INFORMATION TECHNOLOGY

PHASE 3 –STRATEGIC ANALYSIS Sumant Jain (80011920058)

- GROUP 14N Tanya Mangla (80011920077)
Tulika Sahay (80011920038)
Utkarsh Kumbhare (80011920004)
Vasudha Jhawar (80011920055)
RECAP (Phases I & II)
1. Introduction to IT Industry
2. Growth Drivers & PESTLE Analysis of the selected
companies
3. Domain Wise Analysis (Financial, Marketing, Operations &
SCM, HR Analysis)
4. Key Performance Indicators (KPI)
5. Porters 5 forces
6. SWOT Analysis
7. Value Chain Analysis
8. BCG Matrix
9. GE Matrix
10. Recommendations
KPI
 Financial KPIs
Project
• It estimates if the costs of the project are below or above the originally planned upper limit
delivered • To calculate the cost variance, divide the planned budget to the actual budget at a given time.
• IT major Infosys plans to roll out in about two years, its Rs 700-crore project that would help India Post transform its banking and
on insurance operations across 150,000 post offices in the country.
Budget
• The ROI is measured dividing the benefits by the cost of investment. The higher the better of course. It is important to measure it
IT ROI over time to see its evolution, that should go upwards.
• Wipro developed a Total Cost of Ownership (TCO)/ROI calculator that simulates multiple IT infrastructure utilization scenarios,
and the tool presents a dashboard of the break-even periods, with a detailed ROI analysis through a complex model that
accurately computes based on projected cost elements.

IT Cost • Breaking down the investments into the different unit levels (software, hardware, SP, personnel) and each of the
components (maintenance, infrastructure, development, operations) will give a better insight on where the money is
Break spent and identify the main cost drivers as well as opportunities for improvement.
• HCL offers additional analysis of the report with detailed breakdown of all cost components like Capital Investment, production
Down cost, dynamic cost models etc.

IT Cost vs • IT KPIs compares the IT expenses to the revenue generated over a year. It is an important metric for IT companies that scale
heavily over a short period of time and witness large revenue increases.
Revenue • Large IT companies have witnessed over 50 times growth in revenue over the past 14-15 years.
• In the case of small and mid-size companies involved in niche areas such as Telecom R&D outsourcing, the average billing rates
have remained stagnant or have gone down over the past 15 years.
 Operational KPIs
New
• This KPI have a clear overview of the feature development in order to implement the findings.
Developed • In 2020, IT industry have planned for implementing Hyper-contextual, micro-capabilities that lead to mass personalization at scale
• The performance indicator is to Measure the developed features over time, compare, and optimize based on your overall
Features business goals and teams’ productivity levels..

Number of • IT Industry has KPI in showing total number of critical bugs which are reported internally or externally.
Critical • These number should be as low as possible since a high number of externally reported bugs can affect the brand.
• Wipro and other IT industries include automation, test data and environment management and is witnessing the emergence of
bugs quality engineering where testers have development skills and developers have testing skills.

Server • In IT Industry, downtime can be planned for maintenance, updates or reboots, that are necessary to a well functioning
infrastructure
Downtime • It measures on a monthly basis or on a quarterly or annual basis.
• It can measure the downtime in minute alongside the uptime as a percentage. Having an uptime over 99,9% is considered good
and is favorable.

Meantime • It is measured calculating the time between the start of the incident and their moment it is resolved.
to • It includes the diagnostic time, fixing time, alignment, calibration etc to get back to production.
• The performance indicator is knowing which issues appear and for how long, it can better develop standard processes and
Repair strategies to tackle them as they happen, and benchmark over time the evolution.
 Marketing KPIs
• Indian IT industry employed 205,000 new hires, up from the 185,000 jobs added in FY19 and had 884,000 digitally skilled
talents in 2019.
Sales Growth • Measuring sales growth is the vital to the long-term health of the company.

Cost of •
•
It is the cost associated in convincing a prospective customer to buy Company’s product or service.
IT Industry developed the predictive models to help the company to target customers more efficiently, improve cross-selling
Customer strategies, and promote higher-margin own-brand products.
• Costs were reduced by rationalizing target databases, and incremental response rates boosted through more intelligent
Acquisition targeting.

