A PROJECT REPORT

ON
I.T. SECTOR

BY
B4 GROUP
 INDEX
Sr.No. Contents Pg.No
1 INTRODUCTION 3
2 MARKET STRUCTURE 4
3 MAJOR PLAYERS 12
4 LEGAL ASPECTS AND POLICIES 13
5 CURRENT ISSUES 17
6 CAREER PROSPECT 17
7 MICRO ANALYSIS- INFOSYS 18
8 MILESTONES 20
9 7P’s 21
10 SWOT 25
11 KEY PERSONNEL 27
12 FINANCIAL FIGURES 29
13 HR PRACTICES 30
14 CSR 31
15 FUTURE PLANS 32
16 SIGNIFICANT EVENTS 32
17 SUGGESTIONS AND CONCLUSIONS 33
18 REFERENCES 33

2
 INTRODUCTION
INFORMATION TECHNOLOGY (IT), as defined by the Information Technology
Association of America (ITAA), is "The study, design, development, implementation,
support or management of computer-based information systems, particularly software
applications and computer hardware." IT deals with the use of electronic computers
and computer software to convert, store, protect process, transmit, and securely
retrieve information.

When computer and communications technologies are combined, the result is

information technology, or "INFOTECH". Information Technology (IT) is a general term
that describes any technology that helps to produce, manipulate, store, communicate,
and/or disseminate information.

Today, the term information technology has ballooned to encompass many

aspects of computing and technology. IT professionals perform a variety of duties that
range from installing applications to designing complex computer networks and
information databases. A few of the duties that IT professionals perform may include
data management, networking, engineering computer hardware, database and
software design, as well as the management and administration of entire systems.

Owing to its easy accessibility and the wide range of IT products available, the
demand for IT services has increased substantially over the years. The IT sector has
emerged as a major global source of both growth and employment.

ROLE OF IT INDUSTRY

The IT industry can serve as a medium of e-governance, as it assures easy

accessibility to information. The use of information technology in the service sector
improves operational efficiency and adds to transparency. It also serves as a medium
of skill formation.

• Economies of scale for the information technology industry are high. The
marginal cost of each unit of additional software or hardware is insignificant compared
to the value addition that results from it.
• Unlike other common industries, the IT industry is knowledge-based.
• Efficient utilization of skilled labor forces in the IT sector can help an
economy achieve a rapid pace of economic growth.
• The IT industry helps many other sectors in the growth process of the
economy including the services and manufacturing sectors.

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 MARKET STRUCTURE
GLOBAL & INDIAN SCENARIO:
Global Sourcing Trends

• The fundamental contribution of information technology is the expansion of

knowledge, which is necessarily accompanied by a reduction in uncertainty. This
becomes relevant for market structure in several ways.

• IDC estimates that in 2008, the worldwide IT market growth will be lower at about
5.5-6.0 per cent, mainly due to the economic slowdown in the US and elsewhere.
• IT-BPO services grew at an above-sector-average rate of nearly 8 per cent and
remained the largest category, accounting for an increasing share of the
worldwide technology sector revenue aggregate.
• Outsourcing continued to be the primary growth driver, sustained by gradual
shifts in regional spending patterns – with increasing traction in Europe and Asia
Pacific offsetting a marginal decline in share of the Americas. IT spending in the
BRIC countries - Brazil, Russia, India, and China – is expected to grow by 16 per
cent in 2008, reaching USD 115 billion. Other emerging economies (based on
10%+ growth rates and the greatest net-new IT spending potential in the next
four years) include Mexico, Poland and Turkey, followed by Vietnam, Thailand,
Saudi Arabia, Argentina, Colombia, and United Arab Emirates.
• Green IT is expected to be an important highlight during 2008. According to the
Green IT Survey conducted by IDC, over 50 per cent consider suppliers’
greenness when buying IT, almost 80 per cent think the importance of greenness
as an IT buying consideration is growing, and over one-third have policies that
favor green vendors. 2008 will see the introduction of green products (energy-
efficient, space-efficient, materials efficient, regulatory-compliant) that will create
meaningful differentiation and move market share.

4
IT-BPO Sector-Overview

ILLUSTRATION:

• Indian IT-BPO grew by 33 per cent in FY2008 to reach USD 64 billion in

aggregate revenue, thus revalidating its strong fundamentals, despite concerns
of a slowing US economy and supply constraints.
• Of this, the Software and Services segment accounted for USD 52 billion,
growing by 28 per cent (currency-adjusted) over FY2007.
• IT-BPO exports (including hardware exports) reached USD 40.9 billion in FY2008
as against USD 31.8 billion in FY2007, a growth of 28 per cent.
• Software and services exports (includes exports of IT services, BPO,
Engineering Services and R&D and Software products) reached USD 40.4
billion, contributing nearly 63 per cent to the overall IT-BPO revenue aggregate.
• While the US (61 per cent) and the UK (18 per cent) remained the largest IT-
BPO export markets in FY2007, the industry footprint was steadily expanding to

