Mrk 425Term Project Fall 2009

Infosys Technologies Ltd.

Group Members:Aline Saab

Miriam AzizCharbel Boutros

Kareem …..

Presented to: Mrs. G. Sfeir

On 19-01-2010

TABLE OF CONTENTS.

INFOSYS’ BACKGROUND………………………………………………………………….….....…..3 TIMELINE…………………………………………………………...……….……….….…3 MISSION,VISION,& VALUES…………………………………………………..…..……5SOLUTION TO CASE STUDY…………………………………………………………………………6COMPANY OVERVIEW………………………………………………………………………………..8 HUMAN RESOURCES........................................................................................................8 FIGURE 1: NO. OF EMPLOYEES……………………………………………..………..8 TARGET MARKETS……………………....………………………………………………9 INDUSTRIES WHERE INFOSYS COMPETES……………………………….….10 INFOSYS COMPETITORS INCLUDE………………………………….…….…..10PRODUCT DEVELOPMENT………………………………………...………………………………...11 FIGURE 2: TABLE SHOWING PRODUCT DEVELOPMENT…………………...……11GLOBAL DELIVERY MODEL (GDM)……………………………………....................................... 12SWOT ANALYSIS………………………………….………………………………………….….……17 FIGURE 3: SWOT ANALYSIS…………………………….…………...…………….….…...17 STRENGHTS………………………………………………………..……..…….………….…...19 WEAKNESSES………………………………………………………………..…………………20 OPPORTUNITIES…………………………………………………………………....……..…....21 THREATS…………………………………………………………………………….…………..22 FIGURE 4: BCG MATRIX OF INFOSYS IN USA………………………...…….……………………23FIGURE 5: PORTER’S FIVE FORCES MODEL…………………...……………………….………..25ATTACHMENTS…………………………………...…………………………….……………………..28REFERENCE…………………………………………………………..………………………...………30

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.........INFOSYS’ BACKGROUND

Infosys Technologies Ltd. was started in 1981 by Narayan Murthy along with six

other partners after borrowing US$ 250 from their wives. They shifted with an

unexpected way and in a short period to become Global Market leaders and still are by

providing end-to-end IT business solutions. The Company offers Technical Consultancy,

Design, Development, Software Re-Engineering, Maintenance, System integration,

package evaluation, implementation, infrastructure management services. With a vision

of delivering best -of- breed solutions delivered by best-in-class professionals, Infosys is

reaching an annual earning averaging between $ 2 to $3 B annually, over 69,000 people,

operating in 8 different countries, within 50 major cities. The company provides business

process management services including offsite customer relationship management,

finance accounting, administration and sales order processing through its subsidiary –

Infosys BPO. Rated in the 100 List of NASDAQ, Infosys Ltd has been nominated in

2001 “Best Employer in India”, and often called as “Microsoft of India”.

TIMELINE.

1981: Establishment in India.

1987: First international office in US

1993: Successfully completed IPO in India

1995: Set up development centers across cities in India

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1996: Infosys foundation setup for CSR

1996: e-Business initiative started

1997: Assessed at CMM level 4

1999: $100 Million in annual revenue

1999: Listed on NASDAQ

1999: Assessed at CMM level 5

2000: Opened offices in UK, US, France, Hongkong

2000: Combined e-Business with rest of organization

2001: Rated Best Employer of India in a study by Business Today-Hewitt

associates.

2002: Touched half a billion US dollars in annual revenue

2003: Establishes subsidiaries Infosys China and Infosys Australia

2004: Crossed US $1 Billion in annual revenue

2004: Launches Infosys Consulting Inc

2005: Largest international equity offering of US $ 1 billion from India

2006: 60,000+ Employees. Revenues crosses $ 2 billion. Celebrates 25 years

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MISSION, VISION, & VALUES.

Mission

"To achieve our objectives in an environment of fairness, honesty, and courtesy towards

our clients, employees, vendors and society at large."

Vision

"To be a globally respected corporation that provides best-of-breed business solutions,

leveraging technology, delivered by best-in-class people."

Values:

Customer satisfaction : striving to keep customers satisfied and to exceed

their expectations.

Leadership by example : to be an example for other companies in the industry

Justice : to be fair and to earn the trust of customers

Pursuit of excellence : to keep on improving in every way possible.

Integrity : to be ethical

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SOLUTION TO CASE STUDY.

As we read in the case, PFS had an important decision to make. In a summary, PFS

wants to implement an e-procurement system featuring JAVA-based Ariba software. And

as mentioned in the case PFS managers were sure that this project is two folded: a

consulting and an IT project. After deliberating they decided to handle the whole project

to one company (end-to-end).In case the company chosen worked as expected it will be

handed more and more end-to-end projects.

