Infosys Consulting in 2006
Abhishek, Anshuman, Ashish Sinha, Binand, Gautam, Manish, Niren, Praveen, Rajul, Surjendu
HOW IS INFOSYS PLACED IN GLOBAL IT SERVICES INDUSTRY IN 2006?
many players. dependency on large firms
• Low supplier power
– Many resources available at low cost
• Moderate threat of new entrants
– Difficult to copy brand value
• Low threat of substitute
– No substitute
• High competitive rivalry
– Fragmented market. many providers. moderate switching cost
. not much differentiation.IT Services are driven to low cost
• High buyer power
– Commoditized technology.
High entry barrier
• Low substitute
– No substitute
• High competitive rivalry
– Many players but high switching cost
.Business Consulting has higher power
• Medium buyer power
– Established providers. dependency upon client brands
• Medium supplier power
– Higher skills required which are low in supply
• Low threat of new entrants
– Difficult to copy brand and culture.
Where is Infosys Technologies?
• Biggest global players : IBM and Accenture • Value chain
Onshore IBM / Accenture Infy / TCS
APP DEV & MAINT
Expertise – Experience – Procedure
• US companies are moving down the value chain • Indian companies are trying to move up
710 0.09 1.890 0.355 1.Where is Infosys Technologies?
1999 IBM Accenture Infosys Wipro 2003 5000 3700 Employees 2004 2005 11000 25000 2006 110000 126000 52700 2007
IBM Sales($Billion) Accenture Infosys IBM Rev/employee Accenture ($M per Emp) Infosys
91.146 0.841 18.592
Infosys Technologies Limited
.Where is ICI in Infy?
Infosys Consulting Inc.
What is ICI’s Value Proposition?
Global Delivery Model (of Infosys) – •1-1-3 configuration •24 hour project work day
•Right mix of business and technology consultants •Lower blended rate •Shortened implementation time •Minimum deviation from design to implementation
Metrics to measure business process improvement from the engagement
•Measurable benefits •Value based case fee
Thus GDM Offers…
• Reduced cost as offsite resources in India
• Increased delivery time through 24 hours op. • Measurable benefits of deliverables
WHY INTO CONSULTING? WHY ON ITS OWN?
Why Infy into Consulting?
• Repeat business could provide higher revenue
– Fill gaps in offerings
• Existing relationships became complex
– Address new opportunities of clients – Richer client relations: One-point solution
• Global service market in 2004: 550 $B
– Huge opportunity as TCS+Wipro+Infy had .8% only
Why on its Own?
• To develop its own brand
– Subcontract could dilute it – Joint ventures have limited life & Validity
• Overlap of activities & Conflict of interests
• To leverage the Global Delivery Model (GDM)
– Causing further disruption to consulting – New model can not be setup through acquisition
• Transform Culture & Build Brand as global transformation enabler
How Is Infy Moving in Consulting?
INTERFACES BETWEEN ITL & ICI WHAT ARE THE CHALLENGES?
Constant redefinition and learning • Adapt ITL sales process to include ICI services • Fork in the road: Ownership & Accountability
– Job allocation: Transformation (ICI) & Technology (ICT)
• Performance management of ICI by Sr. cultural integration.Objective: Seamless Integration
• Mirror ITL (industry-wise organized) • Coordination driven by metrics
– Each BU has specific goal for ICI – ICI has specific revenue goals for ITL
• Collaboration driven by “One Infy” culture
– Incentives & rewards. Executives of ICT
. Forum – One company to customer
• Evolution . cross-business training.
ITL or ICI?
• 1-1-3 model and its efficiency
Can it be leveraged everywhere?
.Challenges: Seamless Integration
• Business Integration
Where to draw line between business and technology consulting? How to utilize common sales force?
• Culture Integration
ICI formed by a team of outsiders Different people: Foreigners in ICI vs Indians in ICT
• Single view to customer
Mechanism for revenue sharing on same account Who would be the key contact .
INFY AND ITS COMPETITORS
Infy’s Competitors Are Strong
• Infy’s strategy includes
– Integration of management & IT consulting – Increase in cross-selling – Cost-effectiveness
• Should IBM and Accenture feel threatened by ICI?
– Already have integrated services – ICI is small player in consulting
• Is it a big concern as of now?
– It takes long to establish in business consulting
• Should they also go for low cost model?
• Business consulting is people oriented
– Face to face interaction has more importance – 3-3-1 model may be needed. not 1-1-3!
• Business consulting is thinking oriented
– Gaps of silence needed.
. 24 hours continuity may not add any significant value.GDM can not be extended
• Business consulting is expertise oriented
– GDM works well for procedural and experiential activities. IT has been commoditized.
How Can Competitors Respond?
• Increase the value proposition higher
– Decrease buyer power and increase competition
• Integrate management and IT consulting further
– Remove complexities in integration – Same impact as above
• Need not try to replicate 1-1-3 model everywhere
– GDM good for low end IT Consulting – May not work for critical high end business consulting
– Financial support is available
• Deliver higher Value and Communicate
– Look beyond GDM
• Get the best talent • Integrate ICI and ITL and have better interface • Build the brand
– Not many know ICI in business consulting – Infosys is still known as an IT services company
.What Should ICI do post 2006?
• Expand global reach (revenue.