MANAGEMENT CONTROL SYSTEMS

ASSIGNMENT 6:
INFOSYS’ GLOBAL DELIVERY MODEL

Submitted to:
Prof. Kanchan M

Submitted by:
Ankit Varliani (08BSHYD0113)

Ankur Maurya(OSBYHYD0124)

ArpitaJaitly (08BSHYD0147)

AsthaAgarwal (08BSHYD0161)

Belinda Rosario (08BSHYD0174)

Bhaval Kumar (08BSHYD0178)

Bithika Sinha (08BSHYD0185)

Date of submission: July 22, 2009

The case “Infosys’ Global Delivery Model” examines the global delivery model
(GDM) of the leading India based software company - Infosys Technologies. Infosys
used GDM as a strategic outsourcing tool and by using it; the company
could take the work to the place where it could be best performed at
lowest cost with minimum risk. GDM provided a superior value
proposition at higher quality and lower cost. The major chunk of Infosys’
revenues was derived from GDM based application services. The company
enhanced its GDM capabilities by applying it to new services and adding in new
global delivery locations.

GLOBAL DELIVERY MODEL (GDM)

The salient features of GDM are outlined below:

• The large scale software development projects were divided into 3

categories:
➢ The first category included tasks that were to be carried out at the
location of the client.
➢ The second category included tasks that needed to be carried out closer
to the client.
➢ The third category consisted of tasks that could be done in remote
locations, where process-driven technology centers with highly skilled
manpower were easily available.
• The project work was carried out with teams located at different locations
across the world working round-the-clock on the project.
• Infosys used two types of Global Development Centers (GDCs) – Proximity
Development Centers (PDCs) and Offshore Development Centers
(ODCs) to carry out the activities related to software development.
• The major components of GDM included – knowledge capture, daily handoffs,
quality control, continuous improvement, mobilizing and demobilizing staff as
required, recruiting and training the right kind of people, billing for cross-
border teams and connectivity of the locations.
• Infosys developed People Knowledge Map which had contact information
of the individuals who were expert in specific areas so that people working
on a particular project could contact them in need.
• Infosys benchmarked its IT services against international quality standards
like ISO 9000, CMM and the Malcolm Baldrige framework.
IMPLEMENTATION OF GDM MODEL

Infosys used the services of several service providers along with a mix of satellite
and fiber optic links with facilities for alternate routing. Video conferencing was
used for executive level discussions and training.

As a part of expansion, Infosys launched GDM Plus, an enhanced service delivery

model, a combination of more services and excellence in execution. GDM Plus was
Infosys’ strategic response to changing market conditions and the competitive
landscape to deliver high volumes to customers. Execution excellence was to be
achieved through business solutions, technology, domain expertise, quality,
operational efficiency and people development.

ADVANTAGES FROM GDM

 Rapid growth in revenues

 Lower risks
 Talented workforce
 Best results
 Flexibility
 Round the clock productivity
 Faster response
 Shorter lead time
 Cost benefits

RESULTS AFTER THE IMPLEMENTATION OF GDM

• Infosys’ revenues grew four-fold in the past four years and it also continued
attracting a pool of high quality talented professional.
• In 2005-06, Infosys derived more than 40% of its revenues through new GDM
based services like package implementation, independent validation,
business process management, infrastructure management and systems
integration
 • The benefits to clients included 35% reduction in cost and 75% reductions in
time to market for various products across various geographical regions.

CHALLENGES

• MNCs like Accenture, IBM Global Services, and Electronic Data Systems have
started operating from India and began offering the same offshore rates as
Indian companies.
• The entry of multinationals has put pressure on Infosys in terms of retaining
talented manpower.
• Infosys faced stiff competition from other Indian IT companies which were
adopting new structures.
• Infosys and its GDM were heavily dependent on US-based companies. Since
the IT spending of the US companies was decreasing and was expected to
reduce further, it could put Infosys in a tight spot.
• Infosys also faced growing competition from countries like China and the
Philippines which were offering lower wages and more facilities.

RECOMMENDATIONS

• Infosys has the first mover advantage in the domain but in order to retain the
skilled employees under highly competitive scenario it need to come up with
some schemes for the employees. It could hike the salaries or increase the
perks that it has been offering so far.
• As Infosys was a pioneer with the GDM model, they have already gained an
expertise on this front and can try discovering newer horizons and think of
newer services that can be provided to the existing and prospective
customers. As the competitors are still trying to build their model from
scratch, it will take them time to acquire skills to the GDM model as well as to
compete with the newer services that Infosys would offer in the consequent
time period.