Website • The Website Traffic Lead Ratio tells that how many website visitors convert to leads.
traffic to •
•
In IT Industry, effective landing pages combined with targeted traffic can give a conversion ratio of as high as 50-60%.
KPI is helpful for measuring two things:
website - The quality of website’s traffic.
- The conversion rate of website.
lead ratio
Lifetime Value • Customer lifetime value, is a business metric that estimates the total predictable repeat purchase rate of a customer over the
lifetime of their time with your brand.
of a Customer • The higher your brand’s LTV (lifetime value) is, the more valuable it is considered in the market.
 HR KPIs
Accuracy
• IT industry estimate how much time they need in order to complete a task.
of • It is done by Monitoring the task efficiency with a percentage and break it down by team members so that you know which
tasks have caused inaccurate estimations and examine
Estimates
• This IT KPI is a key metric for every project manager and employees as it helps to monitor the planned tasks, projects and
Average sprints.
• Wipro helped the client reduce the overall average handle time (AHT) of the customer service process by 100 seconds.
• Analyze the sprints at preferred time-interval (one week, two weeks, four weeks, etc.), and optimize the workload of all team
Handle Time members. Then, plan the average handle time more accurately, and hence have more control over project deadlines.

• The cost of hire from market vs rotation of other unit internal resources, the lead time for a hire to be productive vs lead time
Employee for cross skilling of internal resource should be measured as the key KPI.
• Infosys suggests that the HR organizations should measure the employee engagement rate as the primary KPI followed by
Engagement KPI generated out of employee innovation ideas.

HR
• The key KPI to evaluate the profit generated should be the cost involved versus the % of savings post investment. The
operations break-even generally would take more time but will surely be a value add in long run.
• The major concentration for traditional organizations in IT were strategically to improve on HR operations cost and it is now
and logistics the least priority as this parameter won't add significantly to the overall profit of the organization as HR operations team
Initiatives doesn’t constitute even 5% of total human resource strength
PORTERS 5 FORCES
INDUSTRY RIVALRY

• Large number of players

• Commoditization
• Difficult to differentiate 
• No entry and exit barrier
• Uneven market share
BARGAINING POWER OF SUPPLIERS

• Low supplier bargaining

• Multiple suppliers
• High-standardization exists
• Little scope of suppliers
having any clout
 THREAT OF
SUBSTITUTES

• Buyer propensity to substitute

• Relative price performance of substitute
• Perceived level of product differentiation
• Number of substitute products available in the mark
• Substandard product
BARGAINING POWER
OF CUSTOMERS
• Buyer information availability
• High customer bargaining
• Possibility of pressure on rates exists
• Customers have a sizable option to choose from
 THREAT OF
NEW ENTRANTS
• Economies of product differences
• Brand equity
• Switching costs or sunk costs
• Capital requirements
• Access to distribution
• Customer loyalty to established brands
SWOT ANALYSIS
• Highly skilled human resource
• Cost competitiveness
• Quality telecommunications
infrastructure
• Ability to innovate
• Lack of domestic computerization
• Less research and development
• IT development concentrated in a fe
w cities only
• High rate of attrition
• Decreasing competitive advantage
• E-governance initiatives by government
• Increasing demand for domestic BPO
• Product innovation
• Increasing competition
• Global economic slowdown
• Lack of data security systems
• Government regulation
Value Chain Analysis
 Primary Activities

Inbound Logistics
• Company can face various challenges in product development
phases.
• Analysis of in-bound logistics requires - focus on every aspect of
transformation from raw material to finished product/services.

Operations
• It includes both- manufacturing and service operations.
• Analysis of activities is important for improving productivity,
maximizing the efficiency and ensuring the competitive success of
the company.
• Quick response to unique specifications
• The increased productivity can help companies achieve consistent
economic growth, increase profitability and set a powerful basis for
competitive advantage.
Outbound Logistics
• Deliver the product/ service to the customer by passing
through different intermediaries.
• Company can analyze and optimize the outbound logistics to
explore competitive advantage sources and achieve its
business growth objectives.

