APSL PROJECT

Group 8:
Veena Gumma
Senthil K Krishnan
Stalin Moolamkaden
Suresh B.V
Sanjeev K Gupta

Infosys Technologies
Limited

Agenda

1
2
3
4
5

IT Industry
Evolution
IT Industry
Growth

Major Players

Infosys History
and Evolution
Infosys
Business

6
7

Infosys - SWOT
Financials and
Key Ratios
Comparison

8
9

Revenue and
LOB wise
Performance

10

Our
Observations

Client Breadth /
M&A

11
12
13
14
15

Infosys 3.0
Our
Observations
and Challenges
to Infosys
New Strategy

New Strategy
Execution

At the Bourses

Disclaimer

All the data presented here is extracted from secondary

sources of information internet, print media, and
corporate annual reports.
Any misrepresentation is fully coincidental.

IT Services Industry Evolution (Contd..)

1950 1965
~100,000
Devices
000s of
Applns.
Millions of
users

1965 1980
~10 million
Devices
000s of
Applns 10s of
millions of
users

Mini
Computin
g
Mainfram

SMAC/ IoT

PC &
Client/Serv
er

1980 1995
~100 million
Devices
10,000s of
Applications
100s of
millions of
users

Internet
(Web)

1995 2010
~1 billion
Devices
100,000s of
Applications
Billions of
users

2010 2025 ?
~10s of
billions
Devices
Millions of
Applications
Billions of
users

IT Services Industry Evolution

Pre Digital Era

Digital Era

Post Digital Era

1) ITbecomesabusinessenabler
1) ITbecomesa
-ITshiftsfromtheCIOtothe
strategicfunctionin
CFO/CMO
1) IThousedinsmall,internal
leadingenterprises
2) EnterprisescanuseITto
teamswithinenterprises
2) Outsourcingandoffemergeasleadersinthe
Information 2) ITisseenmainlyasa
shoringbecomethe
marketplace,Businessmodels,
supportfunction.Computing
buzzwords;theera
Technology
operationalprocesses,andIT
powerisscarce,and
seestheriseoflarge
ecosystemswillchangeto
extremelyexpensive
IT-BPOplayerslike
reflectthenewgroundrealities
IBM,Accentureand
InformationTechnology
TCS
Innovation
1) PCsemergedastheprimary1) Theemergenceofthe
1) The convergence of social
disruptivetechnologyofthis
internetwasthe
media, mobility, analytics
era.Itreducedthecostof
foundationupon
and cloud (SMAC) will drive
computingdrastically,and
whichthedigitalera
the next generation of
Disruptive
madeitaffordablefor
wasbased
innovations
enterprises
2) Thespreadofmobile
Technologie
2) Moreover, the increasing
2) Theemergenceofdigital
communication
s
spread of these
devicesacrossthespectrum
networks,aswellas
technologies to people
laiddownthewayforthe
affordablecomputing
across the world is bridging
digitalera
poweraddedtothe
the digital divide.
tofollow
digitalage

IT Services Industry Growth

Exportsgrowing
consistently.
Growthratehas
whittleddown

https://ict4dblog.wordpress.com/2015/04/28/indian-itsoftware-sector-statistics-1980-2015-time-series-data/

IT Services Industry Growth (Contd..)

Industryis
primarilyexport
oriented.
ArbitrageModel

https://ict4dblog.wordpress.com/2015/04/28/indian-itsoftware-sector-statistics-1980-2015-time-series-data/

Indian Software Services Exports Split

https://rbi.org.in/scripts/BS_ViewBulletin.aspx?Id=15452#C1

Top 5 Players in IT & ITES Sectors

Company Name

Business Interests

Revenue

BPO Revenue

Tata Consultancy
Services

Information Technology & Business Process Outsourcing

$6.3 bn

Infosys

Information Technology & Business Process Outsourcing

$4.8 bn

$294 mn

Wipro

Information Technology, Healthcare, Consumer care,

lighting & Engineering

$4.3 bn

$465 mn

Cognizant India

Consulting & IT related Solutions and Business Process

Outsourcing

$3.3 bn

$200 mn

Genpact
(formerly GE Capital
International Services)

Business Process Outsourcing (Operates from India,

China, Guatemala, Hungary, Mexico, Morocco, the
philippines, Poland, Romania, Spain, South Africa, &
United States) IT Partners: Mastek & Netsuite

$1,120 mn

5 Forces Analysis

Fromahandfulofcompaniesin1980s,
todaytherearemorethan10,000ITES
companies.
IntensecompetitioninlowendITES
sector.
Lesscompetitioninhighendsector

Bargaining
Power of
Suppliers

Threat of
new
Entrants

HighThreatfromNewEntrantsforold
Technologies,andLowThreatfornew
tech.andcomplexLOBs

NicheProductshavelowthreatsfrom
newentrants.

