Global Software Engineering Siemens: Focus India - Germany Gerd Höfner Managing Director and CEO Siemens Technology and Services Pvt. Ltd. Head Corporate Development Center Presentation at the GlobePro Arbeitskreis Frankfurt, December 18, 2012
Contents 1 Introduction Siemens in India 2 Challenges of global software engineering 3 and how to overcome them 4 Summary & Results Page 2
Siemens is organized in 4 Sectors: Industry, Energy, Healthcare, and Infrastructure & Cities Siemens: Facts and Figures Siemens Sectors Key figures FY12 Industry Divisions: Industry Automation Drive Technologies Customer Services Energy Divisions: Fossil Power Generation Wind Power Solar & Hydro Oil & Gas Energy Service Power Transmission Healthcare Divisions: Imaging & Therapy Systems Clinical Products Diagnostics Customer Solutions Infrastructure & Cities Divisions: Rail Systems Mobility and Logistics Low and Medium Voltage Smart Grid Building Technologies Revenue: ~ 78 bn. Locations: In 190 countries Employees: ~370,000 R&D expenses:~ 4.2 bn. R&D engineers: ~29,500 Inventions: ~8,900 ~ 18.9 bn. ~ 27.3 bn. ~ 13.6 bn. ~ 16.7 bn. Active patents: ~57,300 Corporate functions Corp. Finance Corp. Technology Corp. Development Corporate Technology Page 3
Corporate Technology contributes to making Siemens more competitive CT departments: Overview Corporate Technology (CT) CTO: K. Helmrich Technology and Innovation Management (TIM) Corporate Standards and Guidance (CSG) Research and Technology Center (RTC) Technology and Innovation Projects (TIP) Develops the technology and innovation strategy and portfolio Develops cooperations with external partners Develops and ensures critical Siemens R&Drelated standards from PLM to Lean and IT Security Delivers cutting edge research services to the Sectors and innovations for Siemens Drives major innovation projects forward for Siemens Production and Process Consulting (PPC) Innovative Ventures (IV) Development Center (DC) Intellectual Property (IP) Offers consulting services to optimize R&D, engineering and production processes Builds the bridge from technology to business (e.g., via technology commercialization) Provides high quality product development services from a nearshore and offshore base Delivers excellent IP services and drives the Siemens IP strategy Page 4
The DC advantage: Proven high-quality development services at the best cost position DC at a glance, year end FY12 Global footprint for optimized offshore and nearshore services at the best cost position ~40 Americas Headquarters Country setups ~1,000 Europe ~3,500 India China Over 4,600 FTEs: ~20 percent of all Siemens' software-related development ~100 Portfolio, synergies, and process focus Portfolio spanning a range of software, product engineering, and technology services Preferred partner for 14 Divisions and 27 BUs across all Sectors to leverage synergies Process focus ensures sustained high quality: CMMI Level 3, PCMM Level 3, ISO9001, ISO13485, ISO27001 Proven capability for innovative products TIA Portal Enabling Industry innovations with expertise in: Industrial control systems SIMATIC programming Industrial network management systems Smart Grids Enabling Energy innovations with expertise in: Power control systems Power system apps Smart metering solutions Biograph mmr Enabling Healthcare innovations with expertise in: Medical imaging platforms Modality applications specifically PET and MR Page 5
Contents 1 Introduction 2 Challenges of global software engineering 3 and how to overcome them 4 Summary & Results Page 6
Challenges exist in different stages Get it started Near-shoring or off-shoring? Which location? What kind of work? Which teams? What volume? How to overcome the distance effects? Time distance Global Software Engineering Physical distance Cultural distance Page 7
Challenges exist in different stages Ensure sustainability How to attract people? How to retain the employees? How to move up the value chain? Page 8
Contents 1 Introduction 2 Challenges of global software engineering 3 and how to overcome them 4 Summary & Results Page 9
A structured approach to get it started ensure a sustainable organization = S U C C E S S! Page 10
TAPER Five steps to successfully establish a GIC Trust Assess Prove Enhance Reengineer Establish relationship on trust Senior management visits Establish long term cooperation with roadmap and ramp up plan Identify talking partners Time Roadmap Page 11
TAPER Trust Perceptions in Germany at the beginning Do you still use elephants to go to work? A German engineer is twice as productive as an Indian engineer. In addition for 2 Indians you need a third one to control the 2 So where is the cost advantage? Page 12
