The Hindu Business Line : R&D is the code

Satish Joshi is Executive Vice-President and Chief Technology Officer (CTO) at Patni Computer Systems and has been with the company for 22 years. His responsibilities include supervision of four business units —telecommunications, manufacturing, BPO and enterprise application solutions. In a chat with eWorld, Joshi speaks of various R&D-related activities at Patni. Excerpts:

Could you take us through R&D initiatives at Patni?

There are several categories of R&D that happen within Patni. The first kind of R&D is directly funded by the end-customer, who, in most cases, is a hi-tech product maker. So we work on the next-generation products developed by such customers as an extension of their R&D.

The second set of people we work with are companies who produce technologies for a much larger framework. For example, we work with companies who manufacture electronics that go into a plant automation system.

Third, we utilise the Intellectual Property (IP) produced internally. This IP is mainly to do with encoding and decoding kind of technologies. With more and more entertainment content going online, encoding, decoding and protecting digital rights have become very crucial. We are currently doing a project that enables efficient transmission of video information over a low bandwidth Internet connection, thereby enabling a doctor to do remote diagnosis.

How to compress images and yet retain enough fidelity for the doctor to study critical information is the challenge. A chain of hospitals in India is in the process of rolling out this technology. While we do invest upfront to create new technologies for a particular industry, it is the customer who pays for it at the end.

Then we have internal R&D, which focuses on creating processes, methodologies and tools that improve operational efficiency. The internal R&D team is constantly on the lookout for new technology trends and continuously keeps evaluating options of building service offerings around them.

Another aspect of internal R&D is creating futuristic solutions. Here, the R&D team creates prototypes and skeletons of new products and demonstrates them to a few customers to check the response. However, the maximum portion of internal R&D goes into enhancing Patni’s productivity and building new service offerings.

How important is it to make IT systems more usable? Do you consciously attempt to include it in your R&D framework?

Every creative discipline, except software writing, focuses heavily on designing a user-friendly interface. For example, automobile designers try to get the right display to ensure maximum comfort for a driver. Even a company that makes washing machines employs usability engineers to lay out the most comfortable display for customers. Companies design software that is expected to be efficient, meet all functionalities and yet have minimal computing requirements. However, Indian IT companies have traditionally not concentrated on the usability aspect of software. Principles and design guidelines for enhancing usability of software constitute an important aspect of internal R&D.

What direct impact does internal R&D have on your costs and other overheads?

It is very difficult to measure savings generated through internal R&D. For example, a new software testing methodology will either save 30 per cent of the testing time in a project or help in creating a better software by finding loopholes (in the software) in the testing stage itself.

When better software is created as a result of the new methodology, it becomes impossible for us to quantify the benefit. This is because savings for the vendor are not evident and so the pricing strategy continues to remain the same. Then, the number of repeat orders that only a satisfied customer can give becomes the benchmark.

What is your annual spend on R&D? Are you satisfied with the quantum of spend?

As of December 2006, the spend on internal R&D was around 1.5 per cent of revenues. Earnings from customer-funded R&D is 15-16 per cent of Patni`s revenues. R&D spend witnessed in a services company is traditionally lower than what is seen in a products company.

Some of our clients (who manufacture products), whom we partner for customer-funded R&D, spend a high proportion of total revenues on R&D. What they do in R&D is developing a product that will be sold in future. In a services company, however, benchmarks are different.

As CTO of Patni, which vertical calls for maximum attention? Also, how much of your IP gets patented?

Purely from an R&D perspective, it is the manufacturing vertical that calls for maximum attention. Within manufacturing itself, the bulk of R&D is concentrated on the hi-tech electronics manufacturing side.

Talking of patents, most of our IP does not get patented, as we are not into making products. What we make is a tool that gets integrated into the bigger system that we make for our customers. We cannot patent this bigger system as it belongs to our customers.

In most cases, we have copyright over the components that we have integrated for our customers. We give customers the right to use them but not to modify, change or sell. Moreover, we retain the right to re-use the copyrighted component somewhere else.

adith@thehindu.co.in

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