Technology Absorption & Acquisition

Submitted by :Shruti Malhotra Krishna Kumar Yadav

Sourabh Malhotra Pooja Poply

Introduction

• Technology absorption :refers to the acquisition, development, assimilation, and utilization of technological knowledge and capability by a firm from an external source.

• The transaction occurs between transferring and receiving organizations.

Phases of technology Absorption

• ADOPTION:The process under which the various features of the technology which is the subject of transfer are suitably modified, changed or altered keeping in the view the needs of the buyer.

• The needs of the buyer of technology get crystallized and the supplier makes suitable modifications in the technology being supplied so that it conforms, as far as possible, to the requirements of the buyer

• ADAPTION:It is a phase that takes place after a technology has been adopted and put into use in production activities/facilities.

• During this stage, a number of alterations and modifications to suit the indigenousconditions are made and they may relate to the use of raw materials/components manufactured.

• It covers both product modifications as well as production technology changes, using indigenous skills as well as local materials.

• ABSORPTION:It involves ‘Know-why’ exercises, basic investigations into the product and or process and or systems.

• This will require unpack aging of a technology package.

• It requires R&D projects in know-why, optimization and improvement of product/process/systems and related equipments.

• OPTIMISATION:t is the effective savings in the use of material and energy consumption both in product and processes which constitute optimization of technology

Project stages of technology absorption

PROJECT FORMULATION:

• Prefeasibility report/project report• Technology negotiations• Approvals/clearances with Government• Foreign collaboration agencies• Funds from financial institutions• Land Acquisition• Clearances from State Govt. and other bodies

for power etc

PROJECT EXECUTION:

• Technology Transfer.• l Design/know-how, experts, training• l Use of Indian consultants• l Procurement of equipments, components

and materials.• l Payments for technology, RM, and

equipments.• l Project implementation.

TECHNOLOGY ADAPTION

• Trial runs• Debottlenecking /rectifications• Production based on selective imports of

components/RM• Indigenization of RM/ components,

equipments.• Adjust product/process technology to suit

local conditions.

TECHNOLOGY ABSORPTION:

• Analyze and unpackaged technology• Investigate product/process designs and

technology.• Optimize technology for higher quality and

performance.• Design; develop components/raw

materials/equipments.• Use research linkages.

TECHNOLOGY IMPROVEMENT AND UPGRADATION

• Improve product/process designs and technology for better performance/utilization.

• Use Research linkages.• Upgrade product/process to reach larger scales/capabilities.• Benefits of technology Absorption and up gradation• Repeated collaborations for the same product/process are

avoided.• Acquisition of further technologies becomes selective.• Ability is developed to unpackaged technology.

• Savings can be affected in foreign exchange.• l Effective utilization can be made to achieve desired results.• l Exports are increased.• l Know-why and technology up gradation capabilities are built

up.• Technically competent groups of scientists and engineers

trained in technology absorption get matured and strengthened.

• The base for technological self-reliance is enhanced.• Product and Process cost saving can be done.• Increase in sales and profits.

Case study on technology absorption

Future Thrust for Technology absorption

• Industry should attempt to obtain best available technology closest to international trends and provide R&D at the stage of project planning.

• Speedy indigenization of raw materials and components.

• Efforts for unpack aging of tailor-made equipments in the acquired technology

Technology Acquisition

• By Acquisition we mean :The purchase of one corporation by another, through either the purchase of its shares, or the purchase of its assets

• Technology Acquisition : Purchase of one corporation’s technology by another.

• Acquisition of technology and knowledge involves the purchase of external knowledge and technology

Process

Technology acquisition Process1. Needs assessment carefully review the actual situation and

consider the needs for technology introduction

2. Technology and solutions available :look for the solutions available on the market. Industry is proposing various alternatives which

must be considered and selected before starting the specification work.

• 3. Project definition• scope of the project has to be further studied

and defined.• 4. Technology specification:• necessary to draw up a detailed technical

specification which will adapt it to the identified needs and constraints.

• 5. Project organization ;a Project Management Team has to be

organized and establishedmission must be defined and objectives specified.

6. Purchasing processguidelines can be established in order to ensure

that the procurement process is transparent, fair and comprehensive.

• Acquistion Channels

BUY• Sponsoring university research• External R&D centers• Consultants• Licensing agreements• Vendors/ suppliers• Acquiring machinery or the firm

MAKE• R&DCOLLABORATE• Joint ventures• Sub-contracting

The reasons behind technology acquisition

• Limited resources• Time pressure• Complementary assets• Protecting image• Diversification• Supporting internal technologies• Avoid development risks

Case Study : Wipro acquires SAIC's global O&G IT services business

The IT giant has signed an agreement with Science Applications International Corporation (SAIC) for the acquisition of their global oil and gas information technology practice of the commercial business services business unit

• SAIC s global oil and gas information �technology practice provides consulting, system integration and outsourcing services to global oil majors with significant domain capabilities in the areas of digital oil field, petro-technical data management and petroleum application services addressing the upstream segment.

• Stronger appeal to clients in the energy industry, and separation from its Indian provider peers

• Wipro is already the largest offshore Tier 1 provider in the energy and utilities sector in revenue terms, and the acquisition will provide it with broader and deeper consulting, technology, and outsourcing capabilities in the upstream business, and enhanced service capabilities in areas including digital oilfields, exploration, and production data management.

• Will help Wipro gain capabilities in areas such as petro-technical data management and petroleum application services and digital oil fields.