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Infosys case study by Harvard for Infosys consulting

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Infosys case study by Harvard for Infosys consulting

  1. 1. INFOSYS CONSULTING GROUP 7
  2. 2. CONTENT INDUSTRY OVERVIEW. COMPANY DETAILS. CORPORATE STRATEGY & BUSINESS STRATEGY. VALUE CHAIN ANALYSIS. SWOT MCKINSEY’S 7 S MODEL. PORTER 5 FORCES. RED OCEAN STRATEGY.
  3. 3. Infosys limited. • Infosys provides software development, maintenance and independent validation services to companies in finance, insurances, manufacturing and other domains. • Key products & services • 1. NIA – Next Generation Integrated AI Platform (formerly known as Mana) • 2.Infosys Consulting – a global management consulting service • 3.Infosys Information Platform (IIP) – Analytics platform • 4.EdgeVerve Systems which includes Finacle, a global banking platform • 5.Panaya Cloud Suite.
  4. 4. What Infosys does? This work covers a wide range of engineering, marketing, management and some other sectors that I am not quite familiar with. Infosys has a plethora of clients and the work it does for them varies. Starting from something as simple as writing a small code for turning an alarm on it can range to: 1. Designing/testing a device to be used in treating a raging disease 2. Designing/analyzing/simulating mechanical components of airplanes, engines etc. 3. Providing methods to increase the revenue for some companies and cut their costs 4. Advise companies on their production/marketing strategies 5. Designing/creating tools to increase the productivity of their clients 6. R&D in some software fields
  5. 5. Vision and mission • Vision “To be a globally respected corporation that provides best-of-breed business solutions, leveraging technology, delivered by best-in-class people.” • Mission "To achieve our objectives in an environment of fairness, honesty, and courtesy towards our clients, employees, vendors and society"
  6. 6. Infosys Business Line
  7. 7. Infosys timeline 1981 Infosys is set up by N.R. Narayana Murthy and six other engineers in Pune with an initial capital of $250. 1983 The company relocates its corporate headquarters to Bangalore, one of the first software companies to set up operations Bangalore. 1993 Infosys lists on the Indian exchanges and is among the first in India to introduce employee stock-option plan, a move to attract and retain talent. 1999 It becomes the first Indian company to list on the Nasdaq, raising the profile of the Indian outsourcing industry in the United States. 2004 Started Infosys consulting. Reaches annual revenue of 1 billion. 2006 Mr. Murthy steps down as chairman after 25 years at the helm of the firm after reaching the company's retirement age of 60, continues as non-executive chairman and mentor. 2008 Annual net profits of 1 billion. 2012 Infosys acquires Zurich- based Lodestone for 30 million Swiss francs or $350 million (over Rs.1,900 crore). 2016 Touches revenue of 10 billion.
  8. 8. Infosys Consulting Timeline 2004 Management consulting practice created within Infosys 2012 Zurich, Switzerland based Lodestone acquired by IC to expand global offerings 2014 Global practices rebranded as Infosys Consulting 2015 Houston, Texas based Noah consulting acquired to strengthen data management capabilities
  9. 9. Infosys consulting story
  10. 10. Infosys consulting revenue Infosys consulting Gmbh- Rs.690cr. Revenue with loss of Rs10cr. Infosys consulting ag- 460 Cr. Revenue with profit of 52 cr. Infosys consulting sp. Z.o.o- 115 Cr. Revenue with profit of 8 cr. Infosys consulting Sanghai- 105 Cr. Revenue with loss of 57 cr.
  11. 11. Corporate strategy To be a globally respected and sustainable company Help top organizations stay competitive, win new markets and increase shareholder value by leveraging the full potential of the latest disruptive technologies.