There were two companies at first Excalibur and Merrimac Consulting. They both are

leading consulting firms while their weakness is maintenance. On the other hand, Infosys

were pioneers in maintenance while their weakness is consultations. Infosys had already

impressed PFS with its maintenance project (good quality and price).

Managers of PFS had to choose between those three companies and Infosys team had to

work on a proposal to convince PFS that they should be their choice.

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.........While preparing the proposal, Infosys team deducted that “To meet Infosys profit

requirements, they determined that the cost-plus price of the implementation phase of the

project – purchasing process redesign, vendor selection and training, package

customizations, integration with PFS enterprise requirement planning (ERP) system,

installation, and “burn-in” – should be $2 million (Rs. 92 million). As for the

maintenance portion of the end-to-end solution, the team estimated a price of $400,000

(Rs. 18.4 million) per year.

Infosys can choose between three alternative courses of action:

1. Alternative one: Infosys will offer all the consulting services for $2 million and

the maintenance for $400,000 to achieve their expected profits. This will mean

that they will be offering the same prices as their competitors (no cost advantage).

On the other hand, they will be making good profit in case they were offered the

project.

2. Alternative two: Infosys will offer the both consulting and maintenance service

at a price lower than the cost. Surely Infosys will have a cost advantage and PFS

will be attracted to accept their proposal but on the other hand Infosys won’t make

any profit which is not their goal at all.

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3. Alternative three: Infosys will offer the consulting services at a price less than

$2 million while the maintenance services will be offered at $400,000. This

means that Infosys will still make profit .

In our opinion the best course of action is alternative 3 since PFS knows that

Infosys is as good as they need in maintenance therefore the price won’t be a

problem. While in the consulting part, it is more suitable for Infosys to offer a

cost less than its competitors since the competitors are market leaders and known

consulting firms.

COMPANY OVERVIEW

Human Resources: Infosys focus on the quality of its employee that is from the academic and technical

perspective. In addition to that, Infosys focuses on constantly training its employee that’s

why it has maintained a high standard of staff.

The interesting part is that Infosys has implemented a Customer relationship

Management (CRM) system called CIMBA – Customer Information Management By

All. This system improved the communication between the company and its customers

by integrating the front-end sales system with the back-end delivery system.

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Figure 1: No. of employees.

As to the structure of this organization, Infosys is a free form organization with no

hierarch, which means that Infosys believes in equality among its employees.

Target Markets:

Infosys has several target market to satisfy their customer. In addition, there are nine

markets used by Infosys:

1. Auto and Aerospace => auto manufacturers

2. Banking and capital markets => all banks, stock exchange, brokers and traders.

3. Communication Service providers => cable and satellite, data and messaging

4. High Tech and discrete MFG => computer hardware and software,

telecommunication infrastructure equipment.

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5. Insurance and health care => all types of insurance and health care products and

services.

6. Life Science => All types of biotechnology and pharmaceuticals manufacturing.

7. Resources, energy and utilities => Agriculture, chemicals, paper and pulp.

8. Retail, Distribution and CPG => Beverages, food and food retail.

9. Transportation and services => Education, business services and all

transportation services.

INDUSTRIES WHERE INFOSYS COMPETES

Computer Services.

Information Technology Services (primary).

Business Services.

Consulting.

Staffing Outsourced Human Resources Services.

Infosys competitors include:

Satyam

Tata Consultancy

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......... Wipro Technologies

PRODUCT DEVELOPMENT.

Current Market New Market

Current Product

Market Penetration Strategy

Market Development Strategy

New Product

Product Development Strategy

Diversification Strategy

Figure 2: Table showing product development.

MARKET PENETRATION STRATEGY:

Current Markets: USA and Europe

Current Products: ADM, BPO, consultancy services and software products

MARKET DEVELOPMENT STRATEGY:

New Market: India, Middle-east and Australia

Current Product: ADM, BPO, consultancy services and software products

PRODUCT DEVELOPMENT STRATEGY:

Current Market: USA and Europe

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New Product: Consultancy and package implementation services

DIVERSIFICATION:

New Market: India, Middle-east and Australia

New product: Consultancy and package implementation services

GLOBAL DELIVERY MODEL (GDM)

We noticed something very interesting in the case which is the presence of Infosys’s

employee in different locations and their commitment to communicate in the best way to

get to the solution. “At 6:00 a.m. (6.00 hours) the next morning, Rahul inititated a hastily

arranged teleconference call with Jaspal in Dallas, and Lalitha and Ravi in Bangalore”.