Bargaining
Power of
Buyers

Intensity
of
Rivalry

SpiralingResourceCostleadingtomargin
pressure
Highattrition.
Highdemandandlackofgooddeployable
manpowerhasincreasedthecost
SoftwareSuppliershavelessbargaining
powerastheyareincentivizedbyselling
throughInfosys

Threat of
New
Substitutes

Fortraditionaltechnologiesinnon
complexsegments,Buyershavehigh
BargainingPower
ForcomplexLOBs/newtechnologies,
Buyershavelowbargainingpower.

Beingaglobalvillage,threatsfromnew
innovations/productstocompanys
ownproducts/services

Infosys - Evolution
2002

Touches revenues of US$ 500 million

Nandan M. Nilekani takes over as CEO from N.R. Narayana Murthy, who is
appointed Chairman and Chief Mentor
Launches Progeon, offering business process outsourcing services

2001

Touches revenues of US$ 400 million. Opens offices in UAE and Argentina, and a
development center in Japan

2000

Touches revenues of US$ 200 million

1999

Touches revenues of US$ 100 million. Listed on NASDAQ

Opens offices in Germany, Sweden, Belgium, Australia, and two development
centers in the US
Infosys Business Consulting Services is launched

1995

Opens first European office in the UK and global development centers at Toronto
and Mangalore. Sets up e-Business practice

1993

Introduces Employee Stock Options (ESOP) program

Goes public

1987

Opens first international office in Boston, US

1981

Infosys is established by N. R. Narayana Murthy and six engineers in Pune,

India, with an initial capital of US$ 250
Signs up its first client, Data Basics Corporation, in New York

Evolution (Contd.)
2015

Infosys acquired Skava, a Leading Provider of Digital Experience Solutions for the Retail
Industry
Infosys acquired Panaya, Inc., a leading provider of automation technology for large
scale enterprise software management

2014

Dr. Vishal Sikka takes over as the CEO and MD from S.D. Shibulal

2012

Infosys acquires Lodestone Holding AG, a leading management consultancy based in

Switzerland
Forbes ranks Infosys among the world's most innovative companies

2011

K.V. Kamath takes over chairmanship from N. R. Narayana Murthy

S.D. Shibulal, COO, takes over as the CEO and MD from Kris Gopalakrishnan
Infosys crosses US$ 6 billion revenue mark, employee strength grows to over 125,000

2010

Infosys crosses the US$ 5 billion revenue mark

2007

Kris Gopalakrishnan, COO, takes over as CEO. Nandan M. Nilekani is appointed CoChairman of the Board of Directors

2006

Annual revenues double to $ 2 billion. It took 23 years to reach first billion, only 23
months to reach next billion in revenues

2005

Records the largest international equity offering of US$ 1 billion from India
Selected to the Global MAKE Hall of Fame

Vision & Mission

Vision: Tobeagloballyrespectedcorporationthatprovidesbest-of-breedbusiness
solutions,leveragingtechnology,deliveredbybest-in-classpeople.
Mission: Toachieveourobjectivesinanenvironmentoffairness,honesty,andcourtesy
towardsourclients,employees,vendorsandsocietyatlarge.

Competitive Advantages

CostLeadership
SuperiorInnovation
CustomerResponsivemodel
SuperiorQualityAssurance
LocationAdvantage(AdvantageIndia)

Business Level Strategy

Cost Leadership for Low end , Staple technologies
Differentiation for high end technologies,
Products, etc.

Corporate Level Strategy

Related Diversification

Critical Success Factors

Low Cost
High Quality
Leverage Innovative Technologies
Fast Turnaround Time
Breadth of Technologies

Value Chain Analysis

FirmInfrastructure:FinancialandAccountingSystems,Legal
Services,QualityAssuranceFrameworks
HumanResourceManagement:ResourceRetention,Training,R&D,
CapabilityBuilding

Procurement:Recruitment,SoftwareProcurementfromPrincipals
Software
Design and
Development
Testing

Research
&
Developm
ent

Software
Packagin
g and
Delivery

Marketing Custome
and Sales r Service
Relations
hips with
clients
and
Suppliers

MARGIN

TechnologyDevelopment:ProductDevelopment,Process
Development,Frameworks,andPlatforms