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 other geographies - with exports to Continental Europe in particular growing at a
CAGR of more than 55 per cent over FY2004-2007.
• The industry’s vertical market exposure was well diversified across several
mature and emerging sectors. Banking, Financial Services and Insurance (BFSI)
remained the largest vertical market for Indian IT-BPO exports, followed by High-
technology and Telecom. These sectors together accounted for nearly 60 per
cent of the Indian IT-BPO exports in FY2007.
• Manufacturing, Retail, Media, Healthcare, Airlines and Transportation, and
Utilities were the other key segments.
• Domestic IT market (including hardware) reached 23.1 billion in FY2008 as
against USD 16.2 billion in FY2007, a growth of 43 per cent. Hardware remained
the largest segment of the domestic market with a growth rate of 44 per cent in
FY2008. Software and services spending supported by increasing adoption, grew
by over 41 per cent during the year.
• As a proportion of national GDP, the Indian technology sector revenue has grown
from 1.2 per cent in FY1998 to an estimated 5.5 per cent in FY2008. Net value-
added by this sector, to the economy, was estimated at 3.3-3.9 per cent for
FY2008.
• Direct employment in Indian IT-BPO crossed the 2 million mark, an increase of
about 389,000 professionals over FY2007; indirect job creation is estimated at
about 8-9 million.
• IT services (incl. engineering services, R&D, Software products) exports, BPO
exports and Domestic IT industry provides direct employment to 860,000,
700,000 and 450,000 professionals respectively.

IT SERVICES, ENGINEERING SERVICES, R&D AND SOFTWARE

PRODUCTS

IT Services involves a full range of engagement types that include consulting,

systems integration, IT outsourcing/managed services/hosting services, training and
support/maintenance.

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 • IT services (excluding BPO, Engineering Services, R&D and Software products),
contributing to 57 per cent of the total software and services exports, remains the
dominant segment and crossed USD 23 billion, a growth of 28 per cent in
FY2008.
• The segment is witnessing a noticeable shift from projects towards multi-year
outsourcing-based relationships; remote infrastructure management is emerging
as a key growth driver.

Future Outlook:

• With small and midsized businesses driven by the increased use of technology
the country's information and communication technology market is estimated to
grow 20.3 per cent annually to reach US$ 24.3 billion by 2011.
• A survey carried out to assist business heads of major outsourcers to identify
reliable, innovative and tech savvy firms had listed twenty-nine India based
companies amongst the best 100 IT service providers including Tata
Consultancy Services, HCL Technologies, Genpact, and WNS Global Services
amongst others.

According to the global InfoTech analyst International Data Corporation, the Indian IT
and ITeS market is estimated to grow at the rate of over 16 per cent to become a US$
132 billion industry, significantly, the domestic market alone is expected to become over
US$ 50 billion, with a CAGR of about 18.4 per cent. Simultaneously, the IT and ITeS
exports are estimated to more than double to US$ 78.62 billion in 2012.

• Sufficient demand, strong fundamentals and a favorable environment support a

positive outlook for Indian IT-BPO exports as well as the domestic market, going
forward. The Indian IT-BPO industry is on track to reach USD 60 billion in exports
and USD 73-75 billion in overall software and services revenue, by 2010. At the
aspired levels of growth, the sector would, by 2010, employ around 2.5-3 million

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 professionals, directly, account for direct investment of about USD 10-15 billion,
and contribute 7-8 per cent of the national GDP.
• However, the scope of the opportunity is significantly larger. At USD 52 billion
(excluding hardware), India accounts for around 4 per cent of the worldwide
spend on IT software and services. The global sourcing penetration is estimated
to be growing at nearly four times the rate of absolute technology spends.
Together, these two trends signify a huge opportunity for the Indian IT-BPO
industry.
• In order to sustain India’s edge in the global markets and improve revenues,
Indian IT-BPO service providers need to shift towards more market-facing
breakthroughs. They could additionally, foray new customer segments in
intellectual asset-intensive service lines like engineering and R&D services,
creating IP in emerging technology areas, developing and codifying specific
domain expertise to target consulting and system integration services, technical
innovations to develop their own standards for next generation of technologies.

• Finally, providers could enhance the role they are already playing in helping
improve the quality of education, by working closely with the Government and
academia to facilitate changes in the curriculum and pedagogy, which directly
influence the quality of graduate output.

Why India?
Inspired by the Indian IT-ITES success story, several other locations have been
presented as alternate options for offshore outsourcing. However, feedback received
from several MNCs having multi-country operations as well as syndicated analyses
comparing the various sourcing locations has revealed that India continues to offer and
deliver the best ‘bundle’ of benefits sought from global sourcing.

With significant potential still untapped, it is expected that the global sourcing
phenomenon will continue to expand in scope, scale and geographic coverage. As
global delivery matures, multi-location strategies will become the norm and most
sourcing destinations, including emerging locations, will grow in size. Building on its
existing strengths, India will remain the leading destination and will continue to play an
important role in most global sourcing strategies.

