Indian ER&D global capability centers as catalysts for the enterprise strategy
Blog: NASSCOM Official Blog
Evolving maturity of the Indian Global Capability Centers
The Indian ER&D ecosystem has been at the forefront of supporting ER&D functions for enterprises across the globe. India’s prowess in software domain, robust innovation ecosystem, rapidly expanding engineering and digital talent pool, and India’s ability to serve as both a market and a sourcing destination have enabled India to emerge as a global hub of innovation and R&D excellence.
One of the ecosystem’s main pillars has been the global capability centers which have evolved over the years to serve as key strategic partners to the parent enterprise. The growing maturity of this ecosystem has made it the top choice for investments to some of the world’s largest enterprises such as GE, Samsung, Intel, Cisco, Bosch and Daimler among others. Indian GCCs have staked their claim to be at the forefront of product and technological innovation, with several successful products designed and engineered in India to address global and local market needs.
The shift from engineering support to strategic product ownership
The story for Indian Global Capability Centers started over two decades ago as global enterprises started capitalizing on India’s scale in talent to support their product development activities. Initially the scope for these centers was limited to delivery of engineering support for their global headquarters. However, these centers have over the years now matured enough to drive end-to-end product development for the enterprise.
The Mercedes Benz Research and Development Center India (MBRDI) in India is the epitome of this journey. The center was set up in 1996 to support various business units with CAD, CAE and IT programming capabilities. However, with the increase in proliferation of software in the automotive industry, the center has played a decisive role in building the next-gen capabilities that are core to the software defined vehicle of tomorrow. The center is now undertaking cutting edge strategic initiatives which directly impact customer experience and drive the organization’s top-line revenue. As quoted by Dr. Thomas Weber, former member of Daimler board, there is a “huge part of India in every Mercedes”.
Autonomy in operations and ownership of strategy is delivering exponential business impact
The growing maturity of the GCCs is giving them the independence to drive their operations and define their own strategy to address the global strategy and agenda. This has enabled the GCCs to undertake challenging initiatives which have delivered a significant impact to the organization’s business and helped realize its strategic objectives.
Bosch’s India center is a textbook example defining this trend. The center was setup about 25 years ago and over the years it has become the company’s second largest ER&D center worldwide with a headcount of over 20000 resources. The center is a key strategic pillar for Bosch and operates independently with direct reporting to the Bosch board. The independence has allowed them to undertake initiatives such as setting up a new team to focus on the artificial intelligence and machine learning technologies. These teams have been instrumental in development of multiple solutions such as the IoT based Pollution Monitoring System for urban neighborhoods and the Digital Pathology Solution which accelerates diagnosis through machine learning. As AI and IoT become more integral to the products, the center is expected to play critical role in the organization’s future.
Building centers of excellence for enhancing new age tech expertise
Apart from product ownership, global organizations are also looking at India to drive the technology strategy for the enterprise. One approach for accomplishing it has been through the global centers of excellence which play a crucial role in identifying the applications for new technologies and accelerating its mass market adoption. The global communications giant, Nokia has recently joined the list of companies with a center of excellence for advanced technologies in India. Nokia’s India R&D center has opened up center of excellence for networked robotics in partnership with Indian Institute of Sciences. The COE leverages next-gen communication technologies, robotics and artificial intelligence to develop use cases in the fields of disaster management, agriculture and industrial automation. The center is expected to play a key role in identifying technological solutions which will enrich and improve lives globally.
Developing next-gen capabilities for the enterprise through innovation hubs
India’s strong competencies in software development has made the Indian MNC ER&D centers as the key hubs for development of software solutions which enable the operation and management of physical products. With the advent of digital technologies, the Indian MNC ER&D centers are expanding their capabilities to include them in their scope. Their strength in software competencies makes them the leading choice to own the mantle for building and scaling these next-gen solutions.
The German medical devices company, Siemens Healthineers exemplifies this phenomenon. Its India R&D center currently hosts about 50% of the company’s software development engineers and plays a strategic role in development of software solutions for imaging, diagnostics and advanced therapies. The organization has recently announced plans to invest €160 million over the next five years in an innovation hub in Bengaluru, India. The innovation hub will include centers of competence in digital technologies, such as data analytics, artificial intelligence, immersive technologies like augmented and virtual reality, user experience, and cybersecurity. It will be one of the four hubs for the company with others hosted in US, Germany and China and is expected to play a key role in defining the organization strategy for these technologies.
Driving competitive advantage through ecosystem partnerships
ER&D centers in India are also driving the enterprise technology capability enhancement through partnerships with both academia and startups. Intel’s India center, the company’s second largest R&D center in the world has recently set up a research center in collaboration with IIIT- Hyderabad for artificial intelligence. The center will focus on challenges in healthcare and smart mobility. The center also runs Maker Lab, a startup accelerator program which has helped the organization to engage with over 50+ startups which have launched 22 products in the market and filed 65 patents.
Recognizing the strategic contribution of Indian GCCs
As digital becomes the core component of the enterprise strategy, the rapidly maturing Indian ER&D ecosystem has emerged as a key enabler in helping them drive the transformation and realize their long-term strategic goals. NASSCOM Engineering and Innovation Excellence Awards seeks to recognize the contributions of the Indian Global Capability Centers which have delivered significant business impact to the enterprises worldwide.