Infosys Service Lines

Consultancy : Infosys Global

Consulting

Global Delivery

Products

Platforms

BPO Infosys BPO

Segments

Financial Services

Manufacturing

Retail, CPG and Logistics

Energy, Utilities, Communication and Services

Life Sciences, Healthcare and Insurance

Competition
ForInfosysGlobalConsulting:
ConsultingfirmssuchasAccentureLimited,AtosOriginS.A.,
CapgeminiS.A.,andDeloitteConsulting
DivisionsoflargemultinationaltechnologyfirmssuchasHPandIBM
GlobalDelivery:
ITConsultingfirmssuchasCSCandDellPerotSystems
OffshoreTechnologyfirmssuchasCTS,TCS,HCL,Wipro,
Platforms :
Software firms such as Oracle and SAP AG
Products :
Finnacle, EdgeVerve : Oracle, TCS
BPO : HCL BPO, Genpact, EXL holdings, WNS Global Services, etc.

SWOT

WellDiversifiedinITSolutions,Consultancy,etc.
Breadthofofferings
QualityandProcessexecution
Investmentintrainingandcultureoflearning
IPinplatformsandproducts
Deepclientrelationshipandbrand
Experienceandexpertiseinlargescaleoutsourcing
VerygoodexperienceindeliveringrangeofIT
Emergenceofnewtechnologies
Solutions
Opportunitytoradiatetoexistinghugeclientbase
forrepeatbuy
Penetratetonewgeographies
MarketEvolutionleadingtonewcustomerneeds

Highattrition
IncreasingresourceCosts
EmployeesnothappywithHRPolicies
ScopeforlittleCompetitiveAdvantage

CommoditizationofITServices
ShortLifecycleofindustry
Competitionfromsmallernicheorganizationsand
Startups
VISASanctions

Infosys 3.0 (Building Tomorrows Enterprise)

Thecompanywillnotmerelyprovidesoftwareservicesandsolutions

Infosysaimstotransformintoabusinesssolutionsprovider.

Focusingonnewsolutions,likecloudcomputing,MobilityandSustainability,basedon
currentmarketneeds.

Ithasgroupsprovidinglearningsolutionsandbusinessplatformsolutions.Thesealongwith
countryfocusedteamsarethemainenginesforfuturegrowth,Infosyshassaidearlier.

Consolidatedintofourverticals--FinancialServices&Insurance;Manufacturing;Energy,
Utilities,CommunicationsandServices;andRetail,LogisticsandLifeScience.

Italsohasanothervertical,InfosysPublicServicesubsidiary.

Groupedintothreegroups--BusinessTransformation(consultingwork,systemsintegration,
enterprisesolutionsetc.);BusinessOperations(applicationdevelopment,maintenance,
infrastructuremanagementetc.);BusinessInnovation(products,platformsandsolutions).
Thesewillbefocusareas.

Financials Comparison Balance Sheet

BALANCE
SHEET

INFOSYS
(AmountinINR
CRORES)
2015 2014 2013

TCS

COGNIZANT

(AmountinINR
CRORES)
2015 2014 2013

(Amountin'000USD)
2014
2013 2012

LIABILITIES

TOTAL STOCKHOLDER'S 48,06

6,135,79 4,854,38
EQUITY
8
42,092 36,059 50,635 49,195 38,646 7,740,218
1
3

NON CURRENT

LIABILITIES
30
364
176
1,580
1,565
1,162 1,386,604 224,419 289,858

13,71
1,774,50 1,377,33
CURRENT LIABILITIES
5
10,256 6,793 20,318 15,670 11,665 2,592,094
8
0

61,81

8,134,71 6,521,57
**-USD/INRconversion-62
TOTAL
LIABILITIES
3
52,712 43,028 73,661 67,138 52,168 11,718,916
8
1

Financials Comparison P&L

INFOSYS

TCS

COGNIZANT

(AmountinINR
CRORES)
2015 2014 2013

(AmountinINR
CRORES)
2015 2014 2013

(Amountin'000USD)
2014
2013 2012

PROFIT & LOSS

REVENUE FROM
OPERATIONS
OTHER INCOME

47,300

3,337

44,341 36,765 94,648 81,809

2,576
2,215
3,230
1,637

TOTAL INCOME

50,637 46,917

38,980 97,878 83,446

EXPENSES

34,251 32,915

26,706 72,070 58,044

PBT
16,798 14,002
**-USD/INRconversion-62

12,357 26,298 25,402

PAT

12,164 10,194 9,116 19,852 19,164

7,346,47
62,989 10,262,6818,843,189
2

1,178
39,153
10,007 26,100

7,372,57
64,168 10,301,8348,853,196
2

5,984,97
46,078 8,377,803 7,165,279
6

1,387,59
18,090 1,924,031 1,687,917
6

1,051,26
13,917 1,439,267 1,228,578
3

Financials Comparison Key Ratios

Debt-equity ratio

INFOSYS
2015 2014
2013
-

Current Ratio

3.12

Cash ratio

Revenue Growth (%)

