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7/31/2019 Infosys Nilu
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COMPANY PROFILE:
Infosys is one of the largest businesses in India with revenue of about 7 billion USD in financial year
2012-13. The company specializes in Information Technology (IT) and consulting. N.R. Narayana Murthy
and six others started the company in 1981, and it is now the largest IT Company in India with its
headquarters in Bangalore (although it was started in Pune). It employs more than 90,000 ITprofessionals and was famously rated 'Best Employer in India. It operates in a number of business
sectors from banking to retail, and its services tend to encompass end-to-end IT solutions which includes
a whole bundle of added-value solutions from infrastructure to software engineering.
Infosys Technologies Ltd. was started in 1981.
Its initial investment was $ 250 US.
Today, it is a global leader in the "next generation" of IT and consulting.
Infosys serves the client globally and is one of the pioneers in strategic off shore
outsourcing of software services
Milestones:
In 1987 Infosys got its first foreign client.
In 1993, Infosys became a public limited company.
In 1999, Infosys crossed $100 Million and was listed on NASDAQ.
In 2006, Infosys completed 25 years of its existence and its revenues crossed $ 2 billion.
Today Infosys has more than 1,03,078 employees and has presence in more than 20 countries
across the world. Its corporate headquarters is in Bangalore
Infosys moved up to No. 14 on FinTech 100
Infosys was awarded the Indias best company to work for in 2009.
A leader in SAP implementation services.
VISION of INFOSYS:
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To be a globally respected corporation that provides best-of-breed business solutions,
leveraging technology, delivered by best-in-class people."
MISSION:
To achieve our objectives in an environment of fairness, honesty, and courtesy towards ourclients, employees, vendors and society at large."
Infosys pioneered the Global Delivery Model (GDM), based on the principle of taking work to
the location where the best talent is available, where it makes the best economic sense, with
the least amount of acceptable risk. Continued leadership around GDM enables Infosys to drive
extraordinary efficiencies and free up clients resources for strategic transformation or
innovation initiatives.
Infosys has a global footprint with 68 offices and 70 development centers in US, India, China,
Australia, Japan, Middle East, UK, Germany, France, Switzerland, Netherlands, Poland, Canadaand many other countries. Infosys and its subsidiaries have 151,151 employees as on June 30,
2012.
Infosys takes pride in building strategic long-term client relationships. 99.1% of our revenues
come from existing customers (Q1 FY 13).
Infosys gives back to the community through the Infosys Foundation that funds learning and
education.
Infosys is delivering measurable business value in 3 ways:
Transform
We can transform the fundamental shape of your business P&L. Regardless of which team you
engage with, we have a best-practice process for delivering value. We call it IMPACT to ensure
a clear line of sight from process change to bottom-line impact, ensuring that you receive the
business value you were promised.
Optimize
Beyond transformation and innovation, it boils down to execution - delivering on time, on
budget and "on value". We can optimize your core operations to drive best-in-class efficiencyand help fund the transformation and innovation.
Innovate
We can inject a level of product and service innovation into your business to create new
revenue opportunities through collaboration and co-creation. We keep abreast of the latest
technology and how it applies to your business issues. What you get from us is best-of-breed
http://www.infosys.com/global-sourcing/global-delivery-model/pages/index.aspxhttp://www.infosys.com/contact/pages/index.aspxhttp://www.infosys.com/contact/pages/index.aspxhttp://www.infosys.com/global-sourcing/global-delivery-model/pages/index.aspx7/31/2019 Infosys Nilu
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solutions. The foundation of our innovation capability is our core lab network Infosys Labs
and the new thinking that our team of over 600 researchers brings to the table.
Current Position of IT ITES Sector of India
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SWOT analysis of Infosys:
Strengths
Since the company is based in India its competitive advantage is enhanced. The Indian
economy, despite weak economic indicators such as relatively high rates of inflation, has
low labor costs. The workforce has relatively high skills levels in Information Technology.
Couple these two elements together and you have an operational basis that offers low-
cost based, highly skilled competitive advantage. Trained Indian personnel often speak
very good English and are sensitive to Western culture, underpinned by India's colonial
past.
Infosys is in a strong financial position. The business turned over more than $4 billion in
2008. This means that it has the capital to expand, and also the basis to leverage
potential investors.
