HCL co-innovation lab for new technology

Information technology (IT) major HCL Technologies today announced the opening of a co-innovation lab in Singapore with American pharmaceutical firm Eli Lilly to develop new technologies and solutions specifically for the drug maker.

Established at an undisclosed cost, the 35,000 square ft facility is the first of a likely new template for collaboration that HCL intends to employ as it seeks to grow its innovation-driven businesses further.

While this is the IT firm’s “first single-client focused” lab, earlier there have been discussions with other pharmaceutical majors, including Pfizer and Merck and a Dubai-based telecom company, to set-up similar facilities.

“But this is the first to come to fruition,” said Virender Aggarwal, HCL’s president for Asia Pacific, Australia, New Zealand, West Aisa and Africa, collectively known as the Rest of the World (RoW) businesses.

The HCL-Eli Lilly Co-Innovation Lab, Aggarwal explained, will work with a “very loose charter” to create applications and solutions that will support the drug maker’s global operations.

It will also leverage HCL’s existing expertise in cloud computing, automation, business analytics and enterprise mobility, among others, for the development of proof-of-concepts, which essentially indicates the feasibility of a method or idea.

“If any piece of innovation is not utilised by Lilly, we are free to use it for any other customer. They have the first right of refusal,” said Aggarwal, without divulging the exact modalities of revenue sharing between the two parties.

Although executives of Indianapolis-based Eli Lilly, which had revenues of about $23.1 billion last year, were unavailable for comment, the drug maker had earlier this year reportedly indicated it would continue to focus on strengthening its own research and development mechanism. The collaboration with HCL would aid this process.

But for HCL, which has sought to grow its research and development capabilities in Singapore, such ‘single-client focused’ labs could provide a new model for collaborative innovation, especially for servicing those with a presence in the RoW region.

“The commodity, cost-oriented, procurement-driven buying days are pretty much gone. To that extent, it’s very important in the HCL strategic canvas to be able to drive RoW and with Singapore as our pivot point for the entire region. It’s a fantastic destination as a leap-off point,” said HCL VP and chief marketing officer Krishnan Chatterjee.

Year-on-year, on a last twelve month basis, HCL’s RoW business has grown by 59.8 per cent, compared to 26.7 per cent and 19.5 per cent growth in the Americas and Europe respectively, as per the company’s latest results.

To further strengthen its RoW presence, in February this year HCL also opened its Global Enterprise Mobility Lab in Singapore, where it already has about 1,000 engineers working at its Development Centre.

“The recession has worked as a reset point. Today what we hear from clients is that IT is being challenged with business growth deliverables as opposed to just ‘cost take-out’. If we don’t start playing in this area and getting into the zone, where for our clients we impact their business growth and competitive edge, we will not be differentiated and that is a threat” explained Chatterjee.

For HCL, he added, “that is a very strong reason why we want to do this and will continue to do many other such experiments.”

The HCL-Eli Lilly Co-Innovation Lab is a first, but for the Indian IT major it is unlikely to be the last.