Business Strategic

Management of Infosys

Presented by: Deepika Aggarwal

Priyanka Kant
 Vision And Mission

» Vision:- “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 our clients, employees, vendors and
society at large."
 Values
» Infosys’ value system is best articulated by the acronym
C-Life – Customer Delight, Leadership by Example,
Integrity & Transparency, Fairness and Pursuit of
Excellence.
» The major objective of the company is to become India’s
most respected company.
» Infosys deliberately defocused on revenue and profits.
Their goal was to do everything by the book.
 Introduction to Infosys

Infosys Technologies Ltd. was started in 1981.

Today, it is a global leader in the "next generation" of IT and consulting.

Infosys defines, designs and delivers technology-enabled business solutions

that help Global 2000 companies win in a Flat World.

Infosys serves the client globally and is one of the pioneers in strategic
offshore outsourcing of software services

Infosys pioneered Global Delivery Model (GDM)

 Milestones Awards & Achievements
» In 1987 Infosys got its first foreign client. » Infosys moved up to No. 14 on Fin Tech 100.

» In 1993, Infosys became a public limited » Awarded the ‘India’s Best company to work
company and received ISO 9001/Tick IT for’ in 2009.
certification.

» In 1999, Infosys crossed $100 Million and was » Infosys was honored with the Sharpening
listed on NASDAQ.
Brand and Competitive Differentiation

» In 2006, Infosys completed 25 years of its Marketing Excellence Award from the
existence and its revenues crossed $ 2 billion. Information Technology Services Marketing
Association (ITSMA)
» Today Infosys has more than 1,03,078
employees and has presence in more than 20 » A leader in SAP implementation services.
countries across the world.
 Infosys - Business Lines

Goods and Logistics

Banking and capital

Energy, utilities and

Healthcare and Life

India Business Unit

Retails, Consumer

New Markets and

Communication

Manufacturing
Entertainment
Media and
Insurance

Markets
Sciences

Services

Services
Consulting Solutions (CS)
Enterprise Solutions (ES)
Product Engineering and Validation Services (PEVS) – PED, PLES, IVS
Infrastructure Management Services (IMS)
Software Engineering and Technology Labs (SETLabs)
System Integration Services (SI)
Corporate Sales and Marketing (CSM)
 S.W.O.T. Analysis
Strengths
» Cost advantage – Presence of Infosys
in India is key to its success
» Breadth of service offering – end to
end solutions including high end
services like IT consultancy and KPO
» Quality and maturity of process –
Infosys has quality standards such as
CMM Level 5i to differentiate from
other competitors
» Global and 24/7 delivery capability –
excellent internet backbone and
telecommunications facilities enabling
companies to develop 24/7 delivery
capabilities from India itself
Weaknesses
» Excessive dependence on USA for
revenues – US Companies are cutting
down IT budget hence revenues to be
hit hard for Infosys
» Excessive dependence on BFSI sector
for revenues – Banking sector is facing
a crisis globally and is going to spend
less on IT
» High rates of attrition – Although
slowdown in global economy has
lowered attrition rate but the industry
still faces high attrition rates as
compared to other sectors
» Decreasing competitive advantage –
rising salary expenses is taking away
the cost advantage enjoyed by Indian
companies (including Infosys).
 S.W.O.T. Analysis
Opportunities
» Greater scope for product innovation
» Increased focus on high end work like
consulting and KPO
» Domestic demand for IT services is to
grow at 20 %
» Greater scope to service domains other
than BFSI such as Transportation,
Infrastructure, etc.
» Satyam fiasco – Likely to have positive
impact on business considering
corporate governance, possibility of
shifting of business, getting higher
incremental business from overlapped
clients, and winning new business from
new clients
Threats
» Global economic slowdown may
continue for several years – hence low
IT spending globally
» US Govt. against outsourcing
» Shrinking margins due to rising wage
inflation
» Rupee-dollar movement affects revenue
and hence margins
» Increased competition from foreign
firms like Accenture, IBM etc.
» Increased competition from low-wage
countries like China, Indonesia etc.
 Porters Five Forces Model

Threat of Substitutes:
1. Other offshore locations – Low Cost
Locations like Eastern Europe,
Philippines and China.
2. Price quoted is the biggest
Differentiator.

Rivalry among Firms: Bargaining Power of Customers:

Bargaining Power of Supplier: 1. Large Number of IT Companies
1. Low Cost
1. Due to Slow Down, Job Cuts,
2. Commoditized vying for projects – High
layoff & bleak IT outlook Competition
offering
2. Demand Supply is not 2. Huge Decline in IT Expenditure
3. High Industry
favorable to employees
growth
3. Availability of vast pool of
talent.