PAT growth (%)
EBIT Margin (%)
NPM (PAT / Revenue) (%)
Curr. Assets / Total Assets
(%)

TCS

COGNIZANT
2014
2013

2015

2014

0.01

0.01

0.12

2.40

2.74

2.60

3.46

3.83

4.82

1.96

7.93
19.33
35.51
25.72

2.16

20.36
11.83
31.58
22.99

2.98

9.38
9.41
33.61
24.80

0.92

17.30
3.59
27.79
20.97

0.93

30.04
37.70
31.05
23.43

1.21

16.36
17.15
18.75
14.02

1.39

20.08
16.87
19.09
13.89

69.16

105.91
25.31
19.68

74.44

76.09

66.27

63.90

57.60

75.58

EPS
89.20
78.78
101.35
97.84
2.35
ROE (%)
24.22
25.28
39.21
38.96
20.74
ROA (%)
19.34
21.19
26.95
28.54
14.44
Employee Cost / Revenues
(%)
53.10 54.92
54.21
53.80
49.49
NA
ROCE
(%)
34.92 32.98
34.10
49.30
49.36
21.08
ZeroDebt,Low
Revenue Growth,
Moderate
Asset Turnover,
Low
ROE and
Low
Asset
TurnOver
1.12
1.21
1.16 Cash..??
1.64
1.68
1.03
ROCE,
HighCashRatio,HighCurrentRatio.Idle

2.02
22.36
16.68
NA
26.54
1.2

Client breadth - TCS

714

>1miln.
354
389

>5miln.

53
68

>50miln.
24
29

0
2014

100

200

2014

1700 1512
No. of total
clients
No.ofclientsineachrevenuebucket
hasbeenincreasingatleastby10-20
%
Constantemphasisonclientradiation
No.ofClients13%

136
162

>20miln.

2015

201
5

231
261

>10miln.

>$100miln.

791

300

400

500

600

No. of Clients in the revenue bucket

700

800

900

Client breadth - Infosys

>$300miln0

>$200miln

3
4

>$100miln
>$75miln
>$50miln

13
15
24
29
42
47

2014

No. of total clients

950

890

Consolidated
revenues from
repeat business

97.8
%

97.7%

New clients added

221

238

78
83

>$25miln

2015

148
159

>$10miln

232
244

>$5miln

No.ofclientsineachrevenuebuckethas
beenincreasingmax.by10%
Needsmorerigoronclientradiation
No.ofClients6%
Needsemphasistoconsolidatebig
clientsandonrepeatbusiness(Renew&
New)
501

>$1miln
0
2015

100
2014

200

300

400

No. of Clients in the revenue bucket

500

529

600

Revenues Segment wise

TCS

INFOSYS

24%

41%

12%
14%

18%

10%

6%
34%

21%
22%

BFSI

MFG

Retail/CPG

TelcoMediaEnttmt

20%
26%

Others

12%

FSI

42%

COGNIZANT
FIN SVCS
HEALTHCARE
MFG/RETAIL/LOGISTICS

MFG

ECS

RCI

FocusingontherightLOBswrt
competition
SignificantScopeforgrowthin
FSIandHealthcare
Healthcaredominatedby
Cognizant

Revenues Geography wise

TCS

INFOSYS
6%
9%

2% 2%
2%

52%

12%

12%

24%

62%

17%

NorthAmerica
UK

8%

NA
India

5%

11%

77%

COGNIZAN
T

NA UK RoE RoW

Europe
RoW

NAyieldsmaximumrevenues.
CognizantisaNAbasedorgn,
hencethefocusonNA
NeedstoderiskitselflikeTCS