Marketing and Sales

• Improved relationships with suppliers and customers.
• The company uses marketing funnel approach to structure its
marketing and sales activities.
• The marketing strategies - push or pull in nature, depending
on business objectives, brand image, competitive dynamics.
• Wider sales force coverage.
Services
• The pre-sale and post-sale services offered
plays an important role in developing customer
loyalty.
• Reliable and quick repair/maintenance service.
• The company must analyze its support activities
to avoid damaging brand reputation, and instead
use it as a tool to spread positive word of mouth
due to quick, timely and efficient support service.
 Secondary Activities

Firm infrastructure
• It denotes a range of activities, such as- quality management, legal
matters handling, accounting, financing, planning and strategic
management
• Advanced information system to get deeper customer insights.
• Company control the infrastructure activities to strengthen the
competitive positioning in the market.

Human resource management

• Attractive rewards to encourage creativity and maximize productivity.
• The company can also achieve its cost minimization objectives by
analyzing hiring and training costs with their relative return.
• The heavy dependence of company on employees' talent will increase
the importance of this value chain support activity. 
Technology development
• Innovation integration in product designing.
• It can be divided into product and process technological
development activities.
• Some examples are- automation software, technology-
supported customer service, product design research and
data analytics.

Procurement
• Reliable transportation to ensure quick and safe delivery to
optimize inbound, operational, and outbound value chain.
• Company should highlight areas where value can be added,
cost efficiency can be achieved, differentiation basis can be
set, or processes can be optimized.
BCG Matrix
BCG Matrix

• BCG is a strategy tool created by Boston consulting

group.
 It is a four celled matrix (a 2 * 2 matrix)

• It provides a graphic representation for an organization

to examine different businesses in it’s portfolio.
It classifies business portfolio into four categories

• It is the most renowned corporate portfolio analysis tool.

• It helps in comparative analysis of business potential

and the evaluation of environment.

• According to this matrix, business could be classified as

high or low according to their industry growth rate and
relative market share.
Relative Market
Share & Growth
Rate
Company Relative Market Share Revenue Market Growth
TCS 100% 161541 7.14%
Infosys 57.93% 93594 9.39%
Wipro 39.53% 63,862 3.61%
Mindtree 4.88% 7,839 6.9%
HCL 44.11% 71265 16.12%

>Relative Market Share = SBU

Sales this year/leading competitors sales
this year.

>Market Growth Rate = Industry

sales this year - Industry Sales last year.
Insert the title of your subti
4 Categories
1
. Star

2
. Cash Cow

3
. Question Mark

4
04 .
Dog
GE MATRIX
TCS
• Market leader by market Cap.
• Price to book ratio high in industry.
• Revenue growth – 9.8% CAGR(3yrs)
• Net Profit growth – 7.1% CAGR(3yrs)

HCL
• High Market Cap
• Price to book ratio above industry median
• Revenue growth – 13.6% CAGR (3yrs)
• Net Profit growth – 8.7% CAGR (3yrs)

Infosys
• Market runner up in market Cap.
• Price to book ratio high in industry.
• Revenue growth – 9.4% CAGR (3yrs)
• Net Profit growth – 5% CAGR (3yrs)

Wipro
• High Market Cap.
• Price to book ratio above industry median
• Revenue growth – 3.2% CAGR (3yrs)
• Net Profit growth – 4.6% CAGR (3yrs)

Mindtree
• High Market Cap.
• Price to book ratio high in industry.
• Revenue growth – 14% CAGR (3yrs)
• Net Profit growth – 14.7% CAGR (3yrs)
RECOMMENDATIONS
• India is the topmost offshoring destination for IT
companies across the world.
• In 2020, the government released “Simplified
Other Service Provider” (OSP) guidelines to
improve the ease of doing business in the IT
Industry, Business Process Outsourcing (BPO)
and IT-enabled Services.
• The computer software and hardware sector in
India ranked 2nd in FDI inflows as per the data
released.
• Artificial Intelligence (AI) is expected to boost
India's annual growth rate
THANK YOU