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 crossborder 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.