  12. 12. Business Strategy Scale Agile Digital- Invest in digital capabilities & priority services Energize the Core -Infuse AI and automation, Expand Skilling -leveraging NIA Re-skill talent at scale for us and our clients Drive Localization -Hire locally in markets, local delivery & training Global Delivery Model :Producing where it is most cost effective and selling where it is most profitable. Moving UP the value chain: Getting involved in a software development project at the earliest stage of the life cycle. PSPD Model: Predictability of Revenues, sustainability of revenues, Profitability, De-Risking for Risk Management.
  13. 13. Actions taken to achieve business strategy 1. Expansion into low cost countries like Mauritius, Philippines, Thailand, Mexico etc. 2. Emphasis on delivering high value services 3. Currency hedging for predictability of revenues. 4. Investing heavily in training centers and research and development.
  14. 14. IT-INDUSTRY ANALYSIS Information Technology in India is an industry consisting of two major components: IT services and business process outsourcing(BPO). The sector has increased its contribution to India's GDP from 1.2% in 1998 to 7.7% in 2017. According to NASSCOM, The sector aggregated revenues of US$160 billion in 2017: •Export revenue standing at US$99 billion •Domestic revenue at US$48 billion, growing by over 13%. There is no dearth of IT job opportunities in India. In fact, India is expected to overtake the US to have the largest number of software developers in 2018 (52 lakh developers in India against America’s 42 lakhs).
  15. 15. CURRENT MARKET TREND
  16. 16. Year wise market share change
  17. 17. SWOT Analysis Strengths Experienced and successful leadership team • IC management team has been a success over last decade by successfully predicting trends in the industry. Streamlined processes and efficient operation management • IC is one of the most efficient firms in its segment. Strong relationship with existing suppliers • IC has strong relationship with its suppliers and other members of the supply chain. According to the case, the organization can increase products and services by leveraging the skills of its suppliers and supply chain partners. Successful Go To Market Track Record • IC has a highly successful track record of both launching new products in the domestic market but also catering to the various market based on the insights from local consumers.
  18. 18. SWOT Analysis Weaknesses IC business model can be easily replicated by competitors • According to authors of the case, the business model of Ic Infosys can be easily replicated by players in the industry. Inventory Management • Based on the details provided in the Infosys Consulting in 2011 case study, we can conclude that Ic Infosys is not efficiently managing the inventory and cash cycle. According to Robert A. Burgelman, Debra Schifrin , there is huge scope of improvement in inventory management. Organization Culture • It seems that organization culture of Ic Infosys is still dominated by turf wars within various divisions, leading to managers keeping information close to their chests
  19. 19. SWOT Analysis Opportunities Lucrative Opportunities in International Markets • Globalization has led to opportunities in the international market. Ic Infosys is in prime position to tap on those opportunities and grow the market share. E-Commerce and Social Media Oriented Business Models • E-commerce business model can help Ic Infosys to tie up with local suppliers and logistics provider in international market. Social media growth can help Ic Infosys to reduce the cost of entering new market and reaching to customers at a significantly lower marketing budget.
  20. 20. SWOT Analysis Threats • Culture of sticky prices in the industry • Ic Infosys operates in an industry where there is a culture of sticky prices • Growing Protectionism • Ic Infosys should hedge the risk against growing protectionism ranging from – storing data into international market to diversifying risk by operating into countries at different economic cycle • Growing dominance of digital players • Amazon, Google, Microsoft etc. can reduce the maneuvering space for IC Infosys and put upward pressure on marketing budget.
  21. 21. Primary Activities 1. Service Design- • 1+1+3 System • Value Realization Model 2. Knowledge Management 3. Delivery System- Global Delivery System used to deliver offsite technology solutions. 4. Moment of Truth- • Understanding the business logic for a client’s requirement of a new technology. 5. Customer service- • Delivering value by providing measurable improvement in the process metric. • Providing technological solutions keeping in mind the competitive benchmarking and meeting client expectations.
