report on infosys by group a4
TRANSCRIPT
1
A
Project Report
on “Infosys Technologies”
Submitted By
MBA I
Group A4
“ABHIVYAKTI”
Indira Institute of Management
2010-2012
2
GRADES
SR.NO. NAME OF STUDENT GRADE 1 Darshan Chaudhari A 2 Siddheshwar Salunke A 3 Sangram Tawade A 4 Priyanka Chaphekar A 5 Ashish Malpani A 6 Revati Dhamangaonkar A 7 Anand Iyer A 8 Deepali Kandekar A 9 Kiran Baviskar A 10 Sambhu Gupta A 11 Mayur Mule C 12 Nisha Behl B
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Acknowledgements
We appreciate the help given by all teachers and our mentor Ms. Snehal Gholap. We
would also like to thank our group faculty mentor Mrs. Yestrella Vaz. Thanks to Professor Ajay
Waradhe (Faculty in charge of ‘ABHIVYAKTI’) and Miss Kannavi Yadav(Student incharge
‘ABHIVYAKTI’). We also appreciate the information and help given by Mr. Amol D
Palikondawar, Technology Analyst of INFOSYS Technologies.
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INDEX
Sr. No
Topics Page Number
1 Macroanalysis 5 1.1 Information Technology History 5 1.2 Market Structure 7 1.3 Top Companies in the world and India 9 1.4 Recent Trends and Technologies 10 1.5 Mergers and Acquisitions 14 1.6 Government Polices 17 1.7 Related Terms 22 2 Microanalysis 24 2.1 Company History 24 2.2 Share Holding Pattern 25 2.3 Corporates Associated 26 2.4 Current Position of the company 27 2.5 Financial Position of the company 28 2.6 SWOT analysis of INFOSYS 33 2.7 Marketing Strategies 35 2.8 Differentiation Strategies 38 2.9 HR Policies 39 2.10 CSR Initiatives 41 2.11 Awards 43 2.12 Conclusion 44 2.13 Bibliography 45
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MACROANALYSIS
Information Technology Sector History
Information Technology (IT) industry in India is one of the fastest growing industries. Indian IT
industry has built up valuable brand equity for itself in the global markets. IT industry in India comprises of
software industry and information technology enabled services (ITES), which also includes business process
outsourcing (BPO) industry. India is considered as a pioneer in software development and a favourite
destination for IT-enabled services. Global vendors such as Accenture, HP, EDS, IBM and Cap Gemini are
looking at India to expand their offshore delivery capability through the organic and/or inorganic routes.
Microsoft, Tata Consultancy Services, Wipro Technologies Ltd and Infosys Technologies Ltd are major players
in the IT and ITES segments.
The origin of IT industry in India can be traced to 1974, when the mainframe manufacturer, Burroughs,
asked its India sales agent, Tata Consultancy Services (TCS), to export programmers for installing system
software for a U.S. client.
The Indian Education System, High Quality of Human Resources, Competitive Costs and India’s
Growing Infrastructure are some of the factors which play a key role in India being a key player in the IT
sector.
Phases in India
Formative Years (Till 1991)
The origin of the IT Industry in India can be traced back to 1967 in Mumbai, when Tata Consultancy
Services (TCS) was established in collaboration with Burroughs a US based business equipment manufacturer.
TCS’s first order came from Burroughs itself to write a code for its business computer. The first software
export zone SEEPZ was set up here way back in 1973, the old avatar of the modern day IT park. More than 80
percent of the country's software exports happened out of SEEPZ, Mumbai in 80s.
Relaxed immigration laws in the United States of America (1965) attracted a number of skilled Indian
professionals aiming for research. By 1960 as many as 10,000 Indians were estimated to have settled in the US.
By the 1980s a number of engineers from India were seeking employment in other countries. In response, the
Indian companies realigned wages to retain their experienced staff.
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Between the years 1977-1980 the country's Information Technology companies Tata Infotech, Patni
Computer Systems and Wipro had become visible. The 'microchip revolution' of the 1980s had convinced
both Indira Gandhi and her successor Rajiv Gandhi that electronics and telecommunications were vital to
India's growth and development.
Between the years 1986-1987, the Indian government embarked upon the creation of three wide-area
computer networking schemes: INDONET (intended to serve the IBM mainframes in India), NICNET (the
network for India's National Informatics Centre), and the academic research oriented Education and Research
Network (ERNET).
Liberalisation (1991 onwards)
The Indian economy underwent economic reforms in 1991, leading to a new era of globalization and
international economic integration. Economic growth of over 6% annually was seen between 1993-2002. The
economic reforms were driven in part by significant the internet usage in the country. The new administration
under Atal Bihari Vajpayee—which placed the development of Information Technology among its top five
priorities— formed the Indian National Task Force on Information Technology and Software Development.
Throughout the 1990s, another wave of Indian professionals entered the United States. The number
of Indian Americans reached 1.7 million by 2000. This immigration consisted largely of highly educated
technologically proficient workers.
Establishment of NASSCOM and DIT facilitated the growth of the IT industry in India. The
government put forth many schemes and adopted initiatives to facilitate the continued growth of the sector.
The Indian information technology (IT) industry has played a key role in putting India on the global
map. Thanks to the success of the IT industry, India is now a power to reckon with. According to the annual
report 2009-10, prepared by the Department of Information Technology (DIT), the IT-BPO industry is expected
to garner a revenue aggregate of US$ 73.1 billion in 2009-10. The report predicts that the Indian IT-BPO
revenues may reach US$ 225 billion in 2020.
Today, TCS, Wipro and Infosys are some of the major IT sector players not just in India but also the
world. Moreover, with the government stepping in with their SEZ and STP policies and other initiatives. The
Indian IT Industry has nothing but flourished.
(Indian Law Offices)
(Economy of India)
(Economy watch)
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Market Structure
Sector Structure
The IT industry has emerged as one of the most important industries in the Indian economy contributing
significantly to the growth of the economy. The IT industry of India got a major boost from the liberalization of
the Indian economy. India's software exports have grown at an annual average rate of more than 50% since
1991. The structure of the IT industry is quite different from other industries in the Indian economy. The IT
industry of India is hugely dependant on skilled manpower. Primarily a knowledge based industry, the IT
industry of India has reordered significant success due to the huge availability of skilled personnel in India.
The industry structure in the IT sector has four major categories. These are -
• IT services
• IT enabled services
• Software products
• Hardware
IT services
IT services constitute a major part of the IT industry of India. IT services include client, server and web
based services. Opportunities in the IT services sector exist in the areas of consulting services, management
services, internet services and application maintenance. The major users of IT services are -
• Government
• Banking
• Financial services
• Retail and distribution
• Manufacturing
IT enabled services
The services which make extensive use of information and telecommunication technologies are
categorized as IT enabled services. The IT enabled services is the most important contributor to the growth of
the IT industry of India. Some of the important services covered by the ITES sector in India are -
• Customer-interaction services including call-centers
• Back-office services
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• Revenue accounting
• Data entry and data conversion
• HR services
• Transcription and translation services
• Content development and animation
• Remote education,
• Data search
• Market research
• Network consultancy
Software products
Software products are among the most highly exported products from India. The software industry in
India originated in the 1970s and grew at a significant pace in the last ten years. Between 1996-1997 and 2002-
2003, the Indian software industry grew more than five times from ` 2630 crores to ` 13200 crores. During the
same period software and service exports from India grew by almost twelve times.
Hardware
The hardware sector of the It industry focuses on the manufacturing and assembling of computer
hardware. The consumption of computer hardware is high in the domestic market. Due to the rise in the number
of IT companies, sales of desktops, laptops, servers, routers, etc have been on the rise in recent years. Many
domestic and multi-national; companies have invested in the computer hardware market in India.