Strengths

Large Human Resource

Every year, approximately 19 million students are enrolled in high schools and 10
million students in pre-graduate degree courses across India. Moreover, 2.1 million
graduates and 0.3 million post-graduates pass out of India's non-engineering colleges.
While 2.5-3 percent of them find jobs in other fields or pursue further studies abroad, the

8
rest opt for employment in the IT industry. If the flow from high schools to graduate
courses increases even marginally, there will be a massive increase in the number of
skilled workers available to the industry. Even at current rates, there will approximately
be 17 million people available to the IT industry by 2008.

Indian Education System

The Indian education system places strong emphasis on mathematics and

science, resulting in a large number of science and engineering graduates. Mastery
over quantitative concepts coupled with English proficiency has resulted in a skill set
that has enabled the country to take advantage of the current international demand for
IT.

Quality Manpower

Indian programmers are known for their strong technical skills and their
eagerness to accommodate clients. In some cases, clients outsource work to get
access to more specialized engineering talent, particularly in the area of
telecommunications. India also has one of the largest pools of English-speaking
professionals.

Strengths at a Glance

• Great history in software

development
• English Language proficiency
• Government Support and policies
• Cost advantage
• Strong tertiary education
• Process quality focus
• Skilled workforce
• Expertise in new technologies
• Entrepreneurship
• Reasonable technical innovations
• Reverse brain drain
• Existing long term relationships
• Creation of global brands
• BPO & Call center offerings
• Expansion of existing
relationships
• Chinese domestic & export
market
• Leverage relationships in West to
access overseas markets
• Indian domestic-market growth

9
Infrastructure Tech Parks

The Indian software industry has made its mark in the new world economic order
and is today enjoying the benefits of world class infrastructure being created by leading
corporates to augment the growth of the Indian Industry. The last five years has seen a
tremendous growth in Tech Parks that are geared to meet the requirements of the
knowledge industry. Located in key IT and ITES markets like Chennai, Bangalore and
Gurgaon, these parks offer Silicon Valley type infrastructure ...right here in India. Multi-
tenanted intelligent buildings, buit-to-suit facilities, large sprawling campuses...the
choices are tailor made to customer requirements.

Quality

The quality practices in the Indian IT industry have evolved through three distinct
stages. The emphasis on quality is just as predominant in the ITES-BPO industry. Most
Indian ITES-BPO companies adhere to world class quality standards, have a dedicated
quality department responsible for developing and deploying the organization’s quality
policies and undertake periodic reviews of their quality processes – which are
conducted by their own senior management team as well as members from the client
organizations.

Today, a majority of the companies in India have already aligned their internal
processes and practices to international standards such as ISO, CMM, Six Sigma, etc.,
which has helped establish India as a credible sourcing destination. As of December
2005, over 400 Indian companies had acquired quality certifications with 82 companies
certified at SEI CMM Level 5 – higher than any other country in the world.

Competitive Cost

The past few years have witnessed steady evolution in the ecosystem for global
sourcing of IT-ITES. Outsourcers have graduated to basing their decisions on a larger
set of factors such as service level maturity, scalability and sustainability, infrastructure
availability and a favorable business environment – in addition to the financial benefits
achievable from global sourcing. In parallel, global sourcing has been adapted to a
combination of near-shore and offshore models that allow companies to maximize their
gains.

India has successfully leveraged its fundamental advantages of abundant talent,

a keen focus on quality and low costs coupled with an enabling business environment to
attain the leadership position in this space. This is reflected in India’s dominant and

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growing share of the global IT-ITES pie. India’s leadership is also reflected in the strong
preference shown by customers for sourcing various services from the country. India
remains the most preferred offshore location for sourcing a broad range of business
services.

IT INDUSTRY IN INDIA

The Indian information technology sector has been instrumental in driving the
nation's economy onto the rapid growth curve. According to the Nasscom-Deloitte
study, the IT/ITES industry's contribution to the country's GDP has increased to a share
of 5.2 per cent in 2007, as against 1.2 per cent in 1998.

Further, the IT and BPO industries are poised to clock revenues worth US$ 64
billion by the end of fiscal year 2008, registering a growth of 33 per cent with exports
expected to cross US$ 40 billion and the domestic market estimated to clock over US$
23 billion, according to a study. Simultaneously, the Indian IT services market is
estimated to remain the fastest growing in the Asia Pacific region with a CAGR of 18.6
per cent, as per a study by Springboard Research.

India's IT growth in the world is primarily dominated by IT software and services

such as Custom Application Development and Maintenance (CADM), System
Integration, IT Consulting, Application Management, Infrastructure Management
Services, Software testing, Service-oriented architecture and Web services.