Barriers to Entry:
1. Low Capital Requirements
2. Large value chain for small
enterprises
3. MNCs are ramping up capacity
and employee strength
 HIGH
BCG Matrix – Infosys (India)

Maintenance
Software Products
Business Package Implementation
Growth
Rate
LOW

NONE Consulting, BPO,

KPO

HIGH LOW

Market Share
 McKinsey’s 7 S Model
Style - LEADERSHIP
“Infosys Leadership Institute”
• Open door policy.
• Continuous sharing of information.
• Takes inputs from employees in decision making.
• Builds personal rapport with employees.
Staff – HUMAN RESOURCES
“Knowledge Based Industry” (90% are engineers)
• Emphasis on academic records
• Technical skills
• Ability to learn
• 2.65 per cent of its revenues on up gradation of
employees‟ skills
• High training standards
 McKinsey’s 7 S Model
Strategy
» Client focused strategy (custom built soft wares)
» Quality driven model.
» Strong Engagements with existing clients.
» Value added services to new clients.
» Geographical Expansion.
» Enhanced Solution Set.
» Consulting.
» Business Process Management.
» Systems Integration.
» Infrastructure Management.
» Deep Industry Knowledge.
» Brand Visibility.
» Pursue alliances and strategic acquisitions .
 McKinsey’s 7 S Model
Shared Values
» Customer Delight
» Leadership by Example
» Integrity and Transparency
» Fairness
» Pursuit of Excellence
Organizational Structure
» Free Form
» Flexible Team Structure
e.g. A member, who might have been team leader in one project, may be replaced
by another member of the same team for another project.
» Equality among employees
 McKinsey’s 7 S Model
Skills

» Domain specific Certifications

» Competency Building

Infosys has been CMM-Level 5 certified for its process capabilities.

It has entered the Balanced Scorecard Hall of Fame for Executing

Strategy for achieving breakthrough performance results using the
Balanced Scorecard (BSC).
 Strategy Analysis - Infosys
• Global Delivery Model
• Moving UP the value chain
Corporate
Level • PSPD Model

• Low Cost
• Differentiation
Generic
Strategy • Focus

• Ansoff’s Matrix
• Market Penetration Strategy
Grand • Market development Strategy
Strategy
• Product Development Strategy
 Infosys- Corporate Level Strategy

» Global Delivery Model: Producing where it is most cost effective and selling where
it is most profitable.
» Moving UP the value chain: Getting involved in a software development project at
the earliest stage of the life cycle.
» PSPD Model: “Predictability of Revenues, sustainability of revenues, Profitability,
De-Risking” for Risk Management.
» Actions Taken
» Expansion into low cost countries like Mauritius, Philippines, Thailand, Mexico
etc.
» Improved Quality capabilities -> CMM Level 5i
» Emphasis on delivering high value services
» Currency hedging for predictability of revenues.
» Investing heavily in training centers.
 Infosys – Generic Strategy
» Low cost Global delivery 24/7 Model

» Little differentiation in low-end services of value chain; high differentiation in high

end services in value chain like software products and package solutions.

» Focus on Quality, Customer relationship management, timely delivery.

 Infosys – Grand Strategies
» Ansoff’s matrix

Current Market New Market

Market Penetration Market Development

Current Product
Strategy Strategy

Product Development
New Product Diversification Strategy
Strategy
 Market Penetration Strategy
» Current Markets: USA and Europe
» Current Products: BPO, KPO, consultancy services (in BFSI,
manufacturing and retail) and software products (financial
products).
» Recommendation: As most large clients in US and Europe are
cutting costs, Infosys needs to be more aggressive on cost and
quality front.
» Result of strategy: Unlikely to yield good results.
 Market Development Strategy
» New Market: India, Middle-east and Australia
» Current Product: ADM, BPO, KPO, consultancy services
(in BFSI, manufacturing and retail) and software products
(financial products).
» Recommendation: Since these are fast developing IT
market, Infosys needs a paradigm shift in focus from US
and EU markets to new markets.
» Result of strategy: Likely to yield good result.
 Product Development Strategy
» Current Market: USA and Europe
» New Product: Consultancy and package implementation services
in relatively growing sectors esp. healthcare, life sciences and
aviation sector, and KPO services.
» Recommendation: Concentrate on building expertise in these
domains by strategic acquisitions.
» Result of Strategy: Likely to have good result. (better the
company acquired, the better the result).
 Diversification Strategy
» New Market: India, Middle-east and Australia
» New product: Consultancy and package implementation services
in relatively growing sectors esp. healthcare, life sciences and
aviation sector, and KPO services.
» Recommendation: Changing Brand image from low value
service provider to high value service provider.
» Result of Strategy: Difficult to achieve overnight (possible in
long term)
 Other Strategies
» CONCENTRATION: 90% of Infosys revenues from American and European
nations.

» VERTICAL INTEGRATION: Infosys recently made a bid to acquire a

European major – Axon consultancy to improve its business in European
markets, but finally called off the deal due to high valuation. Otherwise,
Infosys has always believed in organic growth.

» INNOVATION: The Software Engineering and Technology Labs (SETLabs)

at Infosys is the centre for applied technology research in software
engineering and enterprise technology.
SETLabs conducted 24 Innovation Workshops with customers from the US
and Australia, to identify research collaboration possibilities. Infosys
promotes a favourable work environment that encourages innovation and
meritocracy.
 Future Strategies

• High Dependence on Export Revenues

Infosys (99% revenues from overseas business)

• Cost cutting and reducing IT expenditure

Global
Slowdown
by almost all companies

Likely
• Negative in short term
Impact
 Future Strategies Contd..
» Global sourcing strategy is aligned with business strategy
» Enhancing operational efficiency and delivering value added
services.
» Structuring processes and services into modules thus leading to
enhanced flexibility and productivity.
» Aggressive focus on ERP solutions like Oracle and SAP.
» Expand into high end consulting.
 Lessons to Draw
» Do not put all eggs in one basket.
» Provide more high end services in value chain (3rd wave IT)
» Shift in focus from low cost advantage to high quality services.
» Consolidation and Strategic acquisitions are essential for future
growth of revenues.
» Quick adoption to high growth markets is necessary.
Thank you