infosys consulting

GROUP -3

Infosys Consulting Leading the Next Generation of Business and

Information Technology Consulting

Agenda

Consulting Landscape before 2004BackgroundInfosys Consulting ModelCompany OrganizationIntegration of Infosys Consulting and Infosys

TechnologiesRecommendationsInfosys “today”

Consulting Landscape before 2004

1) IBM did hardware,

software, & services

new service could

cannibalize Software or Hardware offerings.

2) Challenge of

perception.

1) Long standing

client relationship, strong brand,

depth and breadth of expertise

2) Challenge in co-

ordination of process,

methods in global

delivery

1) Largest IT services

provider in India

2) Previously performed

ad-hoc consulting

work. Created a

Global Consulting BU in 2004

1) Organic and inorganic

growth. Made

strategic acquisitions (NerveWire and AMS)

2) Dedicated high-end business

consulting arm: WCS

Where Is Infosys Consulting?

Business consulting

Application dev and maint.

Implementation

Infra manageme

ntBPO

Value Chain

Hybrid modelUS based subsidiary – Infosys Consulting Inc.

Porter’s Five Forces – Infosys Consulting 2004

High Competitive Rivalry

Low Threat of substitutes• No

substitutes

Low Threat of New Entrants• Brand

importance

Medium Supplier Power• Higher

skills

Medium Buyer Power• Established

companies

Background

History of Infosys Consulting

Started in 2004 – Initial Investment $20MInfosys Consulting – Subsidiary of Infosys

Limited (As of 2006)Led by former Deloitte consulting leadershipFocused on Global Delivery Model (GDM)Help achieve “non-linear” growth

Philosophy

Vision

BeliefMission

To be a globally respected corporation that provides best-of-breed business solutions, leveraging technology, delivered by best-in-class people

Strategic Partnerships for Building Tomorrow's Enterprise

Measure Everything – measurable business process metrics

Infosys Consulting Model

Objectives

Help clients become “more competitive”Extremely competitive pricingDevelop employees to great leadersChange the rules of the consulting industry

Global Delivery Model

Ensure distribution of application and business process lifecycle activities and resources

Organization has access to resources at varying costs – Onsite + Offshore model

Round the clock workSome degree of “risk

proofing”

Infosys Consulting Model

1-1-3 Model1 consulting resource at $150 - $400 (Market

rate)Onsite implementation resource at $100

(Much lesser than market rate)Three offshore developers at $105 combined

(extremely low)Blended Rate - $100 an hour (High Margins

and lower costs)

Infosys Consulting and GDM

Disruption in Business Model because of GDM

Value Proposition

Right mix of business and technology consultants

Shorter delivery time (24x7 work) and agilityLower costs ($100 versus $175 to$225)End to end delivery and deploymentMeasure “everything” – Value Realization

Model

Some Financial Figures

2005 2006 2007 20080.00%0.20%0.40%0.60%0.80%1.00%1.20%1.40%1.60%1.80%

Revenue Contribution

Revenue Contri-bution

2005 2006 2007 20080

50

100

150

200

250

300

Revenue

Revenue

1 2 3 4

-180.00%-160.00%-140.00%-120.00%-100.00%-80.00%-60.00%-40.00%-20.00%

0.00%

Profitability (Consulting)

Profitability (Consulting)

SWOT Analysis

Strengths

•Low Blended Costs•Access to existing Infosys customers• Master at the Global Delivery Model (Operational Efficiency)• Good technical competence

Opportunities

•Cost leadership – More cost concious geographically spread customers• New segments of growth• Tremendous market of growth (only 0.8% of the requirement satisfied)

Threats•Low cost model- Easy to replicate• Culture in alignment with Infosys technologies• Other major technology players in India WIPRO, TCS etc

Weaknesses

•Brand – Low cost Indian company• Very little consulting experience previously• Subsidiary of Infosys Limited (Liablity is not shared)• Attract and retain top talent• No systems integration expertise

S W

TO

Some Challenges

Technology Integration is not traditionally a strong point – Application Development & Maintenance is Globally IBM and Accenture have better system

integration capabilities Develop system integration capabilities, through

acquisition.

