Management of an Outsourced Satellite Phone Development Assignment

Assignment Task

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Abstract

Although Indian IT industry is well known for its software services business capabilities, product development still eludes the sector. The case illustrates Sasken Technologies’, a communication services company in India, five-year journey to design, pre-build, test, integrate and certify a complex end-toend satellite phone for a global satellite communication service provider. Knowing very well the inherent risks and uncertainties associated with such technology-intensive project, the CEO of Sasken signed the contract with the client with immense belief in his team to execute the project successfully. The case highlights the challenges encountered by the project managers of Sasken in acquiring the technology know-how, integrating hardware and software components, managing globally distributed teams, meeting regulatory requirements and mitigating unforeseen risks inherent in such off-shore outsourcing projects. 

Case

It was a leap of faith on their part. For us too, because there is no history. – Rajiv C Mody, Chairman, Managing Director and CEO, Sasken Communication Technologies. 

For the first time, they were combining their software capability in Bengaluru with their hardware teams in Finland and designing a complete product for us. – Senior Director of one of the world’s largest satellite communication service providers and Sasken’s Client.

Preamble

One of the world’s largest satellite communication service providers (hereafter referred to as the ‘Client’) wanted to build its own satellite handset at half the prevailing cost of $1,000 for such phones. With nine satellites in orbit, the satellite service provider wanted to capture the market for voice calls by developing a low-cost satellite phone that replicated the features of a normal mobile handset at an attractive price to customers. After considering various options, including building its own phone, the firm dialled Bengaluru (India)-based Sasken Communication Technologies Ltd. (hereafter referred to as ‘Sasken’)

In November 2008, Rajiv Mody, Chairman, Managing Director and CEO of Sasken (), a midsize Engineering Research & Development (ER&D) firm based in Bengaluru took the call and signed a contract with the Client to build the satellite handset.

This was one of the first attempts by an Indian Information Technology (IT) company to design, pre-build, test, integrate and certify a complex end-to-end satellite phone for a foreign client. The project required expertise in hardware design and development, antenna design, software design and development, integration and testing. Although IT firms in India created a mark for themselves in outsourced IT services projects, outsourced product development was still very rare.

The satellite phone had to be handy, meeting the stringent certification requirements including radio frequency interference testing and mechanical testing. Some of the physical tests include intrusion of solid objects, dust and water on the phone. The phone contained silicon chips, multiple processors, software device drivers, protocol stacks and user interfaces. This required an optimal combination of hardware and software expertise.

Hence, this project was very risky for both the client as well as Sasken. Should the Client trust an off-shore vendor for such a technology-intensive project to design and build the phone on time to take it to the market?

Should Rajiv Mody sign the dotted line, committing his firm’s resources on such an ambitious risky project?

Case Questions

1. What are the factors that CEOs should take into consideration when deciding on whether to take up a technically intensive and risky project?

2. How should outsourcing vendors manage the product life cycle while building products for distant markets?

3. What are the methods to do scope management when dealing with ambiguous requirements?

4. How was the global vendor management done in this project?

5. How can unforeseen risks be mitigated in projects?

6. How and why is communication management important in distributed projects? How can communication gaps be overcome?

7. What are the different Human Resource Management practices the project managers can use to retain highly skilled engineers in projects and in turn within firms?

8. Why knowledge management practices are important in technology-intensive projects? Suggest few knowledge management practices for such projects.

9. Discuss conditions under which a software outsourcing vendor prefers a fixed price (FP) contract versus a time & material (T&M) contract? Was the decision of Sasken to sign the FP contract for this project correct?

10. Are reputation and brand important for outsourcing vendors who are involved in Business-to-Business services? And if so, how can they promote the firm’s reputation?

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