Feed R & D - or Farm It Out - Essay Example

Feed R & D-or Farm it out (A Case Study) Roll No: Teacher: 4th November 2008 Table of Contents Table of Contents 2 Feed R & D-or Farm it out (A Case Study) 3 Introduction 3 Situation Faced by Lars 4 Key Issues and Tradeoffs 5 Recommendations 6 Conclusion 7 Works Cited 8 Feed R & D-or Farm it out (A Case Study) Introduction RLK Media enjoyed a good reputation with its R & K technology because of the innovations in the product development previously. Currently, the company is not a good state. Lars, the CEO of the company has to consider many options for the improvement of the company. He has been given many options to think over the improvement of the status of the company. The chief scientist and the founder of the company, Ray is active in doing his innovatory job, as he has come up with the prototype of directional sounds and iVid. The chairman of the company, Keith Herrington is really disappointed with the company’s reputation and position and is interested in outsourcing R & K technology. Ray is quite not ready to outsource the R & K technology and thinks that the company is going to collapse after outsourcing the R & K (Nohria 2005). The company RLK Media has another option of procuring the software engineering skills from a skilled and expert company. Ray gives opinion of appointing the best persons from the market for his support in the innovation but the company is not in a position to endure higher expenses that are related to the option of Ray. Lars can procure the software engineering services from Inova, which is an Indian firm for the expansion of R & D. on the other hand, the technology of R & K can also be outsourced as the chairman of the company wants (Nohria 2005). Outsourcing is not a good option for the company, as there are chances of collapsing of the company. The procurement of software engineering services is a good solution for the company. Situation Faced by Lars Lars who is working in RLK Media as a CEO of the company was going through a hard process of decision making concerning feeding R & D or just farming it out, as is explained in the case study (Nohria 2005). The company RLK Media was famous because of its innovations but at this juncture, they are not getting positive response from the customer, as there are no new innovations by the company. Ray Kelner was the founder of RLK Media and was also the chief scientist of the company, as he was the major contributor in the innovations (Nohria 2005). Ray was experimenting with headset technology. Customers were attracted towards the products by RLK Media because of the innovations that they come up with their products (Nohria 2005). The chairman of RLK Media, Keith Herrington was very disappointed because of the company’s current situation and the unresponsiveness of customers for RLK Media’s products. According to his opinion, Lars was required to outsource R & K. on the other hand, Ray, the chief scientist of the company was interested to expand R & K. Keith Herrington informs that R & K is outsourced by all other companies in the similar business and RLK Media should do the same (Nohria 2005). However, Lars believes in Ray’s skill and expertise. Lars is in a very problematic situation, as he is unable to decide about how to go for R & K and what to do. He needs to decide whether the company is company is coming up with some innovation in the same headset technology or they should go for some other technology by outsourcing this one. After experimenting, Ray’s directional sound, Lars regards this technology as fully influential and also thinks that this technology can be used for destroying RLK Media if failed and can also be used for benefiting the company to a great extent (Nohria 2005). The option presented by Ray needs a number of new appointments in the company, as Ray requires skilled software engineers for making his technology of directional sounds into a technology that is going to be considered as marvelous and stupendous by the customers. Key Issues and Tradeoffs RLK Media has started its business with the innovation in R & K and they are devoted to its expansion and more innovations in the same technology. The company’s chief scientist is in the opinion of not outsourcing R & D and feeding R & D in place of farming it out, as the chairman of the company, Keith Herrington wants. According to Keith Herrington, the technology of R & K is obsolete and no company is willing to do further expenditure in the same field (Nohria 2005). Ray, the chief scientist of the company has contributed towards further innovation in the same technology with the name of directional sounds but he is in need of software engineers that are able to do the job skillfully (Nohria 2005). Ray wants to have the best software engineers from the industry but the company is not in a position to endure so many expenses that are associated with the availability of influential persons from the industry. Lars thinks that he can get experienced and able software engineers in low cost from India as well as he can opt for the other option of outsourcing R & K to Inova. Lars can also procure software engineering services form Inova in place of outsourcing them the R & D technology. After meeting with the staff and the head of Inova, Lars gets influenced because of their management and informed skills (Nohria 2005). With the engineers from India, there are much less expenses for the innovating technology of directional sounds and iVid. There are some concerns for the company RLK Media, which are: the company’s chairman is not interested in consuming money in expansion of R & D technology, he wants to outsource R & D in place of expanding it; there are much costs involved in iVid and directional sounds technology; company is not in a position to endure much expenses because of its current position; they can outsource R & D to the Indian Company, Inova, which is a fine option but again there are chances of failure; there are transaction costs and royalties attached with the Inova solution in case Lars procures software engineers from Inova; Inova has not done well with Pycosonics, another competitor of RLK Media and all these considerations are needed to be well thought over to take a step regarding outsourcing R & D or to let the company get a disreputable status (Nohria 2005). Recommendations As far as my opinion is concerned, I think that Lars should not outsource their R & D but he should procure some software engineers from Inova to facilitate Ray with his innovation. Outsourcing is going to be much dangerous, as the technology of RLK Media related to directional sounds and iVid is their own innovation, which they should not outsource. As far the chairman of the company is concerned, he can be persuaded towards the expansion of R & D by facilitating him with the prototype of iVid. The technology needs not to be outsourced. The company can feed R & D in place of farming it out. There are fewer expenses involved in procuring software skills and software engineers from Inova, so the company should go for this option in place of outsourcing R & K. there is no doubt that Inova is a good company, as it is successful in influencing Lars with its management and skills. However, only the procurement of software engineering skills will be enough for Ray to proceed with his innovation of directional sounds and iVid. Instead of getting disturbed, Lars should opt for not outsourcing R & K. there are always chances of fruitful experimentation and Ray is involved in doing the innovations regarding R & D technology. Conclusion RLK Media is not a good position currently; however, the company should invest a little towards feeding R & D, as Ray is quite active in his innovations. Innovation is a forte of RLK Media and it is because of innovation in products that the customers have liked them still. Only the lack of innovation has led them towards their current state. They can go for the option of procurement of software engineering skills for the solution of their problems concerning their market reputation. With the Inova solution, they will have to bear minimum costs along with innovatory skills. Lars should persuade the chairman Keith Herrington as a CEO of the company to expand the R & D technology in place of outsourcing it by logical reasoning and experimentation of the prototype of iVid developed by Ray. RLK Media is going to have more chances of prospering in the market on the base of its innovatory technology related to directional sounds and iVid. Works Cited Nohria, Nitin. Feed R & D--or Farm It Out? (HBR Case Study). Harvard Business Review. Harvard Business School Publishing, 2005: 1-5. Read More