its revenues from $121 mn to $1.06 bn.  Among the IT majors, Infosys was known for its relentless customer focus and extending its relationship with them to a new level by entering into specific partnership agreements.  Its relationship with its clients went so well that it came to be called co-sourcing rather than offshore software outsourcing.  For instance, in June 2001, the company entered into an agreement with Burlington Northen and Santa Fe Railway Company (BNSF), the second-largest rail network in North American, to enhance operations and number of customers.  According to the agreement, Infosys adapted a co-sourcing model, where the employees of Infosys and BNSF jointly participated in the design, deployment and management of some of BNSF’s IT systems.  By this, rather than sourcing software at an Infosys’ center in India and then integrating it with its own system, BNSF could directly deploy the requisite systems at its workplace.  This further reduced costs.  On the benefits accruing from collaborating with Infosys, Jeffrey J.Campbell, Vice-President of Technology Services and CIO, BNSF said, “Collaborative relationship with Infosys has enabled us to reduce application development costs, as well as to benefit from Infosys’ quality assurance and project management processes.”   This partnership was recognized as an example of a successful offshore service delivery model.  In November 2002, Aberdeen Group, a market analysis and positioning services firm, included a case study on the Infosys-BNSF partnership, in its report titled `Software Outsourcing – Best Practices’.  In the report, Stephen Lane, IT Services Research Director, Aberdeen, wrote, “Having evaluated the case studies for such offshore outsourcing best practices as collaboration, onsite/offshore team integration, knowledge transfer and relationship continuity, Aberdeen named Infosys as a company that exemplifies these practices through its dedicated sourcing relationship with BNSF.”  Over the years, Infosys developed similar relationships with several of its other clients, both big and small.

TCS

While Infosys stressed partnering with clients and serving them better, TCS extended customer relationship to the next level – developing relationships with the customer’s customers.  For instance, hardware vendor Compaq (prior to the HP-Compaq merger) was one of the major customers of TCS.  Two of its products- Compaq NonStopTM and Himalaya TM systems arena were developed by TCS.  For Compaq, TCS developed the products in exclusive set-ups, comprising 110 engineers and consisting of the latest product -–NonStop Himalaya server.  This apart, TCS also provided maintenance support to the users of the NonStop Himalaya customers, across the world.  These customers in turn used these servers to delivery applications to their customers.  For instance, Ameritech, a US-based telecommunications company provided telephone, paging and Internet services to its customers in the Eastern US.  Most of the technical work in providing these services was conducted on the NonStop Himalaya servers, which provided round the clock customer support.  TCS also assisted Ameritech in developing an order entry system for its telephone services.  The company maintained similar relationships with other customers of Compaq servers such as AXS Sunlife, the Bombay Stock Exchange, Belgacompact Solutions, Proton World International and more.  By providing support to the customers of Compaq, TCS demonstrated its commitment towards developing better relationship with its customers.

Apart from IT software products & services, there are other related industry segments, which witnessed tremendous growth in recent times.  These segments include engineering design services and embedded systems.

Case Question:

Compare and contrast the diversification and service collaboration strategy for TCS and Infosys.