A report by the Electronics and Software Export Promotion Council (ESC)

estimates software exports to register a 33 per cent growth in the current financial year
with export figures during FY 2008 expected to reach US$ 45 billion. The country's IT
exports have, in fact, come quite far, starting from a few million dollars in the early
1990s. The Government expects the exports turnover to touch US$ 80 billion by 2011,
growing at an annual rate of 30 per cent per annum.

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 MAJOR PLAYERS IN INDIA
RANK RANK Revenue (Rs crore) Growth (%)
COMPANY CEO/COUNTRY HEAD 06-07 06-07
06-07 07-08 06-07 07-08

1 1 TCS S Ramadorai 17,560 21,465 34 22

Suresh Vaswani/Girish
2 2 Wipro 13,252 16,884 41 27
Paranjpe

3 3 Infosys Technologies S Gopalakrishnan 13,240 15,758 45 19

4 4 Hewlett-Packard India Neelam Dhawan 11,917 15,454 37 30

5 5 IBM India Shanker Annaswamy 8,245 10,179 52 23

6 6 Ingram Micro K Jaishankar 6,896 8,620 25 25

Satyam Computer
7 7 Ramalinga Raju 6,111 7,889 34 29
Services
Cognizant Technology
11 8 Francisco D Souza 4,584 6,310 83 38
Solutions
PS Neogi/EH Kasturi
8 9 Redington India 5,023 6,280 23 25
Rangan

9 10 HCL Technologies Vineet Nayar 4,930 6,200 39 26

12 11 Cisco Systems Naresh Wadhwa 4,424 5,837 30 32

10 12 Oracle India Krishan Dhawan 4,753 5,808 52 22

15 13 HCL Infosystems Ajai Chowdhry 3,522 5,058 32 44

14 14 Intel Praveen Vishaknantaiah 3,760 4,310 14 15

NEW 15 Accenture Harsh Mangalik NEW 3,800 NEW NEW

16 16 Tech Mahindra Vineet Nayar 2,900 3,636 133 25

18 17 Microsoft India Ravi Venkatesan 2,580 3,263 26 26

24 18 SAP India Ranjan Das 1,774 3,260 33 84

21 19 Dell India Sameer Garde 2,000 3,200 66 60

19 20 Lenovo India Amar Babu 2,562 3,014 35 18

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 LEGAL ASPECTS AND POLICIES

IT Act 2000:
The arrival of the Internet and the World Wide Web made it possible for people to
communicate and transact over cyber space. It was a revolutionary step for humanity,
but it also created a significant need for the regulation and governance of these
activities, a requirement that lead to the creation and implementation of cyber laws
across the globe. India became the 12th nation in the world to adopt a cyber law during
2000.
• From the perspective of e-commerce in India, the IT Act 2000 and its provisions
contain many positive aspects. Firstly, the implications of these provisions for the
e-businesses would be that email would now be a valid and legal form of
communication in our country that can be duly produced and approved in a court
of law.
• Companies shall now be able to carry out electronic commerce using the legal
infrastructure provided by the Act.
• Digital signatures have been given legal validity and sanction in the Act.
• The Act throws open the doors for the entry of corporate companies in the
business of being Certifying Authorities for issuing Digital Signatures Certificates.
• The Act now allows Government to issue notification on the web thus heralding
e-governance.
• The Act enables the companies to file any form, application or any other
document with any office, authority, body or agency owned or controlled by the
appropriate Government in electronic form by means of such electronic form as
may be prescribed by the appropriate Government.
• The IT Act also addresses the important issues of security, which are so critical
to the success of electronic transactions. The Act has given a legal definition to
the concept of secure digital signatures that would be required to have been
passed through a system of a security procedure, as stipulated by the
Government at a later date.
• Under the IT Act, 2000, it shall now be possible for corporates to have a statutory
remedy in case if anyone breaks into their computer systems or network and
causes damages or copies data. The remedy provided by the Act is in the form of
monetary damages, not exceeding Rs. 1 crore.

Indian Copyright Act:

The copyright of computer software is protected under the provisions of Indian
Copyright Act 1957. Major changes to Indian Copyright Law were introduced in 1994
and came into effect from 10 May 1995. Copyright Act clearly explained:
• The rights of a copyright holder

13
 • Position on rentals of software
• The rights of the user to make backup copies
• Most importantly the amendments imposed heavy punishment and fines for
infringement of copyright of software.

Finance Act, 2006

It has laid amendments regarding Tax rates(To be paid by both, corporate and non
corporate assessee), FBT, Income Tax paid in foreign countries, Minimum Alternate
Tax MAT, TDS/TCS.

Indian Copyright Act

As per the provision in Indian Copyright Act, 1957 and as amended in 1994 / 95, any
person who knowingly makes use on a computer of an infringing copy of computer
programme shall be punishable with imprisonment for a term which shall not be less
than 7 days but which may exceed to 3 years and with fine which shall not be less than
Rs. 50,000 but which may extend to 2 lakh rupees.