Another categorization in the structure of India's IT industry is related to the market. There are two
major market classifications - the domestic market and the export market. The export market, dominates the IT
industry accounting for 75% of the revenue.
Market size
The Indian information technology (IT) industry has played a key role in putting India on the global
map. Thanks to the success of the IT industry, India is now a power to reckon with. According to the annual
report 2009-10, prepared by the Department of Information Technology (DIT), the IT-BPO industry is expected
to garner a revenue aggregate of US$ 73.1 billion in 2009-10 as compared to US$ 69.4 billion in 2008-09,
growing at a rate of over 5 per cent. The report predicts that the Indian IT-BPO revenues may reach US$ 225
billion in 2020.
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According to DIT, the Indian software and services exports is expected to reach US$ 49.7 billion in 2009-10 as
compared to US$ 47.1 billion in 2008-09, registering an increase of 5.5 per cent in dollar terms. Further, the IT
services exports is estimated to grow from US$ 25.8 billion in 2008-09 to US$ 27.3 billion in 2009-10, showing
a growth of 5.8 per cent.
The World Top 5
(in million dollors)
Rank Company Revenue 1 IBM 55,000 2 HP 34,585 3 Fujitsu 23,342 4 Accenture 20,939
5 CSC 16,004
(Gartner)
Top 10 IT Companies in India
(in ` crores)
Rank Company Name Market Cap. 1 TCS 1,81,551.82 2 Infosys 1,74,041.25 3 Wipro 1,08,904.77 4 HCL Tech 28,400.14 5 Oracle Finance 18,681.34 6 Mphasis 13,450.61 7 Mahindra Satyam 11,293.68 8 Tech Mahindra 9,716.79 9 Patni Computers 5,793.16 10 IBM India 5,672.73
(Money Control)
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Recent trends and technology
Cloud computing
Cloud computing is a new way to consume and deliver services. It builds on the maturation of the Web
over the last decade, combining the rapid scalability and proliferation of the Internet with increased levels of
self-service and elegant Web-based applications. It allows non-technical users to execute very complex
computing tasks without the need to understand the underlying technology, turning data centers into the
factories of the future.
Cloud computing is based on technologies like virtualization, automation, open standards and Web-
based computing. It can enable rapid business innovation by delivering easy-to-use computing services to users
on demand, regardless of their location or the type of device they are using. A cloud-based service can be
public, private, or a combination of the two, sometimes referred to as a hybrid cloud. It is also cost efficient.
Organizations are currently studying the technology and looking for migration paths to cloud-based
services. They might build their own private cloud, or deploy a public cloud service from providers, or a hybrid.
The key benefits that keep people moving towards cloud computing are reduced costs and increased agility to
scale services as they are needed. Cloud computing will improve the ability of IT operations to respond to
business needs faster, and in a secure way.
The key to enabling this technology is virtualization, and Microsoft, to name just one company, has
been focusing heavily on virtualization and cloud computing.
GREEN TECHNOLOGY
Companies are feeling increasing pressure to improve their performance on environmental issues.
Water, energy and raw materials are costly and supply is often constrained. Reducing consumption and waste
by improving efficiency can provide big savings, both in direct costs and in associated expenditures, while also
reducing environmental impact.
Governments are adopting increasingly stringent regulations on green issues, and companies must
respond proactively or face growing financial penalties, restrictions on their business operations, and negative
exposure that could cause them to lose opportunities with key stakeholders. Customers and other key
stakeholders such as investors, business partners and employees are also monitoring companies on a full range
of green issues to decide which they will buy from, invest in, partner with and work for.
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Green IT incorporates technology into efforts to save energy and find new environmental solutions. A
good example of this is Unified Communications, which encourages staff to cut back on travel expenses by
hosting virtual conferences.
Social computing
Organizations are rapidly realizing the economic and business benefits of social computing. Gen Y
workers of today and tomorrow are looking to integrate the social-networking tools they use in their personal
interactions into their work networking.
Businesses, both small and large, are starting to focus on using social software and are not only
developing social media in the enterprise arena, but also integrating it with enterprise-sponsored and public
communities. Social networking has already begun to deliver many business benefits, from attracting and
retaining the best talent and encouraging internal collaboration to spurring new ideas between different virtual
communities.
Collaboration
Collaboration technology is a business platform. Tools are now being developed to enable workers to
communicate and collaborate seamlessly with one another, with their business partners and with customers.
There will soon be greater integration between the desktop phone, productivity tools on the computer and the
mobile phone - and video communication is also a part of collaboration technology.
This technology can be used to improve employee productivity and reduce business costs, such as
saving on travelling costs and time. Along with the increasing use of social networking, collaboration is
expected to transform businesses. It will require not only a thorough understanding of the technology and of the
business, but also adaptation of corporate culture and processes. But of all technologies, collaboration is
expected to have the biggest impact on business.
Business intelligence
Business intelligence represents the next wave in IT investments in Thailand. Enterprises that have
already setup their back-end automation processes will need a system that enables them to "drill down and slice
and dice data” analyze it and present it as information that management can use for making decisions.
Demand for new technologies in 2010 is expected to be industry specific. In banking, for instance, a
strong customer relationship management (CRM) system is needed to support banks as they push their different
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consumer products. Consumer banking in Thailand has become extremely competitive and CRM systems
provide the enabling technology that allows banks to gain the competitive edge.
Large enterprises are also looking into governance, risk and compliance (GRC) systems. Stakeholders
normally demand effective governance in an organization, including enterprise risk management, transparency,
accountability and optimized performance.
Virtualization
It has been implemented since the sixties but has become widely used only in 21st century;
virtualization helps to streamline resources and processes by increasing the utilization rates and flexibility of
computers. Virtualization essentially allows you to do a lot more with less effort. Virtual machines allow you to
share hardware resources which permit multiple applications and operating systems to run on a workstation.
Virtualization options in IT departments include using open-source apps like Virtual Iron or Xen; and also
Microsoft’s Virtual Server, and venerable VMware products. Experts have noted that it can make for a high-
performing and much more efficient workplace, in short, virtualization acts as an enabler that help widen
improvements in IT infrastructure. Implementing and managing the increasingly varied virtualization may save
time and money; however it needs the work of talented IT employees.
Demand for those skills is increasing. Some analysts cited virtualization as the fastest-growing field. A
word of caution though, many virtualizations jobs cropping up call for 3 to 5 years of experience, although
virtualization technologies were quite scarce five years ago. If this IT field interests you, you should get as
many as work experiences for your own advantage.
Information Security
Advanced and repeated cyber-attacks have governmental organizations and private companies
scrambling to secure their databases and networks. Many companies are spending more on security technology,
assessments, training, and certification. No wonder, as cyber-attacks continue to threaten the IT industry.
Viruses and worms prey on networked systems, while remote workers tend to expose critical company
data to industrial snoopers through holes in weak remote systems. For example, war drivers (those who wander
around and identify companies with vulnerable wireless links) access networks to have free online activities.
A major part of data security comes from compliance, ensuring that everyone are following IT standards that
keep company files safe. Organizations such as SAP and Microsoft have entered the compliance arena, and
other consulting services provide specialized solutions on compliance. Additionally, many big firms have
invented another senior IT position, the CCO (Chief Compliance Officer) to oversee compliance
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implementation. Experts agree that although the scope of present regulations might be immense, additional
regulations will without doubt follow.
After consistently lagging behind the business world in consumer-level IT technology and other fields,
the U.S. government starts to officially recognize the importance for higher IT security budget. While data
security is by no means a new field, it is now entering the maturation period.
