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Infosys Consulting Strategy
Infosys Consulting (ICI) was established in 2006 to expand Infosys' presence in the global business consulting market. While ICI aimed to leverage Infosys' Global Delivery Model (GDM) of offshore resources, integrating consulting services posed challenges due to differences in culture and business models between ICI and Infosys Technologies Limited (ITL). To compete effectively, ICI would need to establish its brand, deliver higher value beyond cost savings, and strengthen integration with ITL over the long term.
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Infosys Consulting Strategy
- 1. Infosys Consulting in2006 Abhishek, Anshuman, Ashish Sinha, Binand, Gautam, Manish, Niren, Praveen, Rajul, Surjendu 1
- 2. Abhishek. HOW IS INFOSYSPLACED IN GLOBAL IT SERVICES INDUSTRY IN 2006? 2
- 3. IT Services aredriven to low cost • High buyer power – Commoditized technology, many providers, dependency on large firms • Low supplier power – Many resources available at low cost • Moderate threat of new entrants – Difficult to copy brand value • Low threat of substitute – No substitute • High competitive rivalry – Fragmented market, many players, not much differentiation, moderate switching cost 3
- 4. Business Consulting hashigher power • Medium buyer power – Established providers, dependency upon client brands • Medium supplier power – Higher skills required which are low in supply • Low threat of new entrants – Difficult to copy brand and culture, High entry barrier • Low substitute – No substitute • High competitive rivalry – Many players but high switching cost 4
- 5. Where is InfosysTechnologies? • Biggest global players : IBM and Accenture • Value chain BIZ APP DEV INFRA IMPLEMEN BPO CONSULTING & MAINT MGT Onshore Offshore Expertise – Experience – Procedure IBM / Accenture Infy / TCS • US companies are moving down the value chain • Indian companies are trying to move up 5
- 6. Where is InfosysTechnologies? Employees 1999 2003 2004 2005 2006 2007 IBM 110000 Accenture 5000 11000 126000 Infosys 3700 25000 52700 78000 Wipro IBM 91.1 97.841 Sales($Billion) Accenture 17.09 18.355 Infosys 1.592 1.710 IBM 0.890 Rev/employee Accenture 0.146 ($M per Emp) Infosys 0.032 6
- 7. Where is ICIin Infy? Business Infosys Consulting Inc. Consulting SI Infosys Technologies Limited ADM ITES Infosys BPO 7
- 8. What is ICI’sValue Proposition? Parameter Description Differentiating value Delivery model Global Delivery Model •Right mix of business and (of Infosys) – technology consultants •1-1-3 configuration •Lower blended rate •24 hour project work day •Shortened implementation time •Minimum deviation from design to implementation Performance Metrics to measure •Measurable benefits business process •Value based case fee improvement from the engagement 8
- 9. Thus GDM Offers… •Reduced cost as offsite resources in India • Increased delivery time through 24 hours op. • Measurable benefits of deliverables 9
- 10. Manish WHY INTO CONSULTING? WHYON ITS OWN? 10
- 11. Why Infy intoConsulting? • Repeat business could provide higher revenue – Fill gaps in offerings • Existing relationships became complex – Address new opportunities of clients – Richer client relations: One-point solution • Global service market in 2004: 550 $B – Huge opportunity as TCS+Wipro+Infy had .8% only 11
- 12. Why on itsOwn? • To develop its own brand – Subcontract could dilute it – Joint ventures have limited life & Validity • Overlap of activities & Conflict of interests • To leverage the Global Delivery Model (GDM) – Causing further disruption to consulting – New model can not be setup through acquisition • Transform Culture & Build Brand as global transformation enabler 12
- 13. How Is InfyMoving in Consulting? Value IBM Cost Infosys 13
- 14. INTERFACES BETWEEN ITL& ICI WHAT ARE THE CHALLENGES? 14
- 15. Objective: Seamless Integration •Mirror ITL (industry-wise organized) • Coordination driven by metrics – Each BU has specific goal for ICI – ICI has specific revenue goals for ITL • Collaboration driven by “One Infy” culture – Incentives & rewards, cross-business training, cultural integration, Forum – One company to customer • Evolution - Constant redefinition and learning • Adapt ITL sales process to include ICI services • Fork in the road: Ownership & Accountability – Job allocation: Transformation (ICI) & Technology (ICT) • Performance management of ICI by Sr. Executives of ICT 15
- 16. Challenges: Seamless Integration •Business Integration Where to draw line between business and technology consulting? How to utilize common sales force? • Culture Integration ICI formed by a team of outsiders Different people: Foreigners in ICI vs Indians in ICT • Single view to customer Mechanism for revenue sharing on same account Who would be the key contact - ITL or ICI? • 1-1-3 model and its efficiency Can it be leveraged everywhere? 16
- 17. Rajul INFY AND ITSCOMPETITORS 17
- 18. Infy’s Competitors AreStrong • Infy’s strategy includes – Integration of management & IT consulting – Increase in cross-selling – Cost-effectiveness • Should IBM and Accenture feel threatened by ICI? – Already have integrated services – ICI is small player in consulting • Is it a big concern as of now? – It takes long to establish in business consulting • Should they also go for low cost model? 18
- 19. GDM can notbe extended • Business consulting is expertise oriented – GDM works well for procedural and experiential activities. IT has been commoditized. • Business consulting is people oriented – Face to face interaction has more importance – 3-3-1 model may be needed, not 1-1-3! • Business consulting is thinking oriented – Gaps of silence needed. 24 hours continuity may not add any significant value. 19
- 20. How Can CompetitorsRespond? • Increase the value proposition higher – Decrease buyer power and increase competition • Integrate management and IT consulting further – Remove complexities in integration – Same impact as above • Need not try to replicate 1-1-3 model everywhere – GDM good for low end IT Consulting – May not work for critical high end business consulting 20
- 21. What Should ICIdo post 2006? • Expand global reach (revenue, market share) – Financial support is available • Deliver higher Value and Communicate – Look beyond GDM • Get the best talent • Integrate ICI and ITL and have better interface • Build the brand – Not many know ICI in business consulting – Infosys is still known as an IT services company 21
- 22. Thank You! 22