Delivering Solutions Leveraging the Global Delivery Model Basab Pradhan © Infosys Technologies Limited 2003 -2004
While business is still good, the Indian IT Services Industry, as we know it, is facing challenges that require fresh thinking on new strategies “State of the Business” » GDM is the most important, paradigm shifting change that is occurring in the IT services industry » The market will expect that GDM is embedded in every service and every solution that they buy from an IT service provider » We are at the center of this change as the leading, best practitioner of the Global Delivery Model » The demand for offshore outsourcing is gaining rapid momentum. Industry growth can be expected to be robust for the immediate future © Infosys Technologies Limited 2003 -2004 Challenges for the future » Dark lining in this silver cloud margin pressures in offshore outsourcing, the main stay of the Indian IT services Industry » Increasing number of credible competitors » Clients increasingly savvy about negotiating lower prices » Getting difficult to differentiate based on service offerings or quality Need to innovate new strategies for sustained, profitable growth Analyst Meet 2003 1
Infosys has developed a solutions-led growth strategy to attain sustained, profitable growth New Focus: Solutions Orientation Weave together services into innovative solutions Business. Technology Solutions » » Drives greater profitability Builds deeper client relationships Increases brand salience Focus, innovate » Core profitable business with high Infosys Growth Drivers Present Focus: Service line expansion Execution excellence Offshore Outsourcing New Service Lines © Infosys Technologies Limited 2003 -2004 repeat revenues » Drives high volumes and economies of scale » Differentiate to hold the price line – Outsourcing as a Solution » Builds new capabilities (e. g. BPM, Business Consulting, SI, IMS) » Increases customer share-of-wallet Analyst Meet 2003 2
What is a ‘Solution’? An integrated offering of products and services which delivers greater value than the simple sum of its parts, and which can be customized for a client NOT Solution » Application maintenance services by IT Services companies – single unintegrated service line » Infosys’ integrated business process reengineering, package implementation and maintenance services to optimize lead times for apparel retailers » Strategy or process consulting services by a Business Consulting firm – single, un-integrated service line Source: The Mc. Kinsey Quarterly © Infosys Technologies Limited 2003 -2004 » Infosys’ strategic sourcing, strategy development, implementation planning and execution offering » Integrated call receiving, routing, management, dispatch solution comprising hardware, software, training by a call center solutions provider Analyst Meet 2003 3
In the IT Services industry context, there are important differences between a services-based strategy and a solutions -based strategy Services model Solutions model Examples Application Development, of offerings Maintenance, Reengineering, sold Consulting, BPO IT Effectiveness, Shared Services ERP support, Lead-time Optimization Sales Approach “This is who we are and what we do, what would you like to buy? ” “Let me understand your problem and present a solution” Pricing Cost plus margin Based on value delivered to client Marketing Approach Sales push, About Infy Marketing pull. Around business problem and industry Skills Required Technical competency, Project Management Domain and Technical competency; Program Management © Infosys Technologies Limited 2003 -2004 Analyst Meet 2003 4
A solutions-driven business model offers several advantages and economic benefits over a services-driven model Value based pricing Deeper client relationships Repeatability increases productivity Less prone to commoditization GDM brings value to clients Higher price points anchor higher billing rates Employee professional development © Infosys Technologies Limited 2003 -2004 Analyst Meet 2003 5
However, significant changes are required to make a successful transition into a solutions-driven model Sales & Marketing Team-selling Specialist sales staff ‘Trusted Partner’ branding Targeted messaging Organization Vertical or Domain based structure Cross-functional collaboration and teams Human Resources Recruiting of specialists Deep domain skills training Cross-staffing management Processes & Systems Integration across service lines Collaborative workflows Knowledge management tools © Infosys Technologies Limited 2003 -2004 Analyst Meet 2003 6
Infosys has put in place the basic elements required to implement the solutions model, and is progressively rolling out remaining elements Evolving Brand Positioning Frontline Staff Solutions Framework Alliance s Program Staff Training Solution Teams End-to-end service portfolio Rewards and Incentives Vertical IBUs Business Consulting Expertise © Infosys Technologies Limited 2003 -2004 Senior Mgmt Sponsors Knowledg e Mgmt Systems Analyst Meet 2003 7
Each Infosys unit has developed solutions plans, and although real benefits are a few quarters away, some early wins have been recorded Early Wins Unit Solutions Retail IBU Lead-time Optimization with Supply. Chainge, RFID, Distributed Order Management with Yantra, Merchandising Analytics, Customer Relationship Management CAPS PU Identity Management, Integrated Service Management Auto & Aero IBU Product development and PLM implementation with Matrix. One, CATIA migration with Microsoft Enterprise Solutions PU Package Shared Services Platform, Upgrade Kits for Siebel, Oracle, People. Soft Systems Integration PU Accelerated XP Deployment with Microsoft, Identity Management, Enterprise Information Portal, Data Center Design & Deployment, Enterprise Content Management © Infosys Technologies Limited 2003 -2004 Analyst Meet 2003 XP deployment at large US bank Identity management at Auto mfr. Data center solution for 2 clients PLM implementation at Auto mfr. Enterprise portal at European financial services giant 8
We are going to face competition. Clients are asking for business solutions leveraging GDM, and everyone is scrambling to occupy that space Final Four & IBM Business Solution Focused on business buyers Imperative to Create and Integrate GDM Capabilities Imperative to Inject a Solution Focus To Services Infosys Tier-2 GDM Firms Focused on IT buyers Extent of GDM in Service Delivery © Infosys Technologies Limited 2003 -2004 Analyst Meet 2003 9
Given its market position and capabilities, Infosys is a well positioned to successfully execute on this market opportunity Premium brand positioning Business consulting expertise End-to-end service capability Award-winning knowledge management practices Best-in-class employee development practices Deep domain competency across verticals Integrated project management processes across service lines GDM excellence © Infosys Technologies Limited 2003 -2004 Analyst Meet 2003 10
All Infosys stakeholders will benefit from a solutionsdriven growth model going forward Managed solutions to business problems Better value proposition than global majors Faster growth Higher profitability Shareholders Clients Partners Employees Career development New skills Found cost-effective SI and Consulting partner Recognition for higher value-add Better value proposition for clients © Infosys Technologies Limited 2003 -2004 Analyst Meet 2003 11
Thank You www. infosys. com © Infosys Technologies Limited 2003 -2004
“New” Services as % of Revenue “New” services defined as services other than Application Development, Maintenance, Re-Engineering and Products © Infosys Technologies Limited 2003 -2004 Analyst Meet 2003 13
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