Outsourcing
It is a stark reality on IT industry. Of course, outsourcing is a good thing for workers in specific
geographical areas where skilled employees need good work, however for those who get the pink slip, it will be
disastrous. Yet the very practice of skill outsourcing also creates new job opportunities in the IT industry,
stimulating the need for progressive and innovative strategies to connect employees from continent to
continent. Outsourcing firms are still rising, help-desk services (for example, caller-profiling software to
improve the phone calls efficiency), desktop management, data-centre services, mainframes, and even on-the-
spot supports are their primary offerings. The tide may still be reversed, if the US dollar continues to fall in
value against other currencies, IT firms may find it more attractive to set up operations inside United States.
Also, remember that one good fact about government IT jobs-both full-time and contractual positions, is that
they’re less vulnerable to outsourcing, because those jobs often need security clearances. No matter who is
outsourcing where, there’s only one goal: finding affordable but highly skilled IT workers.
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Mergers and acquisitions
Despite a general slowdown in M&A activity across the world, the M&As in the IT sector have continued
in 2009 at full strength as the deep contraction in the global economy provided an opportunity to IT and BPO
sector to consolidate by acquiring companies across the globe. At the same time, world-over the IT companies
are using the M&A route for transforming towards one integrated play as the lines between hardware, solutions
and software solutions are blurring.
• Dell acquired Perot Systems
Dell Inc has struck a deal to acquire technology services provider Perot Systems Inc in a cash transaction valued
at $3.9 billion, as the world’s No 2 maker of personal computer looks to take on rivals Hewlett Packard (HP) and IBM in
the lucrative software solutions and services domain. The deal has been in the works from 2007. The move will help Dell
diversify from its core hardware business, which has become a commodity business with lower margins. The acquisition
will give Dell more headroom to compete with the likes of IBM, Accenture, HP and Indian IT and ITeS services
providers, such as TCS, Infosys and Wipro. Post acquisition Dell’s revenues will be around $7.7 billion, about 25%
higher than the top Indian services firm TCS.
Company name Revenue generated (US $Billions) No. of employees in India
Dell 5.1 1200
Perot System 2.8 8000
Combine services company 7.7 20000
• Microsoft acquired Kidaro
Microsoft completed its acquisition of Kidaro, a startup from Israel that makes desktop virtualization
software that is especially useful for roaming laptop users. The deal amount was nearly about $100 million.
Microsoft combined Kidaro’s technology with its Microsoft Desktop Optimization Pack (MDOP) Windows
Optimized Desktop to deliver a new desktop virtualization product called “Microsoft Enterprise Desktop
Virtualization” during the first half of 2009. This technology will help enable end users to run applications from
multiple versions of Windows at the same time, with seamless windowing and menus, and without the
confusion of logging into and seeing multiple virtual machine desktops.
• IBM acquired Guardium
In November 2009, IBM acquired Guardium, a leader in real-time enterprise data monitoring and
protection. This acquisition enabled IBM to meet clients’ growing need for trusted information and regulatory
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compliance. Guardium's technology helps clients safeguard data, monitor database activity and reduce
operational costs by automating regulatory compliance tasks.
• Satyam merged with TechMahindra
In 2009 TechMahindra offered a bid of 58rupees /share and paid 1757 crore rupees for 31% stakes in
Styam.Venturbay Consultants Private Limited, a Tech Mahindra subsidiary, emerged as the highest bidder to
acquire a controlling stake in Satyam.
• Hyland Software acquired CSC Inc.
Hyland Software on 24th of Sept. purchased privately held Computer Systems Company, Inc. (dba The CSC
Group), a provider of business and clinical healthcare software and document conversion services. Terms of the
transaction were not disclosed.
Hyland mainly focused that ECM (Enterprise Content Management) is just as important in other parts of the
organization, such as patient accounting. The aim is to achieve both the best patient care and most efficient
operations possible. Buying The CSC Group strengthens and extends presence in more parts of the healthcare
system, particularly on the financial side.
• IBM acquires software company OpenPages
IBM Corp acquired OpenPages, a privately held software company that develops risk and compliance
management systems for enterprises on 15 sept.2010.
With growing volumes of data, disconnected systems, constantly changing regulatory compliance
challenges and a dynamic business climate, gaining a complete view of an organization's risk exposure is
increasing in complexity was main motto of IBM.
• Capgemini buys majority stake in Brazil IT group
Europe's leading information technology group Capgemini bought 55 per cent stake in Brazilian peer CPM
Braxis for 233 million euros ($298 million) to expand in high-growth emerging markets.
CPM Braxis has annual revenues of roughly 450 million euros and 5,500 employees. Its enterprise value
was estimated at 437 million euros.
• HP acquires data software firm Stratavia
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Hewlett-Packard Co acquired Stratavia, a private company that makes software to manage databases and
has applications in cloud computing.
Stratavia will make HP's Software and Solutions portfolio stronger with its software that helps support the
infrastructure of "cloud computer environments.
Stratavia, based in Denver, also helps in database automation, which makes it easier for companies to
maintain servers.
• Cognizant acquires Paris-based testing firm
Cognizant, a provider of IT services, acquired Galileo Performance, a Paris-based provider of information
technology (IT) testing consulting services on june 17 2010.
• CSS acquires UK based IT firm
CSS Corp., provider of technology solutions acquired Aliquo Solutions Limited of the UK, a niche IT
consulting firm focused on IT transformation on 15 june 2010.
With this acquisition, CSS would leverage Aliquo’s wealth of offshoring advisory and execution experience
to compliment its proven global delivery capabilities. This acquisition also expands CSS presence in European
and Australian markets.
(Cyber Media India Online Limited)
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Government policies
IT Act 2000:
The arrival of the Internet and the World Wide Web made it possible for people to communicate and
transact over cyber space. It was a revolutionary step for humanity, but it also created a significant need for the
regulation and governance of these activities, a requirement that lead to the creation and implementation of
cyber laws across the globe. India became the 12th nation in the world to adopt a cyber law during 2000.
From the perspective of e-commerce in India, the IT Act 2000 and its provisions contain many positive
aspects. Firstly, the implications of these provisions for the e-businesses would be that email would now be a
valid and legal form of communication in our country that can be duly produced and approved in a court of law.
• Digital signatures have been given legal validity and sanction in the Act.
• The Act throws open the doors for the entry of corporate companies in the business of being Certifying
Authorities for issuing Digital Signatures Certificates.
• The Act now allows Government to issue notification on the web thus heralding e-governance.
• The Act enables the companies to file any form, application or any other document with any office,
authority, body or agency owned or controlled by the appropriate Government in electronic form by
means of such electronic form as may be prescribed by the appropriate Government.
• The IT Act also addresses the important issues of security, which are so critical to the success of
electronic transactions. The Act has given a legal definition to the concept of secure digital signatures
that would be required to have been passed through a system of a security procedure, as stipulated by
the Government at a later date.
• Under the IT Act, 2000, it shall now be possible for corporate to have a statutory remedy in case if
anyone breaks into their computer systems or network and causes damages or copies data. The remedy
provided by the Act is in the form of monetary damages, not exceeding ` 1 crore.
IT Act 2008:
The IT Amendment Bill 2008 has been passed by the Lok Sabha and the Rajya Sabha in the last week of
December, 2008. The said Bill aims to make sweeping changes in the existing Indian cyber law, namely the
Information Technology Act, 2000
The IT Amendment Act 2008 brings about various sweeping changes in the existing Cyber law. While
the lawmakers have to be complemented for their appreciable work removing various deficiencies in the Indian
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Cyber law and making it technologically neutral, yet it appears that there has been a major mismatch between
the expectation of the nation and the resultant effect of the amended legislation. The most bizarre and startling
aspect of the new amendments is that these amendments seek to make the Indian cyber law a cyber crime
friendly legislation; - a legislation that goes extremely soft on cyber criminals, with a soft heart; a legislation
that chooses to encourage cyber criminals by lessening the quantum of punishment accorded to them under the
existing law; a legislation that chooses to give far more freedom to cyber criminals than the existing legislation
envisages; a legislation which actually paves the way for cyber criminals to wipe out the electronic trails and
electronic evidence by granting them bail as a matter of right; a legislation which makes a majority of
cybercrimes stipulated under the IT Act as bail able offences; a legislation that is likely to pave way for India to
become the potential cyber crime capital of the world.