Special Economic Zones Act, 2005 & Special Economic Zones Rules,
2006

The Government of India had announced a SEZ scheme in April, 2000 with a
view to provide an internationally competitive environment for exports. The objectives of
SEZs include making available goods and services free of taxes and duties supported
by integrated infrastructure for export production, expeditious and single window
approval mechanism and a package of incentives to attract foreign and domestic
investments for promoting export-led growth.

In order to give a long term and stable policy framework with minimum regulatory
regime and to provide expeditious and single window clearance mechanism, the Special
Economic Zones Act, 2005 has been brought into effect along with the Special
Economic Zones Rules, 2006 from 10 February 2006.

Under the Act, SEZ could be set up either jointly or severally by the Central
Government, State Government, or any person (including a private or public limited
company, partnership or proprietorship):

• for manufacture of goods; or

• for rendering services; or
• for both manufacturing of goods and for rendering services; or
• as a Free Trade and Warehousing Zone.

14
The Act provides for certain fiscal incentives to developers of SEZ and units established
in SEZs.

Regarding implementation of the Special Economic Zone Act, 2005 and the
Special Economic Zone Rules, 2006, a Circular No 29/2006-Cus, dated December
27,2006, has been issued which clarifies that the procedure for procurement of goods
from Domestic Tariff Area to a SEZ Developer or a unit would be governed by the
provisions of Rule 30 of the SEZ Rules, 2006.

Income Tax
Deduction under sections 10A/ 10B of Income tax Act, 1961 (“IT Act”) in respect of
profits derived from export of computer software.

Following undertakings are eligible to claim deduction in respect of profits derived from
export of computer software under the provisions of sections 10A/ 10B of the IT Act:

• Existing units which commenced operations prior to April 1, 2000 and claimed
deduction under the provisions of erstwhile sections 10A/ 10B, can continue to
claim such deduction under the provisions of newly substituted sections 10A/
10B for the unexpired period of ten consecutive assessment years.

Deduction would continue to be available in case of corporate re-organisations by way

of amalgamation or demerger.

Depreciation on computers and computer software at 60 percent

As per the provisions of the IT Act, annual depreciation on computers and

computer software can be claimed at the rate of 60 percent of written down value at the
beginning of the relevant financial year for income tax purposes. Therefore, under the
written down value method, 84 percent of cost of computers and software can be
depreciated in first 2 years.

IT/ITES Policy of Maharashtra

• Setting up of an Empowered Committee and a Directorate of Information Technology
• Fiscal incentives including stamp duty and electricity duty exemptions, double FSI
(FAR) for units built in IT Parks.
• Permission for 24x7 working hours and relaxation of labor laws.
• Initiatives to strengthen human resources.

IT/ ITES in Maharashtra

Maharashtra accounts for more than 30 per cent of the country's software
exports, with over 1,200 units based in the state. The government is largely focusing on
providing infrastructure and fiscal incentives to IT units, IT in governance and

15
institutional framework for the sector. Major IT players present in the state include Tata
Consultancy Services, Infosys Technologies, Wipro, Patni Computers, i-Flex
Technologies, Veritas. The state is home to BPO centers of large national and
international players including LG, HSBC, Aviva, vCustomer and Xansa. To provide
impetus to the IT industry, the Government has set up several state-of-the-art IT parks.

The state’s strengths in the sector include:

• 40 per cent of India’s Internet users.
• 35 per cent of PC penetration in the country
• 169,000 trained technical personnel added to the manpower pool each year
• Development of a large number of IT parks in both the public and private sectors and
development of a knowledge corridor.

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 Current Issues

• HCL to close Axon deal by October 24, 2008

With Infosys Technologies refusal to revise the bid for Axon Group, HCL
technologies has emerged as the clear front runner in the bid for the largest
overseas buyout by an Indian IT company. Axon group has already accepted
HCL technologies Bid of 441 million pound. HCL will now submit a “Scheme of
Agreement on or before 24 October”.

• IBM puts India on cloud computing map

Global computing giant IBM on September 24, 2008 launched a "cloud
computing" centre in Bangalore, putting the country on the world map in an
emerging area that takes information technology one step closer to being a utility
service like electricity or water with users sharing a common set of hardware and
software and paying only what they use.

• TCS buys CITI’s India BPO arm for USD $ 505 mn.