  22. 22. Support Activities • Human Resource Management- • Consultants with “Cultural Intelligence”, tested for quality through part of recruitment structure called Global Impact. • Opportunity for employees to fast-track their careers based on their performance. • Upward feedback system along with flat organisation structure. • Process Information- The support team helps customers develop high performing and reliable solutions. • Physical Aspect- Building infrastructure services and Cost-effective data centres. • Reliability- Dedicated team to ensure services are delivered on time without delay.
  23. 23. Mackinseys 7S Model Style - LEADERSHIP • Infosys Leadership Institute” • open door policy, • continuous sharing of information, • takes inputs from employees in decision making, • builds personal rapport with employees Staff – HUMAN RESOURCES • “Knowledge Based Industry” (90% are engineers) • Emphasis on academic records • Technical skills • Ability to learn • 2.65 per cent of its revenues on up gradation of employees skills
  24. 24. Mackinseys 7S Model Strategy • Client focused strategy (custom built soft wares) • Quality driven model • Strong Engagements with existing clients • Value added services to new clients • Geographical Expansion Organizational Structure • Free Form • Flexible Team Structure • Equality among employees Skills • Domain specific Certifications • Competency Building» • Infosys has been • CMM-Level 5 certified for its process capabilities
  25. 25. Mackinseys 7S Model Shared Values • Customer Delight • Leadership by Example Integrity and Transparency • Pursuit of Excellence
  26. 26. Porter’s Five Forces Model
  27. 27. Rivalry among competing sellers Moderate • More number of competitors of equal size and competitive strength • Competitors are relatively new to global delivery model • Relatively Differentiated product • Relatively easy to imitate the offerings • High Industry growth Threat of new entrants High • Low capital requirement • High industry growth • Less government regulations in selected countries • Existing industry members are looking to expand into other geographical areas
  28. 28. Threat from substitutes •Good substitutes are not readily available Low Bargaining power of suppliers •The increasing number of engineers in the market •More opportunities with higher industry growth rate •Lack of skilled personnel Moderate Bargaining power of buyers •Brand loyalty and networks •Lesser number of experienced players •Less differentiated offerings Moderate
  29. 29. PESTEL Analysis
  30. 30. Political Factors Governance System – The present governance system in the industry is facing challenges and thus Infosys has to keep a close eye on the change in policies. Changing policies with new government –that there can be a transition of government in near future in most prominent market. Infosys has to prepare for this eventuality as it can lead to change of priorities for the sector. Regulatory Practices – Infosys has to manage diverse regulations in the various markets it is present in. Over the last few years Technology & Operations has witnessed an increasing regulatory scrutiny. Political stability in the existing markets – Infosys operates in numerous countries so it has to make policies in each country based on the Technology & Operations in the country and industry specific requirements. Given the recent rise in populism across the world I believe that Infosys can see similar trends and may lead to greater instability in its existing markets.
  31. 31. Economic Factors Increasing liberalization of trade policy can help Infosys Consulting to invest further into the regions which are so far offlimits to the firm. Government intervention in the Technology & Operations sector can impact the fortunes of the Infosys Consulting. Downward pressure on consumer spending – Even though the consumer disposable income has remain stable, the growing inequality in the society would negatively impact consumer sentiment and thus impact consumer spending behavior. Efficiency of financial markets – Infosys Consulting can access vibrant financial markets and easy availability of liquidity in the equity market to expand further globally. Economic Cycles – The performance of Infosys Consulting in Technology & Operations is closely correlated to the economic performance of the country.
  32. 32. Social Factors Leisure interests – The customers that Infosys Consulting targets give a very high preference to experiential products and services. The firm needs to spend more energy to meet the preferences and expectations. Attitude towards health and safety – With increasing liberalization the attitude towards health and safety are getting lax. Infosys Consulting needs to stay away from these attitudes as the cost of failure is too high. Demographics – For the Technology & Operations sector, Infosys Consulting has demographics on its side. Societal norms and hierarchy – The society as portrayed in the case study is different from the home market of Infosys Consulