Siemens Development Strategy

881 Words Dec 5th, 2013 4 Pages
Siemens AG: Global Development Strategy
• What were the major causes of the problems with the NetManager project? (I’m not looking for a list of points made in the case; I’m looking for you to step back to a higher level and analyze why these problems occurred.)

The problems experienced by the NetManager project appear to be symptoms of integration vs. responsiveness issue within Siemens AG. As a transnational company, Siemens faces strong pressure to globally integrate its operations, and be responsive to the needs of their offices and customer’s needs. The main problem with NetManager was that it had mushroomed in size and strategic importance. This was the result of keeping up with the rapidly changing technological demands, and
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The case also traces back their erroneous assumptions to a lack of communication between German managers and Indian developers due to extended vacations with no alternative outlet for which to seek necessary support.

Munich headquarters had been too removed from the realities and operations of the Bangalore office, and failed to provide the adequate support needed to build NetManager. This translates to an issue of global integration.

• What should Siemens do next regarding the Net Manager project?

Having outlined a lack of support from Munich headquarters as a reason for NetManager’s shortcomings, Siemens should keep project development in Bangalore. Rather than shifting development to Europe, which would result in tremendous transaction costs, Siemens should shift the necessary resources for completion to Bangalore. First, they should send the necessary executive knowledge, meaning German executives with the in-depth knowledge of EWSD systems. This would overcome interdependency issues, and guarantee greater quality at each step of the development process. Next, they should make the proper investments in infrastructure and systems hardware. The Bangalore RDC should be as up to date as possible, so as to avoid the prior testbed problem, and so that their office may be as equipped as possible to adapt to changing technological trends. In the short-term, this results in a completed NetManager program that meets the needs and standards of their largest