Government Initiatives
Software Technology Parks (STP)
For the promotion of Software exports from the country, the Software Technology Parks of India was set up
1991 as an Autonomous Society under the Department of Information Technology. The services rendered by
STPI for the Software exporting community have been statutory services, data communications servers,
incubation facilities, training and value added services. STPI has played a key developmental role in the
promotion of software exports with a special focus on SMEs and start up units. The STP Scheme has been
extremely successful in fostering the growth of the software industry. The exports made by STP Units have
grown many folds over the years. Today the exports made by STPI registered unit during 2008-09 are ` 215571
Crores about 90% of total software exports from the Country.
The STPI Scheme is lauded as one of the most effective schemes for the promotion of exports of IT and
ITES. The 51 STPI centres that have been set up since inception of the programmers have given a major boost
to IT and ITES exports. Apart from exemption from customs duty available for capital goods (with a few
exemptions) there are also exemptions from service tax, excise duty, and rebate for payment of Central Sales
Tax. But the most important incentive available is 100 percent exemption from Income Tax of export profits,
which has been extended till 31st March 2011. The strength of the scheme lies in the fact that, it is a virtual
scheme, which allows, software companies to set up operations in the most convenient and cheapest locations
and plan their investment and growth solely driven by business needs. STP Scheme is a pan India Scheme,
which has centres spread across India, over 8000 units are registered under STP Scheme.
Benefits under STP scheme:
• Income Tax benefits under Section 10 A & 10 B of the IT Act up to 31st March 2011.
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• Customs Duty Exemption in full on imports.
• Central Excise Duty Exemption in full on indigenous procurement.
• Central Sales Tax Reimbursement on indigenous purchase against from C.
• All relevant equipment / goods including second hand equipment can be imported (except prohibited
items).
• Equipment can also be imported on loan basis/lease.
• 100% FDI is permitted through automatic route.
• Sales in the DTA up to 50% of the FOB value of exports permissible.
• Use of computer imported for training permissible subject to certain conditions.
• Depreciation on computers at accelerated rates up to 100% over 5 years is permissible.
• Computers can be donated after two years of use to recognized non-commercial Educational
Institutions/Hospitals without payment of duty.
• Export proceeds will be realized within 12 months.
• Units will be allowed to retain 100% of its export earnings in the EEFC account.
Special Economic Zone (SEZ) schemes:
In 2005, the Ministry of Commerce, Government of India has enacted the Special Economic Zone (SEZ)
Act, with an objective of providing an internationally competitive and hassle free environment for exports. A
SEZ is defined as a "specifically demarked duty-free enclave and shall deemed to be foreign territory (out of
Customs jurisdiction) for the purpose of trade operations and duties and tariffs". The SEZ Act, 2005, supported
by SEZ Rules, came into effect on 10th February, 2006. It provides drastic simplification of procedures and a
single window clearance policy on matters relating to central and state governments. The scheme is ideal for
bigger Industries and has a significant impact on future Exports and employment
The SEZ Scheme offers similar benefits to SEZ units as compared to those under STPI in respect of indirect
taxes, with some minor differences in operational details. There is a however a significant difference, in respect
of income tax holiday. In SEZ Scheme the exemption from income tax is tapered down over 15 years from the
date of commencement of manufacture. There is 100% exemption of export profits from income tax for the first
five years, 50% for the next five years and 50% for the five years subject to transfer of profits to special
reserves.
The SEZ policy aims at creating competitive, convenient and integrated Zones offering World class
infrastructure, utilities and services for globally oriented businesses. The SEZ Act 2005 envisages key role for
the State Governments in Export Promotion and creation of related infrastructure. A few salient features of SEZ
scheme are as under:
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• Special Economic Zones (SEZs) are being set up to enable hassle free manufacturing and trading for
export purposes.
• Sales from Domestic Tariff Area (DTA) to SEZs are being treated as physical export. This entitles
domestic suppliers to Drawback/ DEPB benefits, CST exemption and Service Tax exemption.
• 100% Income Tax exemption on export profits available to SEZ units for 5 years, 50% for next 5 years
and 50% of ploughed back profits for 5 years thereafter.
• This scheme, which is ideal for bigger Industries, has a significant impact on future Exports &
employment. STPI Directors are acting as Development Commissioners for IT/ITeS SEZs.
Related Organizations:
Department of Information Technology (DIT):
This department which is under the Ministry of Communications and Information Technology is
responsible for the formulation, implementation and review of national policies in the field of Information
Technology including hardware and
Software, standardization of procedures, internet, e-commerce and information
Technology education and development of electronics.
Initiatives for development of Software industry including knowledge based enterprises, measures for
promoting IT exports and competitiveness of the industry are looked after by the Electronics Export and
Computer Software Promotion Council (ESC) and National Informatics Centre (NIC) along with DIT.
The Department of Information Technology undertakes the following functions:
• Policy matters relating to Information Technology; Electronics; and Internet (all matters other than
licensing of Internet Service Provider).
• Promotion of Internet, IT and IT enabled services.
• Assistance to other departments in the promotion of E-Governance, Ecommerce, E-Medicine, E-
infrastructure, etc.
• Promotion of Information Technology education and Information Technology-based education.
• Matters relating to Cyber Laws, administration of the Information Technology Act. 2000 (21 of 2000)
and other IT related laws
• Matters relating to promotion and manufacturing of Semiconductor Devices in the country; The
Semiconductor Integrated Circuits Layout Design Act, 2000 (37 of 2000).
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• Interaction in IT related matters with International agencies and bodies E.g. Internet for Business
Limited (IFB), Institute for Education in Information Society (IBI) and International Code Council - on
line (ICC).
• Initiative on bridging the Digital Divide: Matters relating to Media Lab Asia.
• Promotion of Standardization, Testing and Quality in IT and standardization of procedure for IT
application and Tasks.
• Electronics Export and Computer Software Promotion Council (ESC).
• National Informatics Centre (NIC).
• Initiatives for development of Hardware / Software industry including knowledge-based enterprises,
measures for promoting IT exports and competitiveness of the industry.
• All matters relating to personnel under the control of the Department.
National Association of Software and Services Company (NASSCOM):
NASSCOM acts as an advisor, consultant and coordinating body for the IT-BPO industry in India, and
has played a key role in enabling the government in India to develop industry friendly policies. NASSCOM was
set up in 1988 to facilitate business and trade in software and services and to encourage advancement of
research in software technology. It is a not-for-profit organization, registered under the Indian Societies Act,
1860.
NASSCOM has been proactive in pushing this cause for ensuring that the Indian
Information Security environment benchmarks with the best across the globe. As a part of its Trusted Sourcing
initiative, NASSCOM is in the process of setting up the Data Security Council of India (DSCI) as a Self
Regulatory Organization(SRO) to establish, popularize, monitor and enforce privacy and data protection
standards for India’s ITeS-BPO industry. DSCI shall function as an enabler to the IT and ITeS industry to grow
at a rapid pace by facilitating the adoption and enforcement of the prescribed security standards and best
practices.