TCS M&A
Year Target

20142015

20132014

Targets Details

Benefits to Acquirer

ITFbringsitslongstandingrelationshipswith
Japanesecorporations,talentedworkforceand
competenciesinindustrieslikeretail,
MCoperatesbusinessinarangeofindustriesincluding
distributionandtrading.Thiswillcomplement
industrialfinance,energy,metals,machinery,chemicals,
Mitsubishi
TCSdeepdomainknowledge,technology
foods,andenvironmentalbusiness.MCscurrentactivities
Corporation
expertiseandstrongexecutiontrackrecord.
areexpandingfarbeyonditstraditionaltradingoperations
sITFrontier
TCSGlobalNetworkDeliveryModel(GNDM TM)
asitsdiversebusinessrangesfromnaturalresources
Corporation
capabilitieswillalsoenabletheJapanese
developmenttoinvestmentinretailbusiness,
corporationsglobalizationambitions.The
infrastructure,financialproductsandmanufacturingof
companywillprovidetremendousadditional
industrialgoods.
valuetoclientsinJapan;whileemployeeswill
securetheadvantagesofbuildingtheircareers
inaglobalorganization.
StrengthenedTCSabilityandfootprintto
serviceitscustomersinFranceandother
FrenchIT
Regardedasoneofthetopfivesystemintegrator
regions,leveragingitsstrongtalentpool.The
services
companiesinFrancewithleadingFrenchcorporationsintheacquisitionhasalsobroughtitsseven
company
banking,financialservices&insurance,energy&utilities, subsidiariesnamely,PlanaxisTechnologies
AltiS.A.
retail&CPG,manufacturingandlifesciencesectorsasits Inc.,AltiHRS.A.S.,AltiInfrastructures
(Alti),
keycustomers
Systemes&ReseauxS.A.S.,AltiNV,TESCOM
(France)SoftwareSystemsTestingS.A.R.L.,Alti
SwitzerlandS.A.andTeamlinkintoTCSfold.

Cognizant M&A
TriZetto
2014
Cadient
GroupInc.
2014
itaas
2014
Odecee
2014

2013

Equinox
Consulting

LeadingproviderofhealthcareITsoftwareandsolutions.
TriZettoworkswithsome245,000providersandabout350
payers,andtouches180millioncoveredlivesintheU.S

Provideanewvertically-integratedservice
modelforthehealthcaresector

Full-ServiceDigitalandMulti-ChannelMarketing
OfferingsWillEnablePharmaceutical,Biotech,
Full-servicedigitalmarketingagencyservingcompaniesinthe
ConsumerHealth,andMedicalDevice
pharmaceutical,biotechnology,consumerhealth,andmedical
CompaniestoEnhanceTime-to-Market,Drive
deviceindustries.
Growth,andProvideCompellingCustomer
Experiences.
allowsustoofferabroaderrangeofdigital
videoservices
U.S.-baseddigitalvideosolutionscompany
forclientsinthecable,telecommunicationsand
high-technologyindustries
ProviderofdigitalsolutionstobusinessesintheAustralia-New StrategicAcquisitiontoExpandCognizant's
Zealandregionwithexpertiseindeliveringleading-edge
DigitalTransformationPortfolioandCapabilities
insurance,healthcare,logisticsandcommunicationssectors
toHelpClientsCreateDigitalEnterprises
providesbusinessconsultingservicestoinvestmentbanking,
assetmanagement,retailbanking,insuranceandspecialized
financialservicesclients.Wellknownforitsregulatory
Strengthentheirintegratedofferingforfinancial
consultingexpertise,aessentialskillgiventodaysfastservicesclientsandourpresenceinEurope.
changingregulatorylandscape,aswellasstrategyconsulting,
organizationandoperationsmanagement,change
managementandHRconsulting.

Six
2013 companiesof ConsultingandITservicesfirmbasedinHamburg,Germany
theC1Group

HelpedexpandfootprintinEurope,addeddepth
toManufacturing/Logistics,Energy/Utilitiesand
Financialpractices,andenhancedEnterprise
ApplicationServices(specificallySAPservices)
andhigh-endtestingcapabilities.

Notechnicalinnovationsinlast23years
M&Apickedupinthelast1year
only
Tohelpclientsbringnewdigital
experiencestotheircustomers
LeadingProviderofdigitalexperiencesolutions throughIP-ledtechnology
2014-2015 Skava
includingmobilecommerceandin-store
offerings,newautomationtools
shoppingexperiencetolargeretailcorporations andunparalleledskilland
expertiseinthesenewemerging
areas.
SignificantlyenhancesautomationcapabilitiesinThisenablesgettingcustomersin
2014-2015 Panaya
packagedsoftwareofferings
highaccountmargin
DevelopandCommercializeimage
generationtechnologyinorderto
providedend-to-enddigital
Acquired20%in AmericananimationstudiobasedinGlendale,
manufacturingcapabilitiesfor
2014-2015 Dreamworks
Californiathatcreatesanimatedfeaturefilms,
companiesinvolvedindesign,
Animation(DWA) televisionprogramsandonlinevirtualworlds
manufacturing,marketingand
distributionofphysicalconsumer
products
Strengthensthemanagement
consultingcapabilitiesglobally
BeingaManagementConsultancyfirm,
andexpandsitspresencein
Lodestoneadvisesinternationalcompanieson
Lodestone
continentalEurope.Thisadds
2012-13
strategyandprocessoptimization,andprovides
ConsultingAG
morethan750experienced
businesstransformationsolutionsenabledby
consultantsand200clientsin
SAP
industriessuchasMFG,
automotiveandLSH.

