Infosys Nilu

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.aspx


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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


Reported Net Profit (in Rs. crore)

Reported Net Profit


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Ratio Analysis:


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:

Documents

Infosys Nilu