Innovation & Globalization:Yin and Yang

Symphony Services Breakout SessionMay 9, 11:00 a.m.

Room 210

Innovation & Globalization:Yin and Yang

• How do you push apenny through a smallhole?

• Demonstration showsthe first thing youneed for innovation isan open mind.

Today’s DiscussionModeratorJerry Smith

– Chief Technology Officer, Symphony Services

PanelistsRobert Gersten

– Chief Development Officer, Oracle / HyperionGordon Brooks

– President and CEO, Symphony ServicesEd Spire

– Senior Director, Technology and Architecture,Office of the CTO, Attachmate / NetIQ

Uresh Vahalia– VP Engineering, Network Attached Storage, EMC Corporation

R&D Goes Global• Number of

companies withR&D functionsoutside HQcountryis increasing– Today—65%– Predicted in

threeyears—84%

0 5 10 15 20 25 30

Other

Switzerland

South Korea

Finland

Ireland

Japan

Germany

Canada

China

United States

India

Best overall overseas locations for R&D?

Source: The Economist Intelligence Unit 2007

Globalizing R&D is NotOutsourcing Innovation

0

20

40

60

80

Source: Duke University / Booz Allen Hamilton Offshoring Research Network 2006 Survey

Procurement Product Development

Finance/Accounting

Marketing & Sales

IT Call Centers/Help Desk

EngineeringServices

R&D

Offshoring Growth Rates Increasing in Innovation-centered Functions

% G

row

th B

ased

on

New

Impl

emen

tatio

ns in

200

6

56%

50% 50% 48%43% 43%

40% 38%

It’s About Expanding Global TalentNetworks so Innovation Can Continue

0

20

40

60

80

100

Source: Duke University / Booz Allen Hamilton Offshoring Research Network 2006 Survey

Product DesignEngineering,

R&D

Administrative Back Office(BPO)

IT Call Centers Procurement

“Access to Qualified Personnel” as a Driver of Offshoring is MostSignificant for Innovation-centered Functions

% o

f Res

pons

es “

impo

rtan

t or v

ery

Impo

rtan

t

74%71% 67% 66%

45%

Open InnovationIs Picking Up Steam

• Outsourcing anincreasinglycommoncollaborationmethod

• Number ofcompaniesoutsourcing R&D– Today—64%– Predicted in three

years—75%0 20 40 60

Which external partners collaborate withyou in R&D processes?Universities and educational establishments

Customers

Suppliers

Alliance partners

Joint venture partners

Competitors (e.g. in the production standards)

Other

Third party vendors via outsourcing arrangement

Source: The Economist Intelligence Unit 2007

\in•no•va•tion\The successfulimplementation of aninvention or idea thatadds sustained valuethat can be measuredin the form of newrevenue and moreprofit culminating inincreased valuations.

Global Innovation Models• Innovation

Networks• Open

Innovation• Vitality Index• Innovation ROI

\in•no•va•tion\Inventions that are

implemented to realizemeasurable value.

Culture of InnovationRecognizing and managing cultural

characteristics so they don’tinterfere with outcomes. Bringingclarity on aspects that should be

embraced, rewarded andestablishing norms.

CommonInnovation ProcessesThe systematic eliminationof obstacles to enable fullexploitation of innovationto achieve business results withdistinct measures and metrics.

Global Innovation Success FactorsCollaboration and ContextGetting teams to a seamlesslevel of operation so you canco-create whenever,where ever.

Challenges

Culture ofInnovation

CommonInnovationProcesses

Collaborationand Context

Q: Robert GerstenHow did you tackle the biggest

challenges to seamlesscollaboration? How are you

addressing your ability to innovatewith partners now and in the future?

Secrets of Success

Multi-shore teams are a strategic imperative for us. We took action 4 years agowith a philosophy of mutual respect, goal-alignment and working with partners ina way that extends our culture. A high percentage of the create work on ourflagship product is done at Symphony. We've had turnover but we also have acore group of people who have been with us since the start four years ago. Thishas given us a foundation from which to approach global innovation.

