infosys consulting
TRANSCRIPT
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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