Infosys M&A

Board Of Directors
CEO and MD
COO

Dr.VishalSikka
PravinRao

Chairman of
the Board

RSeshasayee

Independent
Director
Independent
Director

Prof.JohnW.
Etchemendy
CarolM.Browner

Independent
Director

RoopaKudva

Independent
Director

Prof.JeffreySean
Lehman

Independent
Director

RaviVenkatesan

Nosignificanttech.innovators

ReputedCA,FormerCIIPresident,MD/EDatAshokLeyland,Chairman,
IndusIndbank&HindujaGroup,ChairmanatNIT,TandIIT,Designand
Mfg.
ProvostofStanfordUniversity,FacultyatPrincetonUniversityfor2
years
AssociatedwithWhiteHouseandObamaAdmin,ClintonAdmin.
GraduatedfromUniversityofFlorida
IIMAAlumni,ExCRISIL,ExMemberofECofNASSCOM,AmongPowerful
Bizwomen,MemberofSeveralPolicylevelcommitteeesofSEBI
VC,NYUShanghai.Deanofseveraluniversities,Professoroflawand
lawclerkforseveralUSCourts
ServedaspresidentoftheAmericanLawDeansAssociation,aschairof
theboardofInternet2,andasamemberoftheboardsoftrusteesof
theConsortiumonFinancingHigherEducation,theSkaddenFellowship
Foundation,andtheAsianUniversityforWomenSupportFoundation.
GlobalAlumniBoardofHarvardBusinessSchool,andofMarico
InnovationFoundation.
ExChairmanofMicrosoftIndia,which,underhisleadership,became
Microsoft'ssecondlargestandoneofitsfastestgrowinggeographies.
ExChairmanofCummins
IIT(Mechanical)Alumni,AlumniofPurdueUniversity,MBA,Harvard

Investment in Training and R&D

TRAINING

201
5

2014

Million Person
Days

3.36

2.13

R & D Expenditure / Total Revenue

(%)
INFOSYS
TCS

Leantowardscooperativeinnovations
TieupwithVCs
Productsrequiringhigherexpenditure/higher
risk
GravitatetowardsM&Abeinginhighgrowth
industry

EmployeeEmpowerment
Buildingcapabilityofemployees
CreatingmoreInfosysambassadors

2015

2014

2013

1.3

2.0

2.5

1.48

1.26

1.11

Restructuring

Neededspecialimpetuson
EmergingTechnologies
BAUbusinessrequiredfor
sustainability

TCS-reorganisedthecompanyintosmallerunitsof$250millioneach.Inallthesecases,therestructuring
wasdonetomaketheindividualpartsgrowfaster.

Cognizant-Horizon3.Itclearlydefinedthecontoursofeachsetofbusinessunits.
Horizon1wasaboutitscorebusinesssuchasapplicationdevelopmentandmaintenancewhich
contributedmostofitsrevenuesheadedbyGordonCoburn.
Horizon2wasaboutemergingbusinessesthatithadenteredinthelastthree-fouryearsheadedby
RajeevMehtaandChandrasekaran.
Horizon3wasaboutnewtechnologiesthatwoulddriveitsfuturegrowthheadedbyDSouza.
Theresponsibilitieswereclear.

Infosys3.0wasaboutbuildingtomorrowsenterprise.ItssalesteamwasaskedtopursueInfosys3.0
opportunities(ofcreatingtomorrowsenterprise),aswellasmakethesalesinexistingbusinesses
(maintenance,testingandbusinessprocessoutsourcing).In2011,whilehewasstillaCOO,Shibulal
explainedthistoanalystsintermsofamatrixorganization,inwhichthesalesteamwouldfindabalance
betweenscalinguptheexistingbusinessesevenwhilesellingthevisionofthefuture.Thenumbersshow
thesalesteamwasgettingcarriedawaywith3.0.Asaresult,itwaslosingitsedgeincoremarkets.