After the economic reforms of 1991-92, liberalization of external trade, elimination of duties on imports
of information technology products, relaxation of controls on both inward and outward investments and foreign
exchange and the fiscal measures taken by the Government of India and the individual State Governments
specifically for IT and ITES have been major contributory factors for the sector to flourish in India and for the
country to be able to acquire a dominant position in offshore services in the world. The major fiscal incentives
provided by the Government of India have been for the Export Oriented Units (EOU), Software Technology
Parks (STP), and Special Economic Zones (SEZ).
(Derctorate of Information Technology Website)
22
Related Terms to Sector
ANSI (American National Standard Institute):
The American National Standards Institute (ANSI) empowers its members and constituents to
strengthen the U.S. marketplace position in the global economy while helping to assure the safety and health of
consumers and the protection of the environment.
ISO (International Organization for Standardization):
ISO (International Organization for Standardization) is the world's largest developer and publisher of
International Standards. ISO is a network of the national standards institutes of 163 countries, one member per
country, with a Central Secretariat in Geneva, Switzerland, that coordinates the system. The Information
Technology standards are listed under ISO/IEC.
Data mining:
Data mining is the process of extracting patterns from data. It is widely used in profiling practices such
as marketing, fraud detection and scientific discovery etc.
Data warehouse:
A data warehouse is a information repository. (Collection of resources that can be accessed to retrieve
information) of an organization's electronically stored data, designed to facilitate reporting and analysis .In
simple form data warehouse is a collection of large amount of data
e- Commerce (Electronic commerce):
Electronic commerce, commonly known as e-commerce or ecommerce, or e-business consists of the
buying and selling of products or services over electronic systems such as the Internet and other computer
networks
ERP (Enterprises Resource Planning):
Enterprise Resource Planning (ERP) is an integrated computer-based system used to manage internal
and external resources, including tangible assets, financial resources, materials, and human resources.
CRM (customer relationship management):
Customer relationship management (CRM) is a broadly recognized, widely-implemented strategy for managing a
company’s interactions with customers, clients and sales prospects. It involves using technology to organize, automate,
23
and synchronize business processes .principally sales activities, but also those for marketing, customer service, and
technical support.
MIS (Management Information System):
A management information system (MIS) is a system or process that provides information needed to
manage organizations effectively.
DIT (Department of Information Technology):
Major function of DIT is Promotion of Information Technology and Information Technology enabled
services and Internet, beside this it also I.T. education and I.T. based education.
CMM (Capability Maturity Model)
The Capability Maturity Model (CMM) is a service mark owned by Carnegie Mellon University (CMU)
and refers to a development model elicited from actual data. The CMM was originally intended as a tool to
evaluate the ability of government contractors to perform a contracted software project. Though it comes from
the area of software development, it can be, has been, and continues to be widely applied as a general model of
the maturity of processes in IT Industry. It has a 5 level process maturity continuum where the 5th level is a
notional ideal state.
(IT Resources)
24
MICROANALYSIS
Company History
Infosys Technologies Limited, incorporated in the year 1981 provides consulting and IT services.
Infosys has been a pioneer in offering innovative solutions to its clients. The company offers a wide range of
software services, namely application development and maintenance, corporate performance management,
independent validation services, infrastructure services, packaged application services and product engineering
and systems integration.
Primarily Infosys was started by seven people with US$ 250 as Infosys Consultants pvt. Ltd. under the
Indian Company act 1956. It changed its name to Infosys Technologies Private Limited in April 1992 and to
Infosys Technologies Limited in June 1992, when it became a public limited company. Infosys was the first
Indian company to be listed on the NASDAQ stock exchange. Infosys pioneered the Global Delivery Model
(GDM), which emerged as a disruptive force in the industry leading to the rise of offshore outsourcing. The
GDM is based on the principle of taking work to the location where the best talent is available, where it makes
the best economic sense, with the least amount of acceptable risk. Infosys has a global footprint with 63 offices
and development centers in India, China, Australia, the Czech Republic, Poland, the UK, Canada and Japan.
Infosys and its subsidiaries have 114,822 employees as on June 30, 2010.
Today, Infosys is a global leader in the “next generation” of IT and consulting with revenues of over
US$ 4.8 billion by taking a pride in building strategic long-term client relationships.
MILESTONES
• 2009 - Infosys selected as a member of The Global Dow and their employ strength grows to over
1,00,000.
• 2008 - Annual net profit cross US$ 1 billion
• 2007 - Kris Gopalakrishnan, COO, takes over as CEO. Nandan M. Nilekani is appointed Co-Chairman
of the Board of Directors.
• 2006 – In 25th year of Infosys pvt.ltd. N. R. Narayana Murthy retires from the services of the company
on turning 60. The Board of Directors appoints him as an Additional Director. He continues as
Chairman and Chief Mentor of Infosys.
(Infosys Technologies website)
(Maps of India, India Business directory)
25
Share Holding Pattern
Category Category of share
Holder
Number of share
holders
Total Number of
shares
Total shareholding as a
percentage of total number
of shares
(A) Promoter and
Promoter Group
Individuals/HUFs 19 9,20,84,978 16.05%
Total (A) 19 9,20,84,978 16.05%
(B) Public Share
Holding
1 Institutions
a Mutual funds/UTI 285 2,39,42,449 4.17%
b Financial
institutions / Banks
34 2,60,581 0.05%
c Insurance
companies
19 2,26,28,754 3.94%
d Foreign institutional
investors
899 20,56,88,974 35.84%
Sub total (B1) 1237 25,25,20,758 44.00%
2 Non Institutions
a Bodies Corporate 3220 3,42,57,152 5.97%
b Individuals 3,67,302 8,04,77,902 14.02%
c Others
NRI/OCBs 6,632 48,55,266 0.85%
Trusts 44 28,79,949 0.50%
Sub total (B2) 3,77,198 12,24,70,269 21.34%
Total (B) 3,78,435 37,49,91,027 65.34%
Total (A)+(B) 3,78,454 46,70,76,005 81.39%
( C) Shares held by
custodians and
against which
depository receipts
have been issued
1 10,68,25,096 18.61%
Grand Total 3,78,455 57,39,01,101 100.00%
26
Corporates Associated
N. R. Narayana Murthy
(Chairman of the Board and Chief Mentor, Infosys Technologies)
N. R. Narayana Murthy is the Founder-Chairman of Infosys Technologies Limited, a global software
consulting company headquartered in Bangalore, India. He founded Infosys in 1981. Under his leadership,
Infosys was listed on NASDAQ in 1999. He was the CEO of the company for 21 years, from 1981 to 2002.
After stepping down as CEO in 2002, he has broadened his scope of activities to social services as well as
promoting India globally. He is also the recipient of Padma Shri, Padma Vibhushan, Officer of the Legion of
Honour (the highest civilan award awarded by France), Order of the British Empire (conferred by the
Government of United Kingdom).
S. Gopalkrishnan
(Chief Executive Officer and Managing Director, Infosys Technologies)
S. Gopalakrishnan (Kris to his colleagues) is one of the founders of Infosys Technologies Limited. On
June 22, 2007, he took over from Nandan Nilekani as the CEO and Managing Director of Infosys Technologies
Limited. He previously served as Chief Operating Officer (since April 2002), and as the President and Joint
Managing Director (since August 2006). His responsibilities included Customer Services, Technology,
Investments and Acquisitions.
He is currently the Chairman of the Indian Institute of Information Technology and Management
(IIITM), Kerala, and Vice Chairman of the Board for Information Technology Education Standards (BITES) set
up by the Government of Karnataka. He is the Vice Chairman of the Confederation of Indian Industries (CII)
Southern Regional Council. He is also a member of ACM, IEEE and IEEE Computer Society.
