Analyst Meet 2003

Report
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
Slide 1
Infosys has developed a solutions-led growth
strategy to attain sustained, profitable growth
New Focus:
Solutions
Orientation
Weave together
services into
innovative
solutions
BusinessTechnology
Solutions
»
»
»
»
Drives greater profitability
Builds deeper client relationships
Increases brand salience
Focus, innovate
Infosys Growth
Drivers
Offshore
Outsourcing
» Core profitable business with high
repeat revenues
» Drives high volumes and economies
of scale
» Differentiate to hold the price line –
Outsourcing as a Solution
Present Focus:
Service line
expansion
Execution excellence
New Service Lines
» Builds new capabilities (e.g. BPM,
Business Consulting, SI, IMS)
» Increases customer share-of-wallet
© Infosys Technologies Limited 2003-2004
Analyst Meet 2003
Slide 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
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 McKinsey 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
Slide 3
In the IT Services industry context, there are important
differences between a services-based strategy and a
solutions-based strategy
Services model
Examples
Application Development,
of offerings Maintenance, Reengineering,
sold
Consulting, BPO
Solutions model
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
Slide 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
Slide 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
Slide 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
Staff
Training
Solution
Teams
Rewards
and
Incentive
s
Vertical
IBUs
© Infosys Technologies Limited 2003-2004
Business
Consultin
g
Expertise
Alliance
s
Program
Senior
Mgmt
Sponsors
End-to-end
service
portfolio
Knowledg
e Mgmt
Systems
Analyst Meet 2003
Slide 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
SupplyChainge, 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 MatrixOne, CATIA
migration with Microsoft
Enterprise
Solutions PU
Package Shared Services Platform,
Upgrade Kits for Siebel, Oracle, PeopleSoft
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
Slide 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 Focus
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
Slide 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
Slide 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
Slide 11
Thank You
www.infosys.com
© Infosys Technologies Limited 2003-2004
“New” Services as % of Revenue
%
35%
35%
30%
28%
23%
21%
14%
25%
15%
10%
7%
0%
FY99
FY00
FY01
FY02
FY03
Q1 FY04
“New” services defined as services other than Application Development,
Maintenance, Re-Engineering and Products
© Infosys Technologies Limited 2003-2004
Analyst Meet 2003
Slide 13

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