Technology Absorption and Acquisitionfinal

8/12/2019 Technology Absorption and Acquisitionfinal

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Submitted by : NISHA007RAJ RAJESHWAR014

SHASHANK- 018

ABHISHEK RANJAN - 022

CHANDRA ABHISHEK GUPTA-038


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Introduction

Technology absorption :refers to the

acquisition, development, assimilation, and

utilizationof technological knowledge and

capability by a firm from an external source.

The transaction occurs between transferring

and receiving organizations.


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Phases of technology Absorption


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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 beingsupplied so that it conforms, as far as possible,

to the requirements of the buyer


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ADAPTION:It is a phase that takes place after

a technology has been adopted and put intouse in production activities/facilities.

During this stage, a number of alterations and

modifications to suit the indigenousconditionsare 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.


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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.


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OPTIMISATION:t is the effective savings in the

use of material and energy consumption both

in product and processes which constitute

optimization of technology


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Project stages of technology

absorption


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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


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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, andequipments.

l Project implementation.


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TECHNOLOGY ADAPTION

Trial runs

Debottlenecking /rectifications

Production based on selective imports ofcomponents/RM

Indigenization of RM/ components,

equipments. Adjust product/process technology to suit

local conditions.


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TECHNOLOGY ABSORPTION:

Analyze and unpackaged technology

Investigate product/process designs and

technology.

Optimize technology for higher quality and

performance.

Design; develop components/rawmaterials/equipments.

Use research linkages.


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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.


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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 engineerstrained 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.


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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


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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

corporations technology by another.

Acquisition of technology and knowledge

involves the purchase of external knowledge

and technology


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Process


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Technology acquisition Process

1. Needs assessmentcarefully review the actual situation and

consider the needs for technology

introduction2. Technology and solutions available :

look for the solutions available on the market.

Industry is proposing various alternatives whichmust be considered and selected before

starting the specification work.


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3. Project definition

scope of the project has to be further studied

and defined.

4. Technology specification:

necessary to draw up a detailed technicalspecification which will adapt it to the

identified needs and constraints.


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5. Project organization ;

a Project Management Team has to be organized

and establishedmission must be defined and

objectives specified.

6. Purchasing process

guidelines can be established in order to ensure

that the procurement process is transparent,

fair and comprehensive.


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Acquistion Channels


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BUY

Sponsoring university research

External R&D centers

Consultants

Licensing agreements

Vendors/ suppliers

Acquiring machinery or the firm


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MAKE

R&D

COLLABORATE

Joint ventures

Sub-contracting


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The reasons behind technology

acquisition

Limited resources

Time pressure

Complementary assets Protecting image

Diversification

Supporting internal technologies Avoid development risks


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Technology Absorption

Focus is on putting the acquired technology to use; i.e. reaping the

benefits from technology acquired.

Leads to market competitive advantage.

Involves some costs for putting the technology to use and leads toincrease in revenues, improvement in efficiences etc

Succeeds technology acquisition

Technology Acquisition

Focus is on acquiring technology i.e. becoming owner.

Leads to firm specific technological knowledge and advantage.

Requires substantial costs for acquistion of technology

Precedes technology absorption

Technology Absorption v/s Technology

Acquistion


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Generally, enterprises / organizations plan for

technology absorption within reasonable time / planned

time as it provides following advantages like early use

of acquired technology and reaping benefits therefrom,

gaining technological competitive edge etc.

Sometimes there could be delays in technology

absorption due to variety of reasons.

Delays in technology absorption could be harmful to the

organization.Therefore technology absorption needs to properly

managed by the organization.

Management of Technology Absorption

by Organizations


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Developing good understanding and mutual

trust between technology transferor and

technology recipient organizations.

Proper, clearcut and well-defined agreementbetween technology transferor and technology

recipient organizations

Developing time-bound and target-oriented

schedule for technology absorption

Top management support to the technology

absportion

Organizations take following steps

to manage technology absorption:


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Hiring of requisite skilled workforce; if same is not

available, seeking early training of own current

employees by technologists / technicians from thetransferor enterprise.

By actively complying with various government

directives and requirements on technology

upgradation and technology absorption.


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Due to variety of benefits of technology absorption,

national governments seek quick absorption of

technology.

While seeking approval to Foreign Technology TransferAgreements under the approval route from

Government of India, the technology acquiring

organizations / enterprises are required to indicate and

commit timebound schedule for technology absorption.This puts pressure on organizations to plan systematic

and timebound technology absorption

Government Guidelines on Technology

Absorption by Organizations


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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 ofthe commercial business services business

unit


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SAICs 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 andpetroleum application services addressing the

upstream segment.


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Stronger appeal to clients in the energy industry,

and separation from its Indian provider peers

Wipro is already the largest offshore Tier 1 providerin 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.


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Will help Wipro gain capabilities in areas such

as petro-technical data management andpetroleum application services and digital oil

fields.

Technology Absorption and Acquisitionfinal

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