Nandan Nilekani
Nandan Nilekani, after graduating from IIT Bombay in 1978, joined Mumbai-based Patni Computer
Systems where he was interviewed by N.R. Narayana Murthy. Three years later, in 1981, Murthy walked out of
Patni following a disagreement with one of the Patni brothers. His entire division walked out with him. The
defectors decided to start their own company, Infosys. Nilekani became the Chief Executive Officer of Infosys
in March 2002, taking over from Murthy. Nilekani served as CEO and MD of the company from March 2002 to
April 2007, when he relinquished his position to his colleague Kris Gopalakrishnan, becoming Co-Chairman.
He left Infosys on 9 July 2009 to serve as the chairperson of the Unique Identification Authority of India, in the
rank of a cabinet minister under invitation from the Prime Minister of India, Dr. Manmohan Singh. (Infosys
Technologies website)
27
Current Position of the company
• Growth rate of Infosys’s net incomes stood at 2009-10 4.32% against 2008-09 29.50%. • Its net profit was slightly reduced from 2008-09 by 30.18% to -0.27% in 2009-10 • 67% of its revenue comes from the North American market • Major contributor to its revenue remains financial solutions
(Infosys Annual Report, 2009-10)
67%
22%
1%10%
Revenue by geographical areaNorth America Europe India Rest of the world
35%
19%15%
14%
17%
Revenue by SectorFinancial services Manufacturing Telecom Retail Others
28
Financial Position of the company
Balance Sheet 2009-10
(In ` Crores)
Mar '08 Mar '09 Mar '10 Sources Of Funds Total Share Capital 286 286 287 Equity Share Capital 286 286 287 Share Application Money 0 0 0 Preference Share Capital 0 0 0 Reserves 13204 17523 21749 Revaluation Reserves 0 0 0 Networth 13490 17809 22036 Secured Loans 0 0 0 Unsecured Loans 0 0 0 Total Debt 0 0 0 Total Liabilities 13490 17809 22036 Gross Block 4508 5986 3779 Less: Accum. Depreciation 1837 2187 0 Net Block 2671 3799 3779 Capital Work in Progress 1260 615 409 Investments 964 1005 4636 Inventories 0 0 0 Sundry Debtors 3093 3390 3244 Cash and Bank Balance 657 805 9797 Total Current Assets 3750 4195 13041 Loans and Advances 2804 3303 4201 Fixed Deposits 5772 8234 0 Total CA, Loans & Advances 12326 15732 17242 Deffered Credit 0 0 0 Current Liabilities 1483 1544 1995 Provisions 2248 1798 2035 Total CL & Provisions 3731 3342 4030 Net Current Assets 8595 12390 13212 Miscellaneous Expenses 0 0 0 Total Assets 13490 17809 22036 Contingent Liabilities 603 347 295 Book Value (`) 235.84 310.9 384.69
(Money Control)
29
Profit & Loss Statement
(In ` Crores)
Mar '08 Mar '09 Mar '10 Income Sales Turnover 15648 20264 21140 Excise Duty 0 0 0 Net Sales 15648 20264 21140 Other Income 683 502 958 Stock Adjustments 0 0 0 Total Income 16331 20766 22098 Expenditure Raw Materials 18 20 0 Power & Fuel Cost 106 125 0 Employee Cost 7771 9975 10356 Other Manufacturing Expenses 1443 1697 2317 Selling and Admin Expenses 1214 1367 215 Miscellaneous Expenses 132 172 883 Preoperative Exp Capitalised 0 0 0 Total Expenses 10684 13356 13771 Operating Profit 4964 6908 7369 PBDIT 5647 7410 8327 Interest 1 2 0 PBDT 5646 7408 8327 Depreciation 546 694 807 Other Written Off 0 0 0 Profit Before Tax 5100 6714 7520 Extra-ordinary items 0 -1 0 PBT (Post Extra-ord Items) 5100 6713 7520 Tax 630 895 1717 Reported Net Profit 4470 5819 5803 Total Value Addition 10666 13336 13771 Preference Dividend 0 0 0 Equity Dividend 1902 1345 1434 Corporate Dividend Tax 323 228 240 Per Share data Annualised Shares in issue (lakhs) 5719.96 5728.3 5728.3 Earnings Per Share (`) 78.15 101.58 101.3 Equity Dividend (%) 665 470 500 Book Value (`) 235.84 310.9 384.69
(Money Control)
30
Financial Ratios
Current Ratios
Current Ratio = Current Asset
______________
Current Liability
Particulars Infosys
Current assets (in ` crores) 5507
Current liabilities(in ` crores) 1162
Current ratio 4.7:1
The current ratio of the company Infosys presently is 4.7:1 which is quite pleasant position any company in an IT sector would like to place itself due to the global stuff present today.
Liquid Ratio
Liquid Ratio=Quick Assets
Quick Liabilities
Particulars Infosys
Quick assets (in ` crores 7798
Quick liabilities(in ` crores) 1162
Liquid ratio 6.7:1
The liquid ratio of the company Infosys presently is 6.7:1 which is very good position in comparison to the global recession placed by the company in the European countries and the north America.
Gross Profit
Gross Profit Ratio= Gross Profit * 100
Sales
31
Particulars Infosys
Gross Profit(in ` crores) 5871
Sales(in ` crores) 13149
Gross Profit Ratio 44.65%
The gross profit of the company is 44.65% which is increasing on a yearly basis .but on the quarterly basis it has decreased due to global impact.
Net Profit Ratio
Net Profit Ratio= Net profit * 100
Net sales
Particulars Infosys
Net Profit (in ` crores) 3768
Net sales (in ` crores) 13149
Net profit ratio 22.28%
The Net Profit of the company has jumped up to 22.73% which has a good impact on the financial statements of the company’s report.
Operating Ratio
Operating Ratio= COGS+ Operating Expenses *100
Net Sales
Particulars Infosys
Operating Expenses (in ` crores) 2575
Net Sales (in ` crores) 5913
Operating Ratio 44.12%
The operating ratio of the company is 44.21% which is the highest of all the IT sector companies in India.
Returns on Shareholders Equity
Returns on Shareholders Equity= Net Profit * 100
32
Share Holders Fund
Particulars Infosys
Net Profit (in ` crores) 3783
Share Holders Fund (in ` crores) 11162
Returns 33.89%
The return on Shareholders fund for the company Infosys has decreased on quarter basis because of the lack of global orders basically from North America and other countries.
Return on Capital Employed
Return on Capital Employed= EBIT *100 Capital Employed
Particulars Infosys
EBIT (in ` crores) 5104
Capital Employed (in ` crores) 11162
Ratio 45.73%
The company is enjoying a good return on the capital invested on employee has the ratio is increasing continuously.
(Infosys Annual Report, 2009-10)
33
SWOT Analysis of INFOSYS
Strengths
• Financial Strength: Infosys is in a strong financial position. Its turnover was ` 22268 crores in FY
2009-2010. It has a strong capital base to expand.
• Domain Expertise: Finacle Solutions is a strong brand in the banking sector.
• Skilled work force: Indian workforce has a high skill level in Information Technology. Trained IT
personnel often speak good English and are sensitive to western culture. Infosys conducts
comprehensive training programs for their employees. New recruits from colleges are trained on new
processes and technologies. As they reach the higher levels, they are trained on project management and
later are sent for management development programs, followed by leadership development programs.
• Strong Brand: Infosys is a strong and well known brand in the Indian IT sector. They have won
various awards for excellence. Their superior product range and process execution has helped them
develop a long standing relationship with their clients.
• Customer Based delivery Model: Its customer based delivery model helps them provide the customers
a highly customised product in tune with their specific needs.
• Global Presence: Infosys has 63 offices around the world. Its presence has helped it approach new and
provide its existing customer better services.
Weaknesses
• Dependence on US markets: Infosys depends largely on the US markets for its revenues (59% from
USA).
• Inability to get major revenue generating contracts in the US: Infosys hasn’t yet been largely
successful to get the US Government. Such contracts are largely profitable and Infosys is missing out
on lucrative contracts.
• Small company in comparison to global competitors: Infosys doesn’t generate much revenue when
compared to its global competition like Hewlett-Packard, IBM, Accenture, etc.
34
• As Infosys tends to work at operational level, their customers raise doubts over its high end
management consultancy.
• Dependence on a small number of clients: Infosys revenues are highly dependent upon a small
number of clients, and the loss of any one of our major clients could significantly impact their business.
Opportunities
• Expand in new geographies like Europe, China and Middle East: Expansion into new territories will
help Infosys to achieve greater stability. China is a great opportunity as it is undergoing a huge
industrial revolution
• New customers going for cost effective services: Due to the current economic climate many
companies are going for cost effect services and products. Infosys has a great competitive advantage
here and should try to capitalise on the opportunity.
• Acquire companies to gain domain expertise in various sectors.
• Markets like Latin America and Eastern Europe can also provide a cost advantage to companies.
Threats
• Competition from other countries: India isn’t the only company undergoing rapid expansion. Indian
IT companies could face a threat from companies in countries like China or Korea.
• High dependency on US Markets: Market fluctuations in the US market may cause fluctuations in
their incomes.
• As their Revenue is mostly dependent on foreign markets the fluctuations in currencies may affect
results of their operations.
• Rising wages in India: Due to rising wages in India, the cost benefits that the IT sector enjoyed might
not be available in the future.
• Technology Obsolescence: Technology becomes obsolete very quickly, so often the technologies and
services provided by such companies are very costly.
(Infosys Annual Report, 2009-10)
Marketing Strategies
PRODUCTS AND SERVICES
(Infosys Technologies website)
IndustriesInfosys Technologies offers services to the
following industries
• Aerospace and Defense• Airlines• Automotive• Banking and Capital Markets• Communication Services• Consumer Packaged Goods• Discrete Manufacturing• Education• Energy• Healthcare• High Technology• Hospitality and Gaming• Insurance• Life Sciences• Logistics and Distribution• Manufacturing• Publishing• Resources• Retail• Studios and Networks• Utilities
• Lifecycle Management• Manufacturing Process and Plant Solutions• Product Engineering
Engineering ServicesInfosys offers concept-to-market R&D and engineering services, which help its clients to improve their product
operations. The services focus on the complete engineering value chain of
different industries. Following engineering services are offered
• Core Process Excellence• Information & Technology Strategies• Learning & Complex Change• Next Generation Commerce• Product Innovation
Consulting ServicesThe consulting services offered by Infosys are meant to make its clients stronger and more competitive and also make them capable to manage global business more efficiently. Following consulting services are
offered
• Collaborative Analytics• Infosys ActiveDesk• Infosys iProwe• Infosys mConnect• Infosys Unified Communications and Collaboration (UC)
ProductsInfosys has got the following products and platforms that offer holistic and integrated transformation approach.
• Core Banking• e-Banking• Mobile Banking• Treasury• Finanz Tools• CRM• Alerts• Wealth Management
Finacle SolutionsFinacle solutions are meant for the banking industry. Following are the
solutions provide
35
IT ServicesThe IT Services offered by Infosys include
the following
• Application Services• Architecture Services• Enterprise Quality Services• Independent Validation Services• Information Management Services• Infrastructure Services• Knowledge Services• Packaged Application Services• SOA Services• Systems Integration Services
• Aerospace and Automotive• Banking and Capital Markets• Communication Service Providers• Energy and Utilities• Healthcare• Insurance• Life Sciences• Manufacturing• Media and Entertainment• Retail and Consumer Packaged Goods• Services• Transportation and Services• Offerings by Function• Business Platforms• Customer Service Outsourcing• Finance and Accounting• Human Resource Outsourcing• Knowledge Services• Legal Services• Order Management• Sourcing and Procurement Outsourcing
Lifecycle ManagementManufacturing Process and Plant SolutionsProduct Engineering
Core Process ExcellenceInformation & Technology StrategiesLearning & Complex ChangeNext Generation CommerceProduct Innovation
Collaborative AnalyticsInfosys ActiveDeskInfosys iProweInfosys mConnectInfosys Unified Communications and Collaboration (UC)
Core BankingBanking
Mobile BankingTreasuryFinanz Tools
Wealth Management
BPO ServicesOfferings by Industry
Aerospace and AutomotiveBanking and Capital MarketsCommunication Service ProvidersEnergy and UtilitiesHealthcareInsuranceLife SciencesManufacturingMedia and EntertainmentRetail and Consumer Packaged GoodsServicesTransportation and ServicesOfferings by FunctionBusiness PlatformsCustomer Service OutsourcingFinance and AccountingHuman Resource OutsourcingKnowledge ServicesLegal ServicesOrder ManagementSourcing and Procurement Outsourcing
36
PRICE
Infosys is currently working on two price models
• Traditional: Where customers are billed on the number of hours put in by the employees on a particular
project.
• New Pricing Model: Wherein customers are charged on either pay-by-use basis, outcome generated or
on the number of transactions. This model was specifically developed for cost sensitive clients.
(IBEF)
PLACE
Infosys has 63 offices and development centres in 33 countries, helping it reach out to its customers.
(Infosys Technologies website)
PROMOTIONS
Infosys doesn’t take part in advertising. Instead it believes in promoting themselves through customer
relationship managers to its clients. Infosys brand name has been synonymous with high quality service in the
industry. They also undertake cross selling practices.
(Questionnaire)
PEOPLE
Infosys has 114,822 employees (including subsidiaries) as of 2010. They invest a great deal in their
employees, as the employees undergo 3 months long training program, 2 weeks of business communication
skills development program, basic personality training , 1 month long technical training. This helps for the
employees to attain competitive skills and knowledge to help them provide better service and solutions to the
clients.
(Questionnaire)
PHYSICAL EVIDENCE
Infosys has constructed state of the art offices around the world. They provide facilities like
gymnasiums, swimming pools, recreational centres, etc, at their offices to act as a stress buster for the
employees. Understanding that the buildings consume large amounts of energy, Infosys has undertaken
measures to make design buildings as green buildings and making the current ones more energy efficient.
37
(India Carbon Outlook)
PROCESS
Traditionally Infosys worked on a delivery model which was a mix of onsite and offshore facilities to
provide services at optimal costs. But, due to the recent changes in US visa policies they had to rethink their
model and have come up with a new model which they call “extreme offshore model”. This means hiring in
India will be increased and only a few key jobs will be in the US. At the same time they have also introduced
SaaS and Cloud Computing models.
(International Business times)
(Infosys Technologies website)
(core advisor)
38
Differential Strategy
Infosys was the pioneer of the Global Delivery Model and they call themselves the best practitioner of
the same. Through the GDM, Infosys aims to offer its clients their solutions through the latest practices and
process with the highest quality of service. The key drivers of the GDM are:
• Processes:
Infosys undertakes the best and the most cost effective practices and process to provide for client value
creation.
• Global Quality:
Quality is ensured across all processes, interfaces and outputs. They have continuously benchmarked their
processes against world-class standards and models such as ISO 9001-TickIT, SEI-CMM / CMMI, ISO 20000,
ISO 27000, AS 9100, TL 9000 and ISO 14001.
• Tools:
Infosys has developed state of the art tools to keep their projects on track, like Integrated Project Management
(IPM), Project Database, InFlux, and Project Reviews by Infosys Senior Management (PRISM)
• Knowledge Management:
Infosys has a large pool of knowledge management resources. They boast of over 75000 knowledge assets most
of which are experimental projects derived from different facets of Infosys business.