CAREER PROSPECTS
In the year 2006-07, the industry hired approximately 3, 80,000 people. Out of
these, the ITeS sector hired 2,00,000 people and the rest were taken by IT sector. The
recruitment trends of some IT giants are given below:

TCS- 35,000
Infosys-30,000
Wipro-28,000
Satyam-20,000
Some of the areas of specialization in the IT Industry are-

Designing
Research and Development in Peripheral Integration
Product Quality Control and Reliability Testing
Computer Manufacturing
Maintenance Service
System Developing /Programming /Software Engineering
Networking
Application Programming
EDP/ E- Commerce
Enterprise Resource Planning (ERP)
Database Warehousing and Management
Operating jobs, Computer operators, Data Entry

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 Micro analysis

INTRODUCTION

Infosys Technologies Ltd. (NASDAQ: INFY) was started in 1981 by seven people
with US$ 250. Infosys was incorporated in 1981 as Infosys Consultants Private Limited,
as a private limited company under the Indian Companies Act, 1956. It changed its
name to Infosys Technologies Private Limited in April 1992 and to Infosys Technologies
Limited in June 1992, when it became a public limited company. Infosys completed its
initial public offering of equity shares in India in 1993 and its initial public offering of
ADSs in the United States in 1999. In July 2003, June 2005 and November 2006, it
completed sponsored secondary offerings of ADSs in the United States on behalf of its
shareholders. Today, INFY is global leader in the "next generation" of IT and consulting
with revenues of over US$ 4 billion.

Infosys defines designs and delivers technology-enabled business solutions that

help Global 2000 companies win in a Flat World. Infosys also provides a complete
range of services by leveraging our domain and business expertise and strategic
alliances with leading technology providers.

Infosys pioneered the Global Delivery Model (GDM), which emerged as a

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

18
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.

Infosys has a global footprint with over 40 offices and development centers in
India, China, Australia, the Czech Republic, Poland, the UK, Canada and Japan.
Infosys has over 91,000 employees. Infosys takes pride in building strategic long-term
client relationships. Over 97% of our revenues come from existing customers.

Photo: Infosys Co-founders

19
 MILESTONES

2008

• Infosys crosses revenues of US$ $ 4.18 billion. Employees grow to over 90,000+
• Reports Q4 revenue of US$ 1,142 million
• Infosys publishes its first ever sustainability report

2007

• Infosys crosses revenues of US$ 3 billion. Employees grow to over 70,000+

• Kris Gopalakrishnan, COO, takes over as CEO. Nandan M. Nilekani is appointed
Co-Chairman of the Board of Directors
• Opens new subsidiary in Latin America
• Reports Q2 revenue of over US$ 1billion

ACHIEVEMENTS

2008

• Infosys Annual Report 2008 wins LACP Platinum award

• Infosys wins Sears Holding Corporation’s Partners in Progress award for the
second consecutive year
• Infosys wins two Banker Technology Awards for its exceptional work in
wholesale and capital markets
• Infosys Technologies wins Eastman Chemical's Supplier Excellence Award for
the second consecutive year
• Infosys ranked No. 14 among the most respected companies in the world by
Reputation Institute’s Global Pulse 2008.

20
• Infosys received the 2007 Boeing Performance Excellence Award (BPEA) from
The Boeing Company for a 12-month gold-level performance.

7P’s

PLACES
Infosys is a consulting and IT services company with a global services footprint,

Infosys has 48 sales offices around the world of which 4 are in India and 44 are outside
India. The picture shows the countries in which infosys has its presence.

PRICE

21
Price of the softwares or the services that INFOSYS offers varies from customer to
customer.
It depends upon the nature of project, man hours required, complexities involved in
project.

PROMOTION
INFOSYS has become brand name over the years. It doesn’t employ any promotion
strategies for its brand building, since it provides software solutions to businesses & not
to independent customer.INFY, stresses on maintaining & developing customer
relationship. It has separate IBU named IMS (Infrastructure Management & Services

PRODUCT
1) INDUSTRIES

Aerospace & Defence, automotive, Banking & capital market, communication,

Consumer Packaged Goods, Discrete Manufacturing, Education, Energy, Healthcare,
High Technology, Hospitality and Leisure, Insurance, Life Sciences, Media and
Entertainment, Resources, Retail, Transportation Services.

2) IT SERVICES

Application Services, Architecture Services, Independent Validation Services,

Information Management Services, Infrastructure Services, Packaged Application,
Services, Systems Integration Services

3) ENGINEERING SERVICES

Product Engineering, Process Engineering and Plant Operations, Lifecycle

Management

4) BPO SERVICES

FINACLE
Finacle® Universal Banking Solution

Finacle® from Infosys provides a holistic and integrated transformation approach,

complete with solutions and services. Our proven and effective framework for multi-
disciplinary change enables banks to shift their strategic and operational priorities.
Finacle® addresses the core banking, e-banking, Islamic banking, treasury, wealth
management and CRM requirements of retail, corporate and global banks.

22
 Finacle’s robust features make it one of the most comprehensive, flexible and scalable
universal banking solutions. Combined with our services, Finacle maximizes growth
opportunities while minimizing the risks associated with large-scale business
transformation.

Finacle® is the preferred solution of over 106 banks across 60 countries including the
U.S., U.K., U.A.E., China, Taiwan, Hong Kong, Saudi Arabia, Maldives, Mauritius,
Nepal, Nigeria, Indonesia, Singapore, Uganda, Sri Lanka, Tanzania, Zimbabwe,
Thailand, Philippines, Jamaica, India and the British Overseas Territory of Cayman
Islands.

