Infosys Case Study

Introduction

Indian software industry: In the last few decades Indian software industry emerged as one of the best providers of software services and products globally, in the year 1999-2000 the software industry alone in India accounted for $5.7bn in revenues out of which $4bn come from software exports to other nations, which shows a positive signs and a 53% increase in software exports from previous year, 10% of the total exports of the country come from software only. In 1999 software industry shows some dramatic change in stock markets and it rose to $90bn from $4bn the same year on stock market, which further crash down due to NASDAQ crash, but till then 185 industries out of fortune 500 has already developed their offshore centres in India. (Palepu & khanna, 2001). The rise in Indian software industry is due to cheap talent available in the country and gradually building reputations for reliability and high quality services and began to provide value added services as compared to the global industries. (Banerjee and Duflo, 2000).

Infosys: Just with the mere amount of $300 Infosys consultants began its operations with visionary Mr. N.R. Narayanmurthy as its chairman, with a purpose of providing offshore and on site consulting on corporate programming by effectively utilising the inexpensive but well trained and talented software engineers of India. The first year successful operation resulted in revenues of Rs 1.16 mn which followed to Rs 100 mn down the lane in 10 years and success story is still going today. (Heitzman, 1999)

To compete in the niche market Infosys developed some of the remarkable software products such as DMAP distribution management application package a suite of 600 programs used by Reebok in France. Eagle a ware house management package and BANCs 2000 a n automated banking package installed at over 60 banks branches in INDIA by 1195 ( Heitzman, 1999)

In 1993 Infosys changed its name to Infosys technologies and listed the company on BSE with IPO and followed the corporate governance (Palepu & Khanna,2001) Infosys terminated its arrangement with Kurt salmon and associates in 1996 and formed a new fully owned subsidiary called Yantra corporation based in Massachusetts for marketing and supporting its products in US Yantra purchased Eagle for US$ 10 mn. In 1996-97 Infosys invested some US$ 2 million in research and development so that it can focus on developing its new and innovative products only. Followed by huge success always Infosys revenues rose from US$2.64 million in 1991 to US$18.11 million in 1995 to US$39.59million in 1997( Heitzman, 1999) Company now adopted a structure bas on focusing on five strategic business units focusing on specific business domains plus 10 group focusing on specific product and management fields for e.g. education technology etc. Infosys has eight development centres in India, six sales offices in U.S. and two in Europe. (Heintzman, 1999). One of the major strengths of Infosys is its Human resources Infosys in March 1997 hired 1705 employees labelled them as “Infoscions” and intend to hire some 700 more which accounts for 36% of the total revenue of the Infosys. Infosys on an yearly average invest some 5% of its revenue on training and development of its staff. (Heintzman, 1999)

Infosys corporate strategy:

Corporate strategy: The overall strategy for a diversified multi service/ multi product organizations, tells the overall scope of the business in terms of product services and resource management. ( Thompson & martin,2005)

The emergence of strategic management discipline in 1960’s resulted in four major corporate strategies SWOT in 1960’s, Strategic planning matrix in 1970’s, competitiveness in 1980’s, and core competencies in 1990’s (karki, 2004) . During that era corporate strategy is decided based on the assessment of frameworks and responsive to the imperatives of evolutionary and emerging contexts, but for the coming decade the imperatives for the India organisation are:

“From the evolutionary context – Correcting the mindset of dependency on the government; going beyond rationalization of businesses; establishing tight linkages between corporate and business strategies with operations; venturing into new areas; and, building on success against multinational corporations.

From the emerging context – Large, growing, and internationalizing Indian economy;

Globally integrated capital markets; information and communication technologies;

Tenets of governance; and, management resource and capability” (Karki,2004)

Considering the above mentioned imperatives and comparing it with any other American business a new so called “Root Branch” corporate strategy is adopted for Infosys.

Root Branch corporate strategy

“Root: Being Honest & Being World Class

Branch: India focused , India diversified and global focused”( karki ,2004)

Picture model of Root Branch Strategy

Company – specific factors

Infosys ‘A’ Infosys ‘B’ Infosys ‘C’

Branch

Root

1. India Focused Being Honest 3. Global Focused

Being world class

2. India diversified

Industry specific factors

Strategy of Infosys

Root branch strategy is classified in three broad categories

Root: the first level response of the organisation to the commonalities in the evolutionary and emerging contexts & which are essential for the organisation. (karki,2004)

Branch: the second level response are the strategic directions o the contextual imperatives which an organisation should adopt to meet the requirements in an appropriate manner.(karki,2004)

Components based on organisations industry and company specific features. (Karki, 2004)

Root has two components

Being Honest in terms of customers by delivering fair products and services at the required time and in terms of employees by giving fair compensation rewarding achievements and contribution and meeting legitimate career aspirations which Infosys is pretty much following and known for its better employee satisfaction and in terms of investors Infosys should provide superior returns sharing all future plans and strategies with the stake holders better utilization of shareholders resources for better future profitability, and maintaining corporate governance effectively.( Karki, 2004) (Palepu and Khanna, 2001)

Being World class: The strategy component results from existing and emerging competitive reality and do the business of a growing Indian economy and to match the cost responsiveness factors as a global company by reaching scale economies and facing vest competition in the domestic market to step further to global markets.(karki,2004)

Branch has three aspects:

India Focused: This strategic direction is high for Infosys as India is emerging as a global economy and there still many grounds to be covered by Infosys at Indian level, 185 of Fortune 500 companies have already settle their offshore software development centres in India. (Palepu & Khanna, 2001) and still many more global organisations, Banks are willing to open their off shore centres in India seeking cheap Talent over there, Infosys should focus on Indian market and improve their market share in India as most of the Infosys revenues comes from software exports to U.S.