TAPER Trust Establish a relationship on trust Seeing is believing Visits are important Visits from senior management right from the beginning, e.g. the CEO of the division and the business unit we intended to cooperate with, the VP R&D and several other colleagues visited India from 2003 onwards. Let the people know what is going on Communication is essential Active communication with employees at the partner as well as with the labors council (Betriebsrat). Senior management commitment is required Continuous involvement of and communication with senior management. Page 13
Overview on TAPER s five steps Trust Establish relationship on trust Senior management visits Establish long term cooperation with roadmap and ramp up plan Identify talking partners Assess Technical: Identify applications based on skills available (if skills not there perform prepilot) Process: As-Is development process Commercial: Risks vs. cost benefits Prove Liaison team onsite and customer representative offshore Team building Training: * Intercultural * Domain * Process Skill database maintained Enhance Increase scope and complexity of offshore activities Process improvement Establish domain competence Reengineer Complete ownership for selected topics Process optimization Establish center of competence Time Roadmap Page 14 Initial project Operational efficiency Process effectiveness Agility to respond to business
a structured approach to get it started ensure a sustainable organization = S U C C E S S! Page 15
Challenges for GICs in India - Attracting talent What attracts people to a job The Emerging Economies Brazil China India Career advancement 1 1 1 Competitive salary 2 * * Challenging work 3 * 3 The Mature Economies Germany U.K. U.S. Competitive salary * 1 1 Convenient work location 2 2 * Sufficient vacation * 3 2 Learning and development opportunities * 2 2 Challenging work 1 * * Flexible schedule 3 * * Competitive benefits * 3 * Competitive health care * * 3 Source: TowersWatson Survey on Global Talent Management and Rewards. 2010. * Not ranked in the top 3 For employees in India, it is important that a company offers A clear career path Opportunities for learning and development Challenging work Page 16
Challenges for GICs in India - Retaining talent Why employees leave Salary below the industry average 62% Missing career perspective 59% Work culture and content 56% No adequate training 52% No sufficient medical insurance for family members 50% Over-/under challenged 27% Issues with colleagues 25% Low job security 22% 0 10 20 30 40 50 60 70 Source: AsienKurier June 2010 For a GIC in India, it is important to also offer Salaries in line with the industry average A professional work culture and environment Note: The impact of attrition is higher for GICs than it is for companies providing professional services. Page 17
Finally it s all about people Our philosophy = 4C The most valuable assets in an IT company are its people! At the Corporate Development Center India, we believe that people are our core assets. We work towards adopting best practices that provide an environment that encourages and motivates our employees to excel. Motivated employees = Satisfied partners To offer an environment that motivates, we provide a fair and rewarding work environment and culture, opportunities for learning and growth (career) exposure to technology and challenging assignments (content) and competitive salaries (compensation) = 4C Page 18
4C Culture Excellence Awards Night Compensation Culture Content Career CT DC IN Excellence Awards Night on February 23, 2012 Page 19
4C Career Learning & Development 3D training program (behavior, domain, technology) Behavior Culture Leadership Communication Presentation Compensation Culture Content Career Technology = Software Engineering Basic (FOCUS*) and advanced Architecture Project Management Requirements Engineering Quality Domain Basic Advanced To be defined jointly with BUs *FOCUS Foundation Curriculum for Software Engineers Page 20
4 C Content More of our work is at high maturity Compensation Culture Content Career Value 1 Siemens Industry 33% 53% Engineering Support Support global team 2 Module Leadership Design and develop modules 3 58% 19% Engineering Leadership Design and develop complete products and components 4 Product Leadership Responsible for business aspects Source: Zinnov Page 21 Maturity level
Contents 1 Introduction 2 Challenges of global software engineering 3 and how to overcome them 4 Summary & Results Page 22
Summary A structured approach like TAPER combined with our 4C approach for people management ensure successful global software engineering! Page 23
Results We managed a growth of 30% growth year on year Our retention rate of 94% is among best-in-class In terms of work content, we operate at a higher maturity level than the industry average Our approach has been recognized within Siemens as well as by the international community Our partners are very satisfied Page 24
It s all about people We deliver what we promise! Page 25