We mention this since we find that this is part a small part actually of the Global

Delivery Model (GDM) that Infosys has pioneered in. GDM, which emerged as a

disruptive force in the industry leading to the rise of offshore outsourcing. The GDM is

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.

So after reading the definition of GDM we realize that GDM was the reason that Infosys

was able to work at low-cost and deliver high quality products and services.

As we can see in Exhibit 1.3, GDM relies on geographically dispersed teams working

simultaneously at the lowest work breakdown level, and in multiple time zones to deliver

significant customer value.

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.........GDM is the most important strategic initiative; its aim is to accelerate the schedule in

order to achieve high time and cost predictability.

Infosys has a complete set of patents rights and systems to management. These tools

which are important for development are based on GDM to maintain the applications

globally, on-budget and on-time.

IPM: All information relevant to a project flows into IPM. The decisive achievement and

the evaluation analyses are based on the information of this tool. They help the

organization to perfect its capabilities.

MaST is a tool for scheduling and tracking a maintenance project. It is integrated with

other tools like IPM, PS-Web… The key features of MaST are:

-Multi-user system

- Customized life cycle tasks

- Request based tracking and scheduling

-Ease in preparation of milestone reports and closure reports

DART: Daily Activity Report is an intranet based tool used for tracking the time sheet of

every person. It is a real-time tool.

RADAR: a web based tool to track defects found in a lifecycle stage of a project. It can

be defined as history of defects of the project (origin, severity etc).

PRISM: is a tool used for project review by Senior Management. The SM personnel use

his experience and assess risks, changes etc. ensuring supports to schedule and budget.

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Internal Audit System: is a tool used by the Process Consultants (Quality Assurance) to

reach the desired quality standards and to improve the outcome.

SPC (Statistical Process Control): is to analyze the defects occurred in a project and

ensure the quality of the delivered code and strengthen the application.

Process Database/Process Capability Baseline: these 2 tools capture information related

to execute a project. The conclusions derived from data are used as guidelines.

I-Lite: is the follow up of a training plan which is required to each employee.

IPSP (Intelligent Production Support Platform): it is used in Production Support

Assignments. It ensures the support to desired Service Level and improves the

productivity.

Packaged application implementation/management: INSPIRE framework aids to assess

the maturity level of the business. Infosys has developed tools that enable to move from

one level to higher levels of maturity.

Impact Analysis Kit: it configures the assessment for each level of maturity. It helps to

analyze the current configuration compared with the expected one. The gaps are bridged

to take the business process to higher levels of maturities.

Estimation kit: is a by-product of Impact Analysis. When the last identifies the gaps, the

estimation kit analyzes each gap and what is required to bridge them. The effort is used

as a basis to reach the cost-estimate for the business.

ROI toolkit: enables the evaluation of the dollar-returns arising out of the IT initiatives

that take the business to higher levels of maturity as per the INSPIRE framework.

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.........Upgrade toolkit: it aids in upgrading to higher versions that improve the productivity,

efficiency and effectiveness of the business.

InTune: is a methodology that isolates the activities required at different stages up

gradation. InTune powers the global model of Infosys that delivers the values of lower

cost of ownership, faster time to market and superior quality of software. It comprises 5-

phased approach distributed between offshore and onsite locations:

1 System Study and Solution Design Documentation: customization and interfaces that

can be automated.

2 Offsite Trial Upgrade Documentation of new architecture: test environment.

3 Offsite Upgrade: upgrading, testing and fine tuning the plan.

4 Test Upgrade Finalize: checklist onsite tasks.

5 Production Upgrade: Upgrading production environment plan.

IntERPryz: a methodology describing a clear path for planning, executing, testing and

supporting the implementation process. It also leverages Infosys strength as to capture the

unique business processes that differentiate the client from competitors. It harnesses the

power of business and delivers optimal value by:

- Stressing accountability

- Integrating people, process, and technology

- Managing change effectively

- Invoking business transformation and not process automation

Customer Service Process: It has seven parts:

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1- Customer service approach: Infosys is a leading IT solutions company. Innovation,

Quality and Customer satisfaction are essential part of Infosys Value system.

Relationship Management: Infosys gives it a great importance.

- Relationship team with experience of managing engagements with multiple

shareholders.

- Engagement Manager focusing on partnering with the client.

- Balanced scorecard for defining achievements vs. objectives.

- Tight coupling between strategy and execution to ensure relationship objectives are in

line with the client’s essentials.

Technology Competence: Infosys uses its SETLABS (Software and Engineering

Technology) department to build technology competency along three dimensions:

* Building thought leadership.