India Diversified: Many remarkable examples in India organisations can be seen in Diversification Tata’s, Reliance, Bharti group ,Aditya Birla group etc can be seen as success through diversification Infosys should focus on Diversify its business in India as India is highly populated market and a developing too, Infosys should go for software related diversify services such as Telecom operations etc. It can bring a larger market share as well as a bigger brand image for Infosys, diversification also provides ground for a company to compete in various markets and achieving scale economies and an ability to compete globally.

Global Focused: As India software industry is now recognized as a very highly reliable and value added product services globally,(Palepu & Khanna,2001) Infosys is known to be have some of the best software professionals globally seeking all these Infosys should come out with a strategy of a global brand by focusing on many other emerging economies such as Africa and Asia rather than keep focusing on U.S. as it may prove a mess later sometime if there is an economic crisis come in U.S same as in 1999 when NASDAQ falls. Infosys should also try to come out with its brand image as a truly India and a cheap talent company to boost up its revenue in global markets, for this Infosys should focus on appointing multi ethnic and multi cultural employees globally and some at very respective designations. To improve its brand image and globalisation Infosys should also focus on standardisation of its software products, which can be achieved by listing Infosys on various stock markets across the world and by penetrating new markets. (Karki,2004)(Palepu & Khanna, 2001)

Infosys BPO

The current wave of globalisation give shapes to various new forms of international trade & hence emerged with several new changes in which the talent can be mobilized & combined across national boundaries. Business process outsourcing has become one of the vital part of this trend of globalisation.

Infosys BPO is ranked as the 7th largest BPO industry in INDIA by NASSCOM [Bhargava,2007]. Some of the key consulting features which Infosys is providing in the form of BPO are mentioned as follows.

Infosys in communications

IPTV solutions

Billing support operations

Customer relationship management [CRM] tools

Data centres consolidation

Field optimization Tools

Mobile applications.

Revenue Assurance solutions. [Infosys]

IPTV Solutions: Infosys Modular content accelerator (MCA) solution for IPTV established an IPTV product innovation centre that served as an interface between the stakeholders in consumer marketing and IT. [Infosys]

Infosys MAC proved to be successful and accelerated the product development by 30%-40%

Offered a platform capability to launch rich content services by leveraging technology from a global network of third party component drivers.

Created a blue print for a rich set of product offerings to maximize customer revenue.[Infosys case study,2009]

Billing support operations:

Infosys BPO provides the client with a flexible platform, equipping them with an improved business process model. This has resulted in faster TURN AROUND TIME (TAT) and significant cost savings for the client/s.

Key features : BPO with offline helpdesk.

Better use of resources

Focus on providing process improvements : achieved by process automation and process re-engineering tools and techniques provided by Infosys.

Improve resource efficiency by eliminating repetitive manual tasks

Reduce user applications, backlogs, increase transparency.

Owing end to end process.[Infosys case study ]

CRM Tools:

Today CRM is the essential part of the communications industry. Infosys offers a wide range of services across major CRM products from structuring a road map to implementation and post product support .[Infosys]

CRM challenges:

Focus on new revenue markets

Complex pricing models

Increase channel efficiency

Focus on customer retention and churn to reward loyal customers and increase stickiness.

Product rationalization.

Cost cutting.

Infosys solutions:

Oracle Telco lab solutions by Infosys offers a pre integrated suite of offerings to leverage oracles comprehensive offerings for the telecom industry

A state of the art lab associated with the solution can incubate complex solutions concepts , model solutions to specific customer problems , showcase industry trends.[Infosys]

Telecom order management solutions(TOMS) tool by Infosys helps CSP’s in improving their efficiency in order management and increase revenues driven by changing customer needs.[Infosys]

End to End Boss Framework by Infosys helps CSP’s to enable rapid rollout of wholesale products, Intelligent order routing and order fallout management.[ Infosys]

iBillcare business platform solutions: helps CSP’s to focus on their core competencies with integrated applications , customer care and billing functions[Infosys]

Data Centre consolidation

Reduction in number of physical boxes by using virtualisation technology. (Infosys)

Reduction in complexity of managing servers.

Infosys solutions for data centre consolidation results in time management as well as the reduction in the costs to a much lower level. Which helps organisations to increase their efficiency and hence revenue.[Infosys]

Field optimization Tools.

Field optimization is the essential part in telecom organisations; Field optimization helps telcos to analyse the network problems and produce detailed reports on the basis of analysis, it helps telcos to improve the efficiency of their network, revenue and customer satisfaction.[Infosys]

Mobile applications

Various types of software applications are provided by Infosys to enhance features of mobiles and gain customer share in the market and increase revenue. [Infosys]

Infosys in Banking, finance and Insurance

Risk Management

Anti Money laundering services

Mobile banking

Portfolio management

Modernization by IT applications [Infosys]

Risk management

Infosys by its expert IT team made tools which helps in analysing markets for banking and financial organisations. The RMT helps in implementing and integrating process that analyse risk related data and predict liquidity.

Anti Money laundering services

Increasing crimes in banking and financial sector makes enormous demands for security of customer data. Infosys AML applications provides safeguard to many banking and financial organisations to safeguard their data and capital. [atul shukla]

Mobile Banking

Infosys Mobile banking applications helps banks to retain customer satisfaction as well as update the customer through SMS services about their banking details, Mobile banking provides flexibility ion the new age banking services.

Portfolio Management

Although Portfolio management is in practice by banking from decades but Infosys has give a solution inn PM by mixing it with IT. The IT portfolio management helps mangers to gain customers and analyze market data and provide best to the customers.(Infosys)