The company has bases in 44 global development centers, most of which are located in
India, although the company has offices in many developed and developing nations. This
means not only that Infosys is becoming a global brand but also that it has the capability
to support the global operations of multinational clients.
Weaknesses
Infosys on occasion struggles in the US markets, and has particular problems in securing
United States Federal Government contracts in North America. Since these contracts are
highly profitable and tend to run for long periods of time, Infosys is missing out onlucrative business. Added to this is the fact that its competitors do well in terms of
securing the same Federal business (and one should also take into account that many of
its competitors are domiciled in the US and there could be political pressure on the US
Government to award contracts to domestic organizations).
Despite being a huge IT company in relation to its Indian competitors, Infosys is much
smaller than its global competitors. As discussed above, Infosys generated $4 billion in
2008, which is relatively low in comparison with large global competitors such as
Hewlett-Packard ($91 billion), IBM ($91 billion), EDS ($21 billion) and Accenture ($18
billion). It is sometimes argued that Infosys is weaker when it comes to high-end management
consultancy, since it tends to work at the level of operational value creation.
Competitors such as IBM and Accenture tend to dominate this space.
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Opportunities
At a time of recession in the global economy, it may appear that some companies will
reduce take up of services that Infosys offers. However, in tough times clients tend to
focus upon cost reduction and outsourcing - with are strategies that Infosys offers. So
hard times could be profitable for Infosys.
There is a new and emerging market in China as the country undergoes a huge industrial
revolution.
The strategic alliance between Infosys and Schlumberger gives the IT company access to
lucrative business in the gas and oil industries.
There has been a trend over recent years for European and North American companies
to base some or all of their operation in India. This is called an offshore service.
Essentially there is a seamless link between domestic operations and services hosted in
India. Examples include telecommunications companies such as British Telecom and
banks such as HSBC that have customer service and support centers based in India.
Think about the times that you have made calls to a support line to find that the adviser
is in Mumbai or Bangalore and not in your home market.
Threats
India is not the only country that is undergoing rapid industrial expansion. Competitors
may come from countries such as China or Korea where there are large pools of low-
cost labor, and developing educational infrastructures such as universities and
technology colleges. Customers may switch to other offshore service companies in other countries such as
China or Korea.
Other global players have realized that India has the benefit of low-cost, highly-skilled
labor that often speaks English and is culturally sensitive to Western practices. As with
all global IT players, Infosys has to compete for skilled labor and this may have the effect
of driving up wage levels, and making it more difficult to recruit and retain staff.
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STRATEGIC ANALYSIS
CORPORATE LEVEL STRSTEGIES: CORE STRATEGIES:
Global Delivery Model Producing where it is most cost effective to produce & selling
where it is most profitable to sell.
Moving up the Value Chain Getting involved in a software development project at the
earliest stage of its life cycle.
PSPD Model Predictability of Revenues, Sustainability of Revenues, Profitability, De -
risking for risk management.
ACTION TAKEN:
To maintain low-cost advantage they have opened offices in Czech Republic, Mauritius,
Poland, Philippines, Thailand and Mexico. Invested in developing training centers
Improved quality capabilities CMM level 5i company.
Infosys Consultancy established to provide high end services in value chain.
Has hedged currency for more predictability of revenues (risk management).
GENERIC STRATEGIES:
Low cost Global delivery 24/7 Model.
Little differentiation in low-end services of value chain; high differentiation in high endservices of value chain like software products and package solutions.
Focus on quality, customer relationship management, timely-delivery.
BALANCED STRATEGIC SCORE CARD
FINANCIAL:
Improve market share of niche products
Achieve Profitable Growth to be One of Top 5 Global Companies
Attain World Class Cost Competitiveness
CUSTOMER:
Acquire Customers Through New Offerings & Reach
Acquire Customers Through Existing Offerings
Retain Profitable Customers
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Improve Customers Satisfaction
BUSINESS PROCESS:
Product Rationalization, Product Development
Acquire / Enhance Capacity
Increase Loyalty Through Customer Relationship Mgmt
Improve Order Management Process
Improve Process Capability
Improve Supplier Management
LEARNING AND GROWTH:
Enhance Strategic Skills
Create a culture of high performance and team based working Knowledge Management
Enhance Employee Satisfaction
Leadership Development
PEST ANALYSIS OF INFOSYS
POLITICAL
Political stability: Indian political structure is considered stable enough expect the fact
that there is a fear of hung parliament (no clear majority). It is positive
U.S. government has declared that U.S companies that outsource IT work to other
locations other than U.S. will not get tax benefit. It is deep negetive
Government owned companies and PSUs have decided to give more IT projects to
Indian IT companies. It is positive.