PEOPLE
• 32.4% of Infosys employees are women
• Acquired global talent from over 70 nationalities
• 9,64,205 person days of technical training for entry level employees

PROCESS
In IT industry, the process varies according to the nature of services provided to
the customer.

PHYSICAL EVIDENCE

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 Infosys has got a very huge and state-of-art buildings spread across lush green
land. Its Mysore campus, which is a training centre for fresh recruits, is awesome.
Almost all the Infosys campuses are well-equipped with latest gym machinery,
swimming pool, table tennis table,etc. which acts as a stress buster for its employees.
All this, along with well-maintained gardens around, make Infosys a very pleasant place
to work in. People take pride in explaining their work culture to others when it comes to
Infosys.

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SWOT ANALYSIS

STRENGTHS
Leadership in sophisticated solutions that enable clients to optimize the efficiency
of their business:
The company bring together expertise in consulting, IT services and business process
outsourcing to create solutions that allow clients to increase their customer loyalty through
faster innovation, restructure their cost base, and help them achieve greater success
through shifting business cycles. expertise helps our clients improve their own
efficiencies, create better value for their end customers and become more competitive.
Are able to capture a greater share of our clients’ technology budgets.

Proven global delivery model:

Highly evolved Global Delivery Model represents a key competitive advantage. Over the
past decade, they have developed our onsite and offshore execution capabilities to
deliver high quality and scalable services. In doing so, infosys have made substantial
investments in processes, infrastructure and systems, and have refined our Global
Delivery Model to effectively integrate onsite and offshore technology services. The
Global Delivery Model provides clients with seamless, high quality solutions in reduced
time frames enabling them to achieve operating efficiencies.
Commitment to superior quality and process execution:
Infosys have developed a sophisticated project management methodology to ensure
timely, consistent and accurate delivery of superior quality solutions to maintain a high
level of client satisfaction.
Strong Brand and Long-Standing Client Relationships:
They have long-standing relationships with large multinational corporations built on
successful prior engagements with them.
Status as an employer of choice:
Infosys has among the best talent in the Indian technology services industry and are
committed to remaining among the industry’s leading employers. We have a presence in
13 cities in India, allowing us to recruit technology professionals with specific geographic
preferences. We have a diverse workforce which includes employees from 70
nationalities.
Ability to scale:
Infosys have successfully managed their growth by investing in infrastructure and by
rapidly recruiting, training and deploying new professionals. We currently have 52 global
development centers.
Innovation and leadership: A pioneer in the technology services industry. We are one
of the first Indian companies to achieve a number of significant milestones, which has
enhanced our reputation in the marketplace.

WEAKNESSES

• Revenues and expenses are difficult to predict and can vary significantly from period to
period, which could cause share Price to decline

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• may not be able to sustain our previous profit margins or levels of profitability
•The economic environment, pricing pressure and rising wages in India and overseas
could negatively impact revenues and operating results
• revenues are highly dependent on clients primarily located in the United States and
Europe, as well as on clients concentrated in certain industries. Economic slowdowns or
factors that affect the economic health of the United States, Europe or these industries
may affect our business.
• Any inability to manage growth could disrupt our business and reduce our profitability
• may face difficulties in providing end-to-end business solutions for our clients, which
could lead to clients discontinuing their work
• revenues are highly dependent upon a small number of clients, and the loss of any one
of our major clients could significantly impact the business
• failure to complete fixed-price, fixed-time frame contracts within budget and on time may
negatively affect our profitability
• client contracts can typically be terminated without cause and with little or no notice or
penalty, which could negatively impact our revenues and profitability
•the engagements with customers are singular in nature and do not necessarily provide
for subsequent engagements

OPPORTUNITIES
• Huge untapped potential for in the global market as IT will become the need of almost
every industry
• The IT industry can be the reason for India being a global leader of tommorrow

THREATS
• Legislation in certain of the countries, in which infosys operates, including the United
States and the United Kingdom, may restrict companies in those countries from
outsourcing work overseas
• Intense competition in the market for technology services could affect cost advantages,
which could reduce the share of business from clients and decrease the company’s
revenues
• Our client contracts are often conditioned upon our performance, which, if
unsatisfactory, could result in less revenue than previously anticipated
• Some of our long-term client contracts contain benchmarking provisions which, if
triggered, could result in lower future revenues and profitability under the contract.

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 KEY PERSONNEL

N R Narayana Murthy
B.E.(Electrical), Mysore University
M.Tech. IIT,Kanpur

• Nandan Nilekani, Co-Chairman

• Gopalkrishnan, CEO &MD

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Infosys Executives, Members of the Board and CFO

V. Balakrishnan, CFO
Srinath Batni
K. Dinesh
S. Gopalakrishnan
N. R. Narayana Murthy
Nandan M. Nilekani
T. V. Mohandas Pai
S. D. Shibulal

Independent Members of the Board

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FINANCIAL NUMERICALS

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GRAPHICAL ANALYSIS

HR Practices in Infosys Technologies

Most of the HR practices of Infosys were a result of the vision of its founders and the
culture that they had created over the years. The founders advocated simplicity and
maintained the culture of a small company. The employees were encouraged to share
their learning experiences.

