Business Strategic

Management of Infosys

“Group F”:-
 Vision And Mission

» Vision:- “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 our clients, employees, vendors and
society at large."

 Values
» Infosys’ value system is best articulated by the acronym
C-Life – Customer Delight, Leadership by Example,
Integrity & Transparency, Fairness and Pursuit of
Excellence.
» The major objective of the company is to become India’s
most respected company.
» Infosys deliberately defocused on revenue and profits.
Their goal was to do everything by the book.
»


»
»
 Introduction to Infosys

ØInfosys Technologies Ltd. was started in 1981.

ØToday, it is a global leader in the "next generation" of IT and consulting.

ØInfosys defines, designs and delivers technology-enabled business solutions

that help Global 2000 companies win in a Flat World.

ØInfosys serves the client globally and is one of the pioneers in strategic
offshore outsourcing of software services
Ø
ØInfosys pioneered Global Delivery Model (GDM)
 Milestones Awards & Achievements


» In 1987 Infosys got its first foreign client.
»
» In 1993, Infosys became a public limited
company and received ISO 9001/Tick IT
certification.
» Infosys moved up to No. 14 on Fin Tech 100.
» Awarded the ‘India’s Best company to work
for’ in 2009.


»
» In 1999, Infosys crossed $100 Million and was » Infosys was honored with the Sharpening
listed on NASDAQ. Brand and Competitive Differentiation
»
Marketing Excellence Award from the
» In 2006, Infosys completed 25 years of its
existence and its revenues crossed $ 2 Information Technology Services
billion. Marketing Association (ITSMA)


» Today Infosys has more than 1,03,078 » A leader in SAP implementation services.
employees and has presence in more than 20 
countries across the world.
»
 Infosys - Business Lines
Insurance Banking Communicati Energy, Retails, ManuNew India Business
Healthcareand on Media and utilities Consumer factu Markets Unit
and Life capital Entertainmentand Goods and ring and
Sciences Markets Services Logistics Services

Consulting Solutions (CS)

Enterprise Solutions (ES)
Product Engineering and Validation Services (PEVS) – PED, PLES, IVS
Infrastructure Management Services (IMS)
Software Engineering and Technology Labs (SETLabs)
System Integration Services (SI)
Corporate Sales and Marketing (CSM)
 Financial Growth

Revenue Break up as per Services offered in 2009

Industry Segmentation Performance

Source: Annual Report Infosys, 2009

 S.W.O.T. Analysis
Strengths Weaknesses
 
» Cost advantage – Presence of » Excessive dependence on USA for
Infosys in India is key to its revenues – US Companies are
cutting down IT budget hence
success
revenues to be hit hard for
» Breadth of service offering – end Infosys
to end solutions including high » Excessive dependence on BFSI
end services like IT consultancy sector for revenues – Banking
and KPO sector is facing a crisis globally
» Quality and maturity of process – and is going to spend less on IT
Infosys has quality standards » High rates of attrition – Although
such as CMM Level 5i to slowdown in global economy has
differentiate from other lowered attrition rate but the
competitors industry still faces high attrition
rates as compared to other
» Global and 24/7 delivery capability sectors
– excellent internet backbone » Decreasing competitive advantage
and telecommunications – rising salary expenses is taking
facilities enabling companies to away the cost advantage enjoyed
develop 24/7 delivery by Indian companies (including
capabilities from India itself Infosys).
 S.W.O.T. Analysis
 Opportunities  Threats
» Greater scope for product » Global economic slowdown may
innovation continue for several years –
» Increased focus on high end work hence low IT spending globally
like consulting and KPO » US Govt. against outsourcing
» Domestic demand for IT services is » Shrinking margins due to rising
to grow at 20 % wage inflation
» Greater scope to service domains » Rupee-dollar movement affects
other than BFSI such as revenue and hence margins
Transportation, Infrastructure, » Increased competition from foreign
etc. firms like Accenture, IBM etc.
» Satyam fiasco – Likely to have »
positive impact on business » Increased competition from low-
considering corporate wage countries like China,
governance, possibility of Indonesia etc.
shifting of business, getting »
higher incremental business from
overlapped clients, and winning
new business from new clients



 Porters Five Forces Model

Threat of Substitutes:
1.Other offshore locations – Low Cost Locations like Eastern Europe, Philippines and China.
2.Price quoted is the biggest Differentiator.

Bargaining Power of Customers:

Rivalry among Firms:
g Power of Supplier: 1.Low Cost 1.Large Number of IT Companies vying for projects – High Co
low Down, Job Cuts, layoff & bleak IT outlook2.Commoditized2.Huge
offeringDecline in IT Expenditure
Supply is not favorable to employees 3.High Industry growth
lity of vast pool of talent.