* Creating methods and frameworks like .NET and M-Commerce.

* Deepening knowledge through specialist research.

Tools and Methodologies: Clients will have visibility into in-house tools &

methodologies. These alliances give access to the latest of technology.

Quality and Customer Satisfaction Quality: over 90% of the business comes as a repeat

one. Infosys Quality System Documentation (QSD) has a repeated process for every

stage in the service lifecycle which would translate to higher customer satisfaction.

2- Issue Resolution and Escalation Mechanism: the framework covers

* Issue identification.

* Issue resolution and communication.

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.........The Infosys relationship team identifies issues including weekly status reports,

daily/weekly conferences/video conferences. He identifies the risk arising and options to

resolve the issues.

3- Client Feedback Mechanism: Infosys conducts an annual Customer Satisfaction

Survey through an external agency.

This is aimed at obtaining formal, direct and honest feedback on the performance and

ability to meet client expectations. The survey is analyzed and the findings are discussed

by the Board of Directors.

SWOT ANALYSIS

Little Weaknesses to show among the advantages Infosys is offering. Based on the

mission statement of this company, "To achieve our objectives in an environment of

fairness, honesty, and courtesy towards our clients, employees, vendors and society at

large" the company is spreading in an unbeatable way in CRM, HRM, while focusing on

communication among team members internally and externally. Company’s Growth has

Reached a peak point, and a sharp increase in its stock from RS 95 /1993 to RS 8100/

1999, within 6 years to reach a stock price level exceeding the expectations of

international companies like Adobe Systems, Lycos and Novel.

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Figure 3: SWOT ANALYSIS

Strengths:

1. The labor force in India constitutes an undeniable strength point for Infosys. On

one hand, Infosys gains the advantage of low labor costs and on the other hand

Infosys Strives in HRM to select the prime students and improve their skills with

a continuous education. Its talented best-in-bread work force, selected to serve

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.........customers, and create a professional consensus, social consciousness, happy and

prosperous team.

2. An impressive initiative of Infosys Technologies Ltd is its Global Delivery Model

(GDM). It has spread fast up to the rise in offshore outsourcing. GDM is the

strategy of breaking a task into small parts in order to distribute them in a way

that the maximum value will be generated. GDM along with highly trained low

cost labor force will allow Infosys to offer better quality at significant lower costs.

3. All assets join forces to provide Infosys with the first mover advantage. Infosys

was the first Indian company to enter the NASDAQ stock exchange. Thus the

company value added product is in continuous growth.

4. Through the years Infosys succeeded in creating strong brand equity in the market

and at the same time it managed to achieve long standing client relationships.

5. Infosys has a strong financial position with a turnover of $4 billion in 2008, thus

leveraging investors made the organization a trustworthy source for investment.

An important advantage from the financial perspective is that the company could

even price under cost and still be making profit.

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Infosys Market – capital is about $30 billion which positioned it among the

NASDAQ 100 list. Its financial reputation and its moderate services cost are

giving her a good financial chance especially that PFS is aiming at cost control. In

addition to all of these advantages the profound company statement “Wealth

could be created ethically and honestly” serves the cost more and more.

6. Although the majority of Infosys global development centers are located in India

Exhibit 1.2 , The whole 44 centers are also located among many developing

nations to serve the global market as efficiently and effectively as intended.

Furthermore, and contradicting to almost all external competition, Infosys has

been able to get its major revenue from external markets 63% North America,

26% Europe, 2% India and 9% for the rest. Exhibit 1.1

7. Based on the consultancy service provided as a value added offer and because the

main work of Infosys is to deliver end-to-end solutions, which proves the

nomination of Infosys over the two consultancy companies presented as

competitors in the case. The present integration of Infosys in 65 Projects with

PFS, made it the best nominated because of many known reasons and cost

savings.

Weaknesses:

1. Infosys relies on USA for revenues which constitute a major weakness.

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.........

2. The fact that the salaries are rising in the Indian market is taking away the cost

advantage of Infosys and all Indian companies.

3. Reference to its Indian competition, and with $ 4 B in 2008, Infosys global

competitors are widely bigger relating to the global Market, Stating for example

Hewlett Packard HP ($91 B), IBM ($ 91 B), EDS ($21) and Accenture

($18billion).

4. Infosys has low research spending especially compared to global IT companies

(only 1.3 % of total revenues)

5. Low expertise in high end services like Consultancy and KPO.

Opportunities:

1. If Infosys gets the project offered by PFS, and if they were performing as

expected, then PFS will offer Infosys more and more end-to-end projects.