Terrorist attack or war. It is negative.
ECONOMIC
Domestic IT Spending (Demand): Domestic market to grow by 20% and reach approx
USD 20 billion in 2008-09. It is positive
Currency Fluctuation. It is negative
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Attrition: Due to recession, the layoffs and job-cuts have resulted in low attrition rate. It
is mildly positive
SOCIAL
Language spoken: English is widely spoken language in India, English medium being the
most accepted medium of education. Thus, India boasts of large English speaking
population. It is highly positive
Education: A number of technical institutes and universities over the country offer IT
education. It is highly positive
Working age population. It is positive
TECHNOLOGICAL
Telephony: India has the worlds lowest call rates.
Expected to have total subscriber base of about 500 million by 2010.
India has the second largest telephone network after china.
Tele density 19.86 %
Enterprise telephone services, 3G, Wi-max and VPN are poised to grow. It is highly
positive
Internet Backbone: Due to IT revolution of 90s, Indian cities and India is well connected
with cable. It is positive
New IT technologies: Technologies like SOA, Web 2.0, High-definition content, gridcomputing, etc and innovation in low cost technologies is presenting new challenges
and opportunities for Indian IT industry. It is positive.
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FINANCIAL ANALYSIS:
Sales turnover of Infosys
Reported net profit of Infosys:
31,254.00
25,385.00
21,140.00 20,264.00
15,648.00
Mar '12 Mar '11 Mar '10 Mar '09 Mar '08
Sales Turnover (in Rs crore)
Sales Turnover
0.00
1,000.00
2,000.00
3,000.00
4,000.00
5,000.00
6,000.00
7,000.00
8,000.00
9,000.00
Mar '12 Mar '11 Mar '10 Mar '09 Mar '08
Reported Net Profit (in Rs. crore)
Reported Net Profit
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Ratio Analysis:
Mar '12 Mar '11 Mar '10 Mar '09 Mar '08
Current Ratio 4.68 5.11 4.28 4.71 3.30
Quick Ratio 4.60 5.02 4.20 4.67 3.28
Debtors Turnover Ratio 6.50 6.81 6.37 6.25 5.81
Asset Turnover Ratio 4.37 3.67 3.33 3.39 3.47
Financial health: Mar12 Mar11 Mar10 Mar09 Mar08
Total Assets (in Rs cr.) 29,757.00 24,501.00 22,036.00 17,809.00 13,490.00
Net Current Assets 23,266.00 18,621.00 13,212.00 12,390.00 8,595.00
Business model
Infosys Technologies Business Model
The process of
breaking projects
down into their
logical components
and then
distributing those
components to
locations (onsite,
nearshore,
or offshore) where
they can be
delivered at
maximum value.
Global Delivery Model
Definition
38 global
development centers
20 in India
18 in the US, the
UK, Australia,
Canada, China,
Mauritius and
Czech Republic.
Lower Cost
Faster
Implementation
Lower Risk
Measurable
Vehicles
Modular Global
Sourcing
Framework
Customer Value
1
2
3
Innovation
to Meet New
Customer
Needs
4
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Infosys Technologies Business Performance
Revenue by Industry Revenue by Geographic Market
Infosys Technologies
What are the Competitive Advantages?
Global Delivery Model
Global development
centers
Right Talents
Open/transparent
& performance-
driven culture
Excellent training
program
Customer
relationship
Flat organizationalstructure
Right reward system
(stocks, career visions)
Domain
knowledge
Brand/
reputation
Abundant supply of
low-cost scientists
and engineers
Infosys TechnologiesIndia
Cost &
quality
advantage
coming from
GDM and
low-cost
labor
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KEY SUCCESS FACTORS OF INFOSYS:
Sound Management Skills
Nurturing Working Atmosphere
Commitment To Values, Speed ,Imagination and Excellence
Personnel Management
Infrastructure
OTHER FACTORS
Invest in well understood, proven product & not just R&D.
While dealing with investors, always under promise and over deliver.
Have a healthy sense of paranoia and respect for the competition.
Leaders in the making
INFOSYS BCG MATRIX
IN USA:
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INFOSYS BCG MATRIX IN INDIA: