Infosys Technologies Ltd

Growing Share of a Customers Business

Group No- 3 Ankita Singh, Ashutosh Vikram, Avneesh Goel, V Aishwarya

Contents
Contents..................................................................................................................... 2 Background................................................................................................................. 3 Important Nos of Infosys..........................................................................................3 Four Phases of Development....................................................................................3 First Phase............................................................................................................... 3 Second Phase.......................................................................................................... 3 Third Phase............................................................................................................. 3 Fourth Phase........................................................................................................... 3 Issue........................................................................................................................... 3 Analysis....................................................................................................................... 4 Cost Saving Delivered to PFS...................................................................................4 Reengineering Project assignments.........................................................................4 Data Corruption prevention subroutine....................................................................5 Record Comparison Algorithm.................................................................................6 Reduction in Disability Reserves..............................................................................6 Knowledge Transfer Time Saving.............................................................................6 Recommendation for pitching Infosys .........................................................................7

Background Bangalore based company Infosys referred as Microsoft of India started in 1981. It is a company which provides a full range of IT and consulting services including the development, customization, Reengineering and maintenance of personal and network computing, mainframe and internet based information systems. Important Nos of Infosys 1. Annual Sales Rs. 35 billion 2. Net profit Rs. 9 billion 3. Employees- 17000 4. Development center in India- 816 5. Marketing office worldwide 24 Company is working on 9/35 *100 = 25.71% net profit. it is one of the best in Industry. Four Phases of Development Infosys has seen four phases of development each entailing a distinct market offering and value preposition. First Phase 1. Offshore outsourcing model 2. Playing the Global labor Arbitrage game 3. Benefited from the availability of low-cost and world class IT professional in India Second Phase 1. Maintenance contracts for legacy systems 2. Preventive and corrective software programming in the anticipation of Y2K 3. Allowed to gain a reputation for its programming capabilities. Third Phase 1. Redirected priorities towards the marketing of end to end solutions 2. Involved in consulting services such as design, customization, business process reengineering and installation 3. Involved in designing phase helped in understanding the system and maintain it with less effort and time Fourth Phase 1. Business model focused more on specific industries 2. Infosys seeks business domain excellence 3. Highly customized end to end solutions to a limited number of potentially high profit market segmented that have mission critical IT applications Issue 1. Only able to capture 1.38 billion Indian rupees out of PFS annual IT total spending 46 billion while Ideally Infosys can handle up to 45 % of the total spend. 2. Most of the project from PFS is low value added and price sensitive business 3. Infosys is not able to showcase other IT skills to PFS

Analysis Challenging issues related to global marketing Stiff competition from Excalibur and Merrimac: Infosys had been competing on cost advantage due to low cost labor as compared to other firms. However both its competitor has opened their center in Bangalore. As a result Infosys cannot fight battle only on cost advantage, it will have to offer better value proposition. No experience of end to end project solution: This project will help Infosys in establishing it in end to end and mission critical project segment. Thus this project is of great importance for Infosys, if they are able to pull it off, then they would be in advantageous position to gain a greater share of their more profitable, high value-added business. High risk involved: As stated above it is a very important project for Infosys. It is because of simple reason; company has had no experience in this particular field. If they fail to deliver high quality value, it would create a bad image for Infosys. Thus company needs to keep this project at high priority. Cost reduction initiative by PFS: Due to cash crunch situation in organization, company is looking for a project that would deliver high quality at a low price. Demonstration capabilities: Infosys has to effectively show that their people can diligently and rigorously gather, document and analyse such complex and on-going data. Infosys also has to demonstrate that they can handle such a large scale project.

Cost Saving Delivered to PFS Cost saving delivered by Infosys to PFS was in the following areas Reengineering Project assignments Re-Engineering Project Assignments Cost of Fulltime Equivalent (US) Cost of Fulltime Equivalent (India) Before Infosys No of US personnel Total cost annual Total cost in 5 years After Infosys 3rd year No of US Personnel No of India Personnel 96000 38400 250 24000000 120000000 75 250

Total cost annual Savings for No of years Total savings delivered After Infosys 4th and 5th year No of US Personnel No of India Personnel Total cost Savings for No of years Total savings delivered Total savings delivered over 5 years

16800000 7200000 1 7200000

75 100 11040000 12960000 2 25920000 33120000

Data Corruption prevention subroutine Data Corruption Prevention Subroutine No of Corruption incidents per year Reconstituting cost savings personnel Involved No of hours Per hour rate in $ Annual savings Technical support savings personnel Involved No of hours Per hour rate in $ Annual savings Resource idling cost savings personnel Involved No of hours Per hour rate in $ Annual savings

24

3 4 45 12960

1 1 40 960

125 4 42 504000

Total annual savings Record Comparison Algorithm Record Comparison Algorithm CPU time saved in hours Savings per month Annual Savings Reduction in Disability Reserves Reduction in Disability Claims Reserves Savings in cash to be held Cost of capital Savings realized

517920

8 3600 43200

14 mn 10% 1.4mn

Knowledge Transfer Time Saving Knowledge Transfer Time Savings No of programmers No of months Per month cost Total Savings 5 3 8000 120000

How can Infosys PFS Account Team persuasively sell the firms ability to deliver a superior endto-end solution for the Ariba e-Procurement System project? Service marketing has always been about customization of the product and services that are provided by the vendor to the buyer. Key account management makes a better delivery model. Delivering value through key account management: 1. Understanding each customers need and then anticipate it later 2. Explore various sources of risks 3. If possible develop appropriate strategy for each customer 4. Keep track of progress of both development and maintenance of projects of key accounts 5. All key accounts should be prioritized on the basis of revenues, future profit etc It makes sense to concentrate more on those individual key customers. Infosys treated PFS as a key account. Infosys treated PFS as a partner in its business rather than just a plain customer.

Recommendation for pitching Infosys Pitch can revolve around following points Significant account experience with 65 contracts Latent knowledge in company about PFS business processes Ahead in the learning curve demonstrate capabilities of high value resources during recent client visit Demonstrate technological expertise of Ariba with best resources of the company perhaps with a prototype Demonstrated business process improvements reduction in disability claim reserves Proven track record of pro-active diagnosis and resolution of issues