RECRUITMENT

• Focus on recruiting candidates who display a high degree of 'learnability'

• Significant importance on professional competence and academic excellence

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TRAINING

• Infosys conducted a 14.5 week technical training program for all new entrants
• New recruits were trained at the Global Education Center (GEC) in Mysore

TRAINING PROGRAMS FOR EMPLOYEES

Infosys also conducted training programs for experienced employees. The company had
a competency system in place which took into account individual performance,
organizational priorities, and feedback from the clients.

PERFORMANCE APPRAISAL

Criteria: Timeliness, quality of work carried out by the employee, customer satisfaction,
peer satisfaction, and business potential.

CORPORATE SOCIAL RESPONSIBILITY

The Infosys Foundation had its focus in the areas of education, healthcare, rural
upliftment, and arts and culture this year. Highlights of some of the projects undertaken by
the Foundation this year are:
Education
• Sponsored ‘Vijanana Sammelana’ at Shimoga, Karnataka, to impart knowledge of
science to students and teachers
• Donated computers and laptops to Gulbarga University, Athani University, Mangalore
University and to the All India Vayu Sainik Camp in Bangalore
Healthcare
• Completed the construction of an advanced pediatric block at Wenlock Hospital in
Mangalore and a Community Eye Centre within the premises of the Shankar Nethralaya
in Bangalore
• Donated medical equipment and medicines to the Trivandrum Regional Cancer Centre,
Salem Charitable Hospital and Jammu Hospital. The Foundation has spread its donations
to various other hospitals in Karnataka and Maharashtra where poor patients are treated
for free
Arts and culture
• Sponsored more than 5,000 students, through NGOs like Prerna and Vidya Poshak, for
the study and documentation of Karana Viniyoga, to preserve and encourage the art.
Karana is a dance form defined and described in great detail by sage Bharatha in his
work Natyashastra.
Rural upliftment
• Conducted relief work for the flood victims in Kerala and Orissa

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 FUTURE PLANS

Infosys IT solutions to boost power sector in India

The Ministry of Power of the Government of India is partnering with the Center for
Study of Science, Technology and Policy (CSTEP), a research organization, and Infosys
to develop advanced IT solutions for the generation, transmission and distribution of
power. CSTEP and Infosys will apply IT to enhance the quality of service and streamline
the functioning of the power sector.
In 2002, the Indian Government constituted a Task Force to identify new
developments in IT related to power distribution, undertake pilot projects and make power
applications more consumer-friendly. The task force was headed by Nandan Nilekani, Co-
Chairman, Infosys.

SIGNIFICANT EVENTS
Top mobile operator Bharti Airtel Ltd said on Wednesday that it had tied up with Infosys
Technologies to deliver its direct-to-home service. As part of the agreement, Infosys will
provide technology products that will help Bharti to offer digital and interactive
applications on its DTH TV service. Bharti launched its DTH satellite TV service on Oct 9,
initially in 62 cities.

Axon group dropped its backing for Infosys’s takeover bid in favor of a higher offer from
HCL technologies. Infosys's 600 pence per share, or 407 mn pound ($719.9 mn), bid for
Axon was trumped by HCL's cash offer of 650 pence per share or 441.1 mn pounds.
Axon said it gave Infosys 60 hours to mull over the higher HCL offer before it shifted its
recommendation.

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 SUGGESTIONS AND CONCLUSIONS
Infosys is known for its values as their tag line itself says-Powered by intellect,
Driven by values. It has a good reputation amongst its customer base and also among the
investors. And Infosys has never let them down. It should continue with its goodwill by
delivering quality services to its clients.
IT is the backbone of all industries. Efficient working of the industry can be ensured
by subscribing to the IT services and subsequently costs can cut down. Hence as long as
industries are fuming out smoke, IT is going to stay. When it comes to infosys, most of its
products cater to banking industries which is in a turmoil. Hence it must not only stop
depending on its banking services but also should turn towards other industry’s IT
requirements. This includes manufacturing, designing, textiles, etc.
Infosys must also tap the potential mobile software market. With the advent of 3G
mobile phones, mobile software industry are looking forward to doing good business, as
its evident that once 3G services starts, the customers will be looking forward to many
mobile based softwares. However, as a step in this directon, Infosys has bought stake in
OnMobile Inc. which makes mobile softwares. But its not directly involved in the it.Hence,
Infosys should think about the same.

REFERENCES:
1. Infosys annual report ‘08

2. Infosys presentation for investors

3. Infosys official website- www.infosys.com

4. IBEF.org

5. moneycontrol.com

6. www.mit.gov.in – A Government Of India Website

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