Infosys Consulting

Leading the Next Generation of Business and Information Technology Consulting

GROUP -3

Agenda
Consulting Landscape before 2004

Background
Infosys Consulting Model Company Organization

Integration of Infosys Consulting and Infosys

Technologies Recommendations Infosys today

Consulting Landscape before 2004

hardware, software, & services new service could cannibalize Software or Hardware offerings. 2) Challenge of perception.

1) IBM did

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 adhoc 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?

Value Chain
Business consulting
Application dev and maint.

Implement ation

Infra management

BPO

Hybrid model US based subsidiary Infosys Consulting Inc.

Porters Five Forces Infosys Consulting 2004

Low Threat of substitutes
No substitutes

Medium Buyer Power

Established companies

High Competitive Rivalry

Medium Supplier Power
Higher skills

Low Threat of New Entrants

Brand importance

Background

History of Infosys Consulting

Started in 2004 Initial Investment $20M

Infosys Consulting Subsidiary of Infosys Limited

(As of 2006) Led by former Deloitte consulting leadership Focused on Global Delivery Model (GDM) Help achieve non-linear growth

Vision

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

Strategic Partnerships for Building Tomorrow's Enterprise

Philosophy

Mission

Belief

Measure Everything measurable business process metrics

Infosys Consulting Model

Objectives
Help clients become more competitive

Extremely competitive pricing

Develop employees to great leaders Change 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 work Some degree of risk proofing

Infosys Consulting Model

1-1-3 Model

1 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 agility

Lower costs ($100 versus $175 to$225) End to end delivery and deployment

Measure everything Value Realization Model

Some Financial Figures

Revenue Contribution
2.00%

Profitability (Consulting)
0.00% -20.00% -40.00% -60.00% -80.00% -100.00% -120.00% -140.00% -160.00% -180.00% 1 2 3 4

1.50%
1.00% 0.50% 0.00% 2005 2006 2007 2008 Revenue Contribution

Profitability (Consulting)

Revenue
300 250 200 150 100 50 0 2005 2006 2007 2008 Revenue

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

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

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

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 culture

Recruiting the right people

Creating a differentiated approach Rewarding employees

Unique culture
Assertive business consultant
in an open and transparent culture

Confident consultant

Infosys 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
According Harvard Business Review, 2011 Economic Model of ICI
Consultant Rates System Integration/Te ch Consulting High ($250 - $400 is on par with the market rate) Partner Leverage Ratio Low (700 consultants worldwide, 42 partners) Consultant Utilization Medium (time for learning ,self development activities)

Strategic Reward Systems

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

Training

Overtime pay rules in contract

Rewards Labor Relations Performance Management (delivered client value) Employment Sign-on Bonus

Merit 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 ICI

Job allocation dilemma The Fork in the Road

approach

Business transformation projects ICI Technology related projects ITL

Constant redefinition and learning Infosys 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 verticals
Financial Services Energy,Comms Services Retail CPG Manufacturing

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/201

1-08-04/news/29850740_1_infosys-consultingconsulting-subsidiary-stephen-pratt www.infy.com www.indiainfoline.com HBR Case study - Infosys Consulting in 2011 by Robert A. Burgelman, Debra Schifrin Source: Stanford Graduate School of Business http://seekingalpha.com/article/93605-infosysmoving-up-the-consulting-food-chain

Thank You