Our Observations
1)

Infosysoperatesinanindustrywithshortlifecycleandveryrapidchange

2)

LowRevenueGrowthin2015
GoodonPATGrowth
IdleCash
VeryConservativeontheM&Afront
Clientbreadthgrowthlow(6%)visavisTCS(12%)

3)
4)
5)
6)

12)

FocushasbeenononlyfewmarketslikeCognizant.
Infosys3.0wasgoodbutnotimplementedproperly
AdherencetoCorporateGovernancehasdeclined
SignificantScopeforgrowthinFSIandHealthcare
LowROEandLowROCE
HighAttrition(>22%)

13)

EveryFounderneednotbeCEOinapubliclistedcompany.

7)
8)
9)
10)
11)

Challenges facing Infosys (as at 2014 end)

1)
2)
3)

4)
5)
6)
7)
8)
9)
10)

ExodusofSeniorleadership
SustainableGrowthModel
Nurtureanewsetofleaders-Infosyslostatleast12seniorexecutivesintherun
uptotheappointmentofnewCEO.Someofthosethatleftwereboardmembers
whoweretalentedenoughrunthecompanythemselves.
Needtobecomemorecompetitiveatbaggingbig,low-margindeals
Raiseitsgovernanceanddisclosurelevels
Slowrevenuegrowth
HighEmployeeAttrition/LowEmployeeMorale
Lackoffocusonemergingtechnologies
Lackofaggression
Infosys3.0StrategyImplementation

Activity System Map

Analysis & Recommendations

1)
2)
3)
4)
5)
6)
7)
8)
9)

Markethasmovedrapidlyontechnologies.InfosystocatchuponSMACandIoT.
NeedstoexpandintomoregeographieslikeAPACandLatAm.
Marketneedshavesignificantlychanged.Itstartedwitharbitrageasthepivotal
model.ServiceandProductDifferentiationisthefuelforgrowth.
AdherencetoCorporateGovernancehasdeclined.
NeedtoexpandfootprintintoAPAC,LatinAmericatodesriskitself.
DoweneedtohavesometechnocratsinitsBoD?
NeedstoderiskitselflikeTCS
Needsmorerigoronclientradiation.No.ofClientsincreasedby6%,whereasfor
TCStheygrewbyalmost15-20%
Needsemphasistoconsolidatebigclientsandonrepeatbusiness(Renew&New)

Growth
ImpetustoM
&A
Innovations
New
Geographies
LatAm,APAC
Client
Radiation

HR
Strategies
Extensive
Training
Culture
requiredfor
breeding
disruptive
technologies

Technical
Strategy
Emphasison
SMAC
Emphasison
IoT
Products

Domain
Strategy

New Strategy Renew and New

Differentiatesolutionandserviceofferings

Pursuestrategicalliancesandacquisitions

Builddeepandimpactfulclientrelationships

Buildaculturewithinthecompanythatdeliversinnovationtoclients
Attractandretainaglobal,diverse,motivatedandhighperformanceemployee
base
Enhanceoperationaleffectivenessforagilityandcost

Strategy Execution

Blogs,TownHalls,
Yammer

Employe
e
Connect
Promotions
Boost
Seniors

Connect
with VCs

INFY
Growth

DressCode
relaxation,
Moreengagedin
decisionmaking

Promote
Engineer
s

SiliconValleyBase.
EyeforInnovationsand
newacquisitions
Client
Relation
-ships

ClientPartners,
RENEWANDNEW

Q1 FY 2016 Performance

Q1 FY 2016 Performance

Q1revenuegrowthhighestin15quarters*

Volumegrowthhighestin19quarters

Grossclientadditionat79

6largedealssignedinQ1withTCVof$688mn

Quarterlyannualizedattritionat14.2%comparedto23.4%inQ115

Utilization(excludingtrainees)expanded160bpsto80.2%

At the Indian bourses

Moneycontrol.com:
Stock has been on a high during the latter half of 2015 and thereafter