Barriers to Entry:
1.Low Capital Requirements
2.Large value chain for small enterprises
3.MNCs are ramping up capacity and employee strength
 BCG Matrix – Infosys (India)
HI
G
H Maintenance
Software Products
Business Package Implementation
Growth
Rate
L
O
W NONE
Consulting, BPO,
KPO
HIGH LOW

Market Share
 McKinsey’s 7 S Model
Style - LEADERSHIP
“Infosys Leadership Institute”
Open door policy.
Continuous sharing of information.
Takes inputs from employees in decision making.
Builds personal rapport with employees.
Staff – HUMAN RESOURCES
“Knowledge Based Industry” (90% are engineers)
Emphasis on academic records
Technical skills
Ability to learn
2.65 per cent of its revenues on up gradation of
employees‟ skills
High training standards
 McKinsey’s 7 S Model
Strategy


» Client focused strategy (custom built soft wares)

» Quality driven model.
» Strong Engagements with existing clients.
» Value added services to new clients.
» Geographical Expansion.
» Enhanced Solution Set.
» Consulting.
» Business Process Management.
» Systems Integration.
» Infrastructure Management.
» Deep Industry Knowledge.
» Brand Visibility.
» Pursue alliances and strategic acquisitions .
»

 McKinsey’s 7 S Model
 Shared Values
» Customer Delight
» Leadership by Example
» Integrity and Transparency
» Fairness
» Pursuit of Excellence
Organizational Structure

» Free Form
» Flexible Team Structure
 e.g. A member, who might have been team leader in one project, may be replaced
by another member of the same team for another project.
» Equality among employees

 McKinsey’s 7 S Model
 Skills


» Domain specific Certifications

» Competency Building
»
Infosys has been CMM-Level 5 certified for its process capabilities.

It has entered the Balanced Scorecard Hall of Fame for Executing
Strategy for achieving breakthrough performance results using the

Balanced Scorecard (BSC).

Strategy Analysis - Infosys
 Infosys- Corporate Level Strategy

» Global Delivery Model: Producing where it is most cost effective and selling where
it is most profitable.
» Moving UP the value chain: Getting involved in a software development project at
the earliest stage of the life cycle.
» PSPD Model: “Predictability of Revenues, sustainability of revenues, Profitability,
De-Risking” for Risk Management.
» Actions Taken
» Expansion into low cost countries like Mauritius, Philippines, Thailand,
Mexico etc.
» Improved Quality capabilities -> CMM Level 5i
» Emphasis on delivering high value services
» Currency hedging for predictability of revenues.
» Investing heavily in training centers.
»
 Infosys – Generic Strategy
» Low cost Global delivery 24/7 Model
»
» Little differentiation in low-end services of value chain; high differentiation in high
end services in value chain like software products and package solutions.
»
» Focus on Quality, Customer relationship management, timely delivery.
 Infosys – Grand Strategies
» Ansoff’s matrix


Current Market New Market

Current Product Market Penetration Market
Strategy Development
New Product Product Strategy
Diversification
Development Strategy
Strategy
 Market Penetration Strategy
» Current Markets: USA and Europe
» Current Products: BPO, KPO, consultancy services (in BFSI,
manufacturing and retail) and software products (financial
products).
» Recommendation: As most large clients in US and Europe are
cutting costs, Infosys needs to be more aggressive on cost and
quality front.
» Result of strategy: Unlikely to yield good results.
 Market Development Strategy
» New Market: India, Middle-east and Australia
» Current Product: ADM, BPO, KPO, consultancy services
(in BFSI, manufacturing and retail) and software products
(financial products).
» Recommendation: Since these are fast developing IT
market, Infosys needs a paradigm shift in focus from US
and EU markets to new markets.
» Result of strategy: Likely to yield good result.
 Product Development Strategy
» Current Market: USA and Europe
» New Product: Consultancy and package implementation services
in relatively growing sectors esp. healthcare, life sciences and
aviation sector, and KPO services.
» Recommendation: Concentrate on building expertise in these
domains by strategic acquisitions.
» Result of Strategy: Likely to have good result. (better the
company acquired, the better the result).
 Diversification Strategy
» New Market: India, Middle-east and Australia
» New product: Consultancy and package implementation services
in relatively growing sectors esp. healthcare, life sciences and
aviation sector, and KPO services.
» Recommendation: Changing Brand image from low value
service provider to high value service provider.
» Result of Strategy: Difficult to achieve overnight (possible in
long term)
 Other Strategies
» CONCENTRATION: 90% of Infosys revenues from American and European
nations.


» VERTICAL INTEGRATION: Infosys recently made a bid to acquire a

European major – Axon consultancy to improve its business in European
markets, but finally called off the deal due to high valuation. Otherwise,
Infosys has always believed in organic growth.


» INNOVATION: The Software Engineering and Technology Labs (SETLabs)

at Infosys is the centre for applied technology research in software
engineering and enterprise technology.
 SETLabs conducted 24 Innovation Workshops with customers from the US
and Australia, to identify research collaboration possibilities. Infosys
promotes a favourable work environment that encourages innovation and
meritocracy.
Future Strategies
 Future Strategies Contd..
» Global sourcing strategy is aligned with business strategy
» Enhancing operational efficiency and delivering value added
services.
» Structuring processes and services into modules thus leading to
enhanced flexibility and productivity.
» Aggressive focus on ERP solutions like Oracle and SAP.
» Expand into high end consulting.
 Lessons to Draw
» Do not put all eggs in one basket.
» Provide more high end services in value chain (3rd wave IT)
» Shift in focus from low cost advantage to high quality services.
» Consolidation and Strategic acquisitions are essential for future
growth of revenues.
» Quick adoption to high growth markets is necessary.
 Thank you