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2. Since Infosys increased the focus on high end work like consulting there’s an

opportunity to improve this section.

3. Infosys is cash rich (Around US $ 1 Billion), this will help Infosys on

acquiring companies in order to improve their skills in the Consultancy

section.

4. Domestic demand for IT services is to grow at 20% which means Infosys will

have the opportunity to grow in the Indian Market and thus its reliance on the

US market will decrease.

5. Infosys knows that its reliance on the US market is not a good strategy for the

future therefore they started to take steps to break into geographic sectors

including Japan, Germany, and France.

6. There is a new and emerging market in China as the country undergoes a huge

industrial revolution.

7. Infosys is planning on opening offices in cost advantage countries for example

Latin America and Eastern Europe.

8. Infosys plans on having new alliances in the future such as Microsoft.

Threats:

1. A potential new entrant might affect the whole calculation of Infosys. Meaning

that Infosys has aimed many years to enter into PFS trustworthy chain and thus if

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.........a new unknown competitor will enter it might affect the whole Infosys Plan.

Especially that some are outsourcing now from China, Korea and different low

cost, high tech countries.

2. The increased competition in the market especially from foreign firms like

Accenture and IBM could affect the cost advantage.

3. The whole economic environment leading to rising wages and pricing pressure.

4. Since Infosys depends on a small number of big companies, the loss of one client

might affect Infosys dramatically.

5. Losing the bid might block the expansion made by Infosys throughout PFS with

65 projects.

6. When the dollar have valued against the rupee, although Infosys is able to

reimburse the cost difference however, it weakens the dollar for to minimize

outsourcing of Indian industries

BCG MATRIX OF INFOSYS IN USA

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High

Market

Growth

Low

High Low

Market Share

Figure 4: BCG Matrix of Infosys in USA.

Infosys BPO is an end-to-end outsourcing services provider. It is a global

company with 12 delivery centers across the Asia Pacific, Latin America, Europe

and India. Infosys BPO Limited (formerly Progeon Limited) is the BPO

(Business Process Outsourcing) subsidiary of Infosys Technologies Ltd.. Infosys

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Business Process Outsourcing

(BPO)

Consulting &Package

Implementation

Software Products& Maintenance

NONE

.........BPO closed FY 07-08 with revenue of $ 250.3 million with 11 centers worldwide

employing 16,295 employees and 44 clients.

Software Products and Maintenance: Infosys specialize in IBM software which

includes the brands Lotus, Web sphere, Tivoli, Rational and DB2 Information

Management.

Consulting and Package Implementation: Infosys is a market leader in

consultancy, implementation, support and application development services with

IBM software and middleware.

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PORTER’S FIVE FORCES MODEL (INDIAN IT INDUSTRY)

Figure 5: Porter’s Five Forces Model

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.........

Bargaining Power of Customers (Very high):

1. Large number of IT companies competing for the offered IT projects which surely

leads to high competition over projects .

2. Noticeable decrease in IT expenses.

Threat of Substitutes (Medium):

1. Companies located in other countries such as Eastern Europe, the Philippines and

China, are emerging which is a threat to Indian IT industry because of their cost-

advantage.

2. Price allocated for the product offered should be well studied since the quality in most

of the cases will be the same.

Bargaining power of supplier (Shifted from high to low):

1. Due to stagnation and the cutbacks.

2. Demand and supply of IT professionals is no longer that favorable to employees.

3. Availability of a vast number of talented and experienced suppliers.

Barriers to entry (Very Low):

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1. Low capital requirements.

2. Large value chain, which gives the opportunity for small enterprises to start a business

as well.

RIVALRY AMONG FIRMS (High):

1. Low-cost with little differentiation between offerings.

2. Rapid industry growth

3. Strong competitors (few numbers of large companies).

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ATTACHMENTS.

Exhibit 1.1:

Exhibit 1.2:

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Exhibit 1.3

ITO: Information Technology Outsourcing

BPO: Business Process Outsourcing

AMO: Application Maintenance/ Management Outsourcing

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REFERENCE

www.infosys.com

Pinto J, http://www.jimpinto.com/writings/infosys.html

Wiki, http://en.wikipedia.org/wiki/Capability_Maturity_Model

Wikinvest, http://www.wikinvest.com/stock/Infosys_Technologies

Business Standard, http://www.business-standard.com/india/news/infosys-foresees-competition-getting-stronge...

Infosys , http://www.infosys.com/about/who-we-are/Pages/index.aspx )The story of India’s 3 IT biggies –www.rediff.com

Maps of India http://business.mapsofindia.com/software-companies-india/infosys-technologies-ltd.html

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