Executive Summary (This is a document excerpt)

Despite the well-established trend to offshore work to India, most high-tech product companies' India development centers (IDCs) or captive facilities neither live up to global product development hype nor deliver proven offshore benefits. Most technology product firms still see India only as a limitless source of bulk staffing. They don't consider India a location for turning ideas into offerings or for financing or buying new complementary technologies from the many emerging specialists. Development centers that Western firms run for themselves mostly fail to deliver the value that they should. To do better, high-tech firms must reinvigorate their own centers through improved cost-competitiveness and stronger focus on process initiatives. They must use dedicated teams to internally market India's emerging innovation role rather than the former labor arbitrage model. In supplier relationships, they also need to move beyond the staff augmentation mindset and redefine goals not only toward productivity advantage for repetitive tasks and capability to ramp up new technology, but also to innovate product functionality based on providers' growing domain competency.

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