Brand – Infosys is not a strong brand globally Bringing customers on board is tough

Value based realization model – NVIDIA project

Revenues increasing but still not able to breakeven Extremely low pricing must be hurting

Relook at the prices and see if higher margins can be achieved.

Company Organization

Organization Structure

Building a unique cultureRecruiting the right peopleCreating a differentiated approachRewarding employees

Unique culture

Confident

consultant

Infosys

culture

Assertive business consultant in an open and

transparent culture

Challenges-• Define the right culture• Build unique culture from people from different

consulting firms• Integrate people into culture with no consulting

experience

Recruiting Right People

Hire first rate employees Referral based to target top 10% of other consulting

companies MBA graduates

Shuffle internal work force to keep people relevant for business development

Local presence

Differentiated Approach

Key attributes – meritocracy and transparency

Staffing model Responsibility to all No bench policy - continuous learning, teaching,

billing and contributing Engagement on basis of skills Personal margin contribution index Nominations and scoring for promotions Flexible timings

Economic model

System Integration/Tech Consulting

High($250 - $400 is on par with the market rate)

Low(700 consultants worldwide, 42 partners)

Medium(time for learning ,self development activities)

According Harvard Business Review, 2011 Economic Model of ICI

Consultant Rates

Partner Leverage Ratio

Consultant Utilization

Strategic Reward Systems

Client Mutual fund

Performance Management(delivered client value)

Employment

Training

Labor Relations

Rewards

Overtime pay rules incontract

Sign-on Bonus

Merit Pay

Performance of client equity against S&P 500Skill-based pay

Integration of Infosys Technologies and Infosys Consulting

Leveraging Infosys Technologies

Emulate ITL (industry-wise organized)Synchronized using metrics

BU specific goals for ICI ICI had revenue specific goals for ITL

“One Infy” – internal program Enhance collaboration, cultural integration among

workforce Capabilities in alignment with goals One company to customers

Leveraging Infosys Technologies

70% of ICI revenues from existing ITL customers

ITL to adapt its sales process to include ICIJob allocation dilemma – “The Fork in the

Road” approach Business transformation projects – ICI Technology related projects – ITL

Constant redefinition and learningInfosys Consulting in 2006 ,with an employee

base of 176,served 54 clients ,generated revenue of Rs. 143 crore with a net loss of Rs. 36 crore.

Challenges

Business perspective Working together to optimize performance Definition of line between business transformation

and technology ICI to get enough airtime from ITL

Cultural perspective ICI contained more foreign nationals ITL contained more Indian nationals

Global perspective by bringing various managers together

Recommendations

Recommendations

Infosys should use the huge cash pile of approx. $900M for strategic acquisitions

Look forward for more intersection with client businesses and technology and move with global trends to provide higher value offerings

Instead of depending on Infosys Technologies’ clients, they should create their own client base

Revenues are flat – Focus on newer markets like India where traditionally Infosys is strong as a brand

Recommendations

Keep the consultant utilization rate low – Can act as local “gurus”

Focus on “Value based” deals – Build relationships with customers

Create a platform for interaction between the largely international ICI workforce and the mostly Indian ITL workforce – Helps in collaboration and spread of ideas

Work on creating a brand so that ICI can position itself as a consulting company rather than a low cost service provider

Infosys on 26/11

Infosys 3.0

ICI is now C & SI – Consulting & System Integration - as a part of corporate re-structuring

C & SI is divided into four verticalsFinancial ServicesEnergy,Comms ServicesRetail CPGManufacturing

C & SI contributes 25% to the revenues

Infosys 3.0

Stephen R Pratt ,Global Head & Managing Partner says

“It was important for us to start out as a subsidiary because we needed to develop a consulting culture and a way of working that is world-class. If we had started out as part of Infosys we would have been overwhelmed by the culture at the parent company. And we would not have been able to develop a distinct culture and way of doing things. Now we are successful and established enough so that we can have a broader influence on Infosys.”

References

http://articles.economictimes.indiatimes.com/2011-08-04/news/29850740_1_infosys-consulting-consulting-subsidiary-stephen-pratt

• www.infy.com• www.indiainfoline.comHBR Case study - Infosys Consulting in

2011 by Robert A. Burgelman, Debra Schifrin Source: Stanford Graduate School of Business 

http://seekingalpha.com/article/93605-infosys-moving-up-the-consulting-food-chain

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