Market driven development is about getting close to customers. The maturation ofthe software industry and of global innovation processes is making innovationcritical now. A subset of our team at Symphony includes a small Innovation Teamthat has a pure focus on generating new ideas. They are helping to provide thedynamic technical environment necessary for sustaining our ability to innovate.

Robert Gersten, Chief Development Officer, Oracle / Hyperionexcerpt from session at Software 2007

Challenges

Culture ofInnovation

CommonInnovationProcesses

Collaborationand Context

Q: Gordon BrooksWhat challenges have you faced

evolving the culture of your firmto become a source of innovation

for clients? Are there best practicesother organizations could learn from?

Secrets of Success

Our clients are not outsourcing innovation, they’re globalizing R&D and expect to getinnovation along with increased productivity and speed to market. My company’s successdepends on the ability to deliver higher and higher levels of value. Innovation is top ofmind now due to customer demands and the maturation of the software industry alongwith global innovation processes. Ideas are like film on the cutting room floor for a movie.3M knew what to do with their mainline products and with some of the stuff on the cuttingroom floor—we got sticky notes. The message is innovation has to be managed and thewrong culture can kill it.

So we’ve been building a culture of innovation and implementing a management systemto recognize and eliminate whatever interferes with desired innovation outcomes andbusiness results—behaviors, norms, metrics and rewards. We’ve trained InnovationMentors and installed; dashboards, portals, reward systems, and tighter implementationprocesses. Now we are taking it to clients in the form of Innovation Teams, InnovationLabs, and Joint Innovation Councils. All this structure is a means to manage the ROI forinnovation—both our investment and the investment our clients make in us—but it’s alsoa way to open minds so that innovation can happen.

Gordon Brooks, President and CEO, Symphony Servicesexcerpt from session at Software 2007

Challenges

Culture ofInnovation

CommonInnovationProcesses

Collaborationand Context

Q: Ed SpireHow have you approached globaldevelopment with partners given your explicit goal of innovating?

What has your experience been likeand what advice can you share?

Secrets of Success

Innovation is important now because of the imperative for growth—to solve newproblems or extend today's solution. To us, innovation is the result of recognizingopportunity and bringing together the right people—wherever they are—to get it done.

But you have to approach global R&D right. There are no 2nd class citizens. Ourmulti-national architectural group meets weekly and is focused on making a betterproduct. The team we have in Bangalore with Symphony is not extra help. They are avital part of our overall team. We've turned over almost everything about our mostimportant products. We are leveraging engineering talent and treating them as equalsin full cooperation and collaboration. We have been very pleased.

Ed Spire, Sr. Director, Technology and Architecture, Attachmate / NetIQexcerpt from session at Software 2007

Challenges

Culture ofInnovation

CommonInnovationProcesses

Collaborationand Context

Q: Uresh VahaliaWhat are the biggest challenges

to achieving innovation from globalR&D efforts? What innovation

process frameworks are you using,especially in the context of bringing

partners into the process?

Secrets of Success

The foundation for global innovation is the right environment. It's very important tostart out on the right foot. If you are heavily cost motivated or view the offshoreteam as a way to get things done that the U.S team does not want to do, you willfail. Take time up front to set things up right. Make sure the team understands thestrategic and competitive situation of your business and your products.

Our team with our partner is hungry for innovation and the work we are doingtogether has a lot of innovation in it. You need clear outlets for sharing ideas, aconsistent process for making go/no go decisions, and a focus on execution. Theworst thing for an innovator is to spend a year on a cool idea but not be able tobring it to the product.

Uresh Vahalia, VP Engineering, Network Attached Storage, EMCexcerpt from session at Software 2007

Put Your Challenge To the Panel

Successful Global Innovation

• How do you pushinnovations throughtoday’s extended R&Dand engineeringorganizations?