• Program Management:
The project management and the project quality processes are strengthen by various custom built and third
party tools. Their project management processes are in tune with SEI CMM Level 5 requirements.
• Risk Mitigation:
Through the Infosys enterprise-wide Risk Management (IRM) framework actual and potential risks are
addressed immediately. The IRM framework was developed through a Risk Self Identification exercise.
(Infosys Technologies website)
(Questionnaire)
39
HR Policies
HR Policy During Recession
During the time of recession it became difficult for the company to provide projects to their employees.
During that time they gave most of the projects to their senior employees or rather more experienced ones. The
new employees were given an extended training for a period of 6 months rather than the usual 3 months period.
This helped them provide certain amount of work to all their employees and very few were benched.
Recruitment
While recruiting new employees, Infosys takes adequate care to identify the right candidates. Infosys
focuses on recruiting candidates who display a high degree of ‘learnability’. Analytical ability, teamwork and
leadership potential, communication and innovation skills, along with a practical and structured approach to
problem solving.
Training
Infosys conducts a training program for all new entrants. New recruits from colleges are trained on new
processes and technologies. As they reach the higher levels, they are trained on project management and later
are sent for management development programs, followed by leadership development programs.
Compensation and Benefits Policies
Every profile level has different compensation and benefit policies. With increase in profile level the
compensation and benefit policies keep getting better.
Employee Relations Policy
Under this policy they have bulletin board usage policy wherein employees can put up notices. Ex: Bike
for sale, flat on rent etc.
Dress code Policy
Infosys also follows a dress code policy wherein each day there is a different dress code to be followed.
• Monday and Tuesday – full sleeves shirt, tie and black shoes
• Wednesday and Thursday – half sleeves shirt, no tie and black or brown shoes
• Friday – casuals.
Performance improvement Policy
40
There are different activities covered under the performance improvement policy such as employee
training, certification courses and classroom training etc.
ASHI
ASHI i.e. Anti Sexual Harassment Initiative is one of the important HR policy followed in Infosys. The
implementation and administration of the Anti-Sexual Harassment Policy is to create a comfortable work
environment for all employees. When a sexual harassment complaint is lodged by an employee / Vendor /
Customer, the ASHI policy is referred to and the grievance is resolved based on the complaint, Investigation
findings, Recommendations of the Grievance redressal board (GRB).
Generic Policies
• Reward for employee policy – The employee is rewarded with vouchers, gift hampers if his work is
liked by the managers.
• Airfare policy – If the employee is sent abroad then his airfare is paid by the company itself.
• Medical insurance policy – Medical insurance is provided for the employee and his family members as
well.
• Confirmation policy – In confirmation policy the employee is confirmed as a permanent employee after
he has served the specified probation period.
• Reimbursement policy – The employee can reimburse his food expense, transportation expense and
even fees charge for certification course (if any).
• Car and House loan policy – The Company provides house and car loan at a good/less interest rate as
compared to the market.
• Project party policy – Every 3months a project party is conducted for the refreshment of the employees.
• Night Shift Allowance Policy – A night shift allowance of Rs 350/-per night is given to any employee
who has worked in night shift.
• Salary Advance Policy – Under this policy an employee can apply for his next month’s salary in
advance and can get it in the current month itself.
Career opportunities for MBAs
MBAs mostly enter INFOSYS at lower level management positions in various departments according to
their expertise. Most of the new MBAs are hired in the sales team with business development responsibilities.
(Questionnaire)
41
CSR Initiatives
Infosys employees actively participate in the welfare of the local community. The Development Centers
(DCs) in India make a difference through several Corporate Social Responsibility (CSR) initiatives.
Infosys employees organize and contribute to welfare programs, especially for underprivileged children.
They support the activities of institutes and Non-Government Organizations (NGOs) dedicated to healthcare
and education, and campaigns for skills development and community welfare.
1. Healthcare
• Conducting rehabilitation camps at tribal areas, drought hit areas, etc.
• Construction of Hospitals
• Upgrading the hospitals with significant equipment like ultrasound scanners, ambulance, significant
drugs in certain cases, etc
2. Social Rehabilitation and Rural Upliftment
• Construction of Orphanages
• Construction of common halls at Orphanages, Old age homes, etc
• Rehabilitation of Devadasis in Karnataka
• Rehabilitation of mentally retarded through other local organisations
• Rehabilitation of children on platforms, streets and slums
• Assisting the promotion of social awareness among the tribals or other backward communities where
evil practices are followed
• Donation of passenger vans to certain rehabilitation centres
Making high-quality healthcare the norm is an ongoing challenge. Since its inception, the Foundation
has initiated several activities that benefit the rural and urban poor. Apart from constructing hospital wards,
donating hi-tech equipment and organizing health camps, the Foundation also distributes medicines to
economically-weaker sections in remote areas.
3. Learning & Education
• Setting up libraries for Every Rural Kannada Medium School by donating a set of about 200 books
worth about Rs.2,000-00, under our educational project called 'Shalegondu Granthalaya'
• Donating Corpus Fund to good but economically weak schools
• Donating for the construction of additional classrooms or re-construction of old classrooms/school
building
42
• Donation of other equipments to schools like Computers, Furniture, etc
• Construction of Science Laboratories
• Assisting the promising students of economically weaker sections by means of scholarships or
contributing to pay their annual fees
4. Art
• Promotion of deprived art or culture by organising stage-shows
• Donating for such organisation which promotes such a talent
(Infosys Technologies website)
43
Awards
Infosys has won over 200 awards since its establishment. The following are some of the awards
received over the past years:
• Infosys was ranked among the top 50 most respected companies in the world by Reputation Institute’s
Global Reputation Pulse 2009.
• They have been voted the 'Most Admired Indian Company' in The Wall Street Journal Asia 200 for 10
years in a row since 2000.
• They won the Sears Holding Corporation's Partners in Progress award for the second consecutive year.
• They also won the HDS 'Diamond Award for 'Best Virtualization Strategy' and Platinum Award for
'Best Green Strategy for a Data Center'.
• Infosys was also listed in the Most Admired Knowledge Enterprises (MAKE) 2008 study and Forbes'
Asian Fabulous 50 for the fourth consecutive year.
• They were ranked among the 'Best Companies for Leaders' in a survey by Bloomberg Business Week
and Hay Group in 2009, 'India's Best Companies to Work For - 2009' in a survey by the Great Place to
Work Institute and conferred with the NASSCOM gender inclusivity award.
• Asset magazine acclaimed our Corporate Governance, acknowledging our corporate policies and
practices as among the best in the industry.
(Infosys Technologies website)
44
Conclusion
• Operating margin reducing due to the recession in the west.
• Sales have not jumped up on a year on year basis.
• Their HR policies during the recession have defiantly helped them sustain a lot of their employees.
• The Infosys brand has created a trust among their clients and this will definitely help sustain or even
grow their sales.
45
Bibliography
Internet References
(Economy watch)
(Gartner)
(IBEF)
(India Carbon Outlook)
(Indian Law Offices)
(Infosys Technologies website)
(Infosys Annual Report, 2009-10)
(International Business times)
(Maps of India, India Business directory)
(core advisor)
(Money Control)
(Derctorate of Information Technology Website)
(Cyber Media India Online Limited)
Questionnaire
1. What is Infosys’s domain expertise?
2. Who are the major competitors in your domain?
3. What is your USP to tackle the competition?
4. What is the pricing model that you use?
5. Tell us about your products.
6. What are your process models? Are there different models i.e. a general one and a flexible one?
7. What promotions activities do you take part in?
8. What are your HR policies in terms of:
a. Hiring Policies
b. Retention Policies
c. Training and Development
d. Retention Policies
e. Leave Policies
9. Were there any changes to your HR policies during recession?
10. What are the career opportunities for MBA graduates?