References
http://articles.economictimes.indiatimes.com/2015-02-23/news/59423132_1_ceo-vishal-sikka-new-infosys-michaelreh
http://www.moneycontrol.com/news/business/what-is-infosys-30-strategy_887924.html?utm_source=ref_article
http://www.forbes.com/sites/saritharai/2015/06/25/infosys-ceo-vishal-sikka-on-the-end-of-indias-it-miracle/
www.nasscom.in
www.Infosys.com
www.infosys.com
www.tcs.com
www.wipro.com
www.cognizant.com
http://www.aogr.com/web-exclusives/exclusive-story/trends-reflect-evolving-industry-needs-challenges
http://iosrjournals.org/iosr-jbm/papers/Vol16-issue5/Version-1/F016513340.pdf
https://www.morganstanley.com/views/perspectives/cloud_computing.pdf
http://dirp3.pids.gov.ph/webportal/CDN/PUBLICATIONS/pidsdps1536.pdf
http://www.moneycontrol.com/news/business/what-is-infosys-30-strategy_887924.html?utm_source=ref_article
http://articles.economictimes.indiatimes.com/2015-07-21/news/64683432_1_infosys-attrition-ceo-vishal-sikkaattrition-rate
http://www.business-standard.com/article/companies/looking-at-panaya-like-acquisitions-says-sikka115030600025_1.html
http://www.business-standard.com/article/companies/infosys-aims-to-increase-revenue-per-employee-in-next-2-yrs114111201069_1.html
https://rbi.org.in/scripts/BS_ViewBulletin.aspx?Id=15452
http://financials.morningstar.com/ratios/r.html?t=CTSH
https://rbi.org.in/scripts/BS_ViewBulletin.aspx?Id=15452#C1
http://www.livemint.com/Industry/FXPE2yjjVrknGT3uJr33HP/SMAC-is-the-new-flavour-of-IT-services-companies.html

References (Contd..)
http://profit.ndtv.com/news/market/article-shareholder-activism-will-infosys-shareholders-take-lead-303719
http://www.infosys.com/about/management-profiles/
http://www.iimahd.ernet.in/~subhash/pdfs/Indian%20software%20industry.pdf
http://forbesindia.com/printcontent/35299
http://www.moneycontrol.com/news/business/what-is-infosys-30-strategy_887924.html
http://www.rediff.com/business/slide-show/slide-show-1-tech-what-is-infosys-version-3-point-0-and-how-it-willcompete/20110603.htm#7
http://www.slideshare.net/ArunPrakash21/44228677-strategicmanagementatinfosysbusinessstrategy
http://www.business-standard.com/article/companies/rejig-at-infosys-to-push-ceo-s-strategy-115020600027_1.html
http://www.infosys.com/investors/reports-filings/quarterly-results/2015-2016/q1/Documents/IFRS-USD-pressrelease.pdf
http://www.indiafinancenews.com/vishal-sikkas-5-point-strategy-a-hit-at-infosys/
http://in.reuters.com/article/2014/09/24/infosys-ceo-sikka-strategy-talent-idINKCN0HI2GU20140924
http://articles.economictimes.indiatimes.com/2015-03-04/news/59767040_1_vishal-sikka-hr-head-srikantanmoorthy
http://timesofindia.indiatimes.com/tech/tech-news/Vishal-Sikka-led-Infosys-writes-a-fresh-code-ofculture/articleshow/48352928.cms
http://www.infosys.com/investors/reports-filings/quarterly-results/2015-2016/q1/Documents/IFRS-USD-pressrelease.pdf
http://articles.economictimes.indiatimes.com/2014-08-18/news/52941915_1_vishal-sikka-bluefin-solutions-johnappleby
http://economictimes.indiatimes.com/tech/ites/vishal-sikka-to-monitor-team-for-managing-top-15-customeraccounts-at-infosys/articleshow/47476424.cms
http://economictimes.indiatimes.com/tech/ites/vishal-sikka-says-infosys-to-beat-industry-growth-rate-in-18-30months/articleshow/45929084.cms
http://www.thehindubusinessline.com/info-tech/infosys-changes-strategy-to-train-workers-in-designthinking/article7275444.ece

References (Contd..)
http://stockshastra.moneyworks4me.com/it-sector-analysis-and-review-of-indian-economy/-OVERALLITSECTOR
http://copernicusconsulting.net/organizations-embrace-design-thinking/
http://insights.wired.com/profiles/blogs/6-software-delivery-trends-for-2014-1#axzz3kJGJuuaU
http://info.thoughtworks.com/rs/thoughtworks2/images/agile_release_management_1.pdf
http://www.cxotoday.com/story/vishal-sikkas-strategies-driving-infosys-growth-hopes/
http://www.infosys.com/information-platform/overview/Pages/index.aspx
http://www.infosys.com/management-consulting-services/
https://www.kpmg.com/IN/en/IssuesAndInsights/ArticlesPublications/Documents/The-SMAC-code-Embracing-new-tech
nologies-for-future-business.pdf
http://eprints.lse.ac.uk/38353/1/ARCWP29-Mitra.pdf
http://www.computerworld.com/article/2475696/it-transformation/smac-and-the-evolution-of-it.html
http://www.livemint.com/Industry/FXPE2yjjVrknGT3uJr33HP/SMAC-is-the-new-flavour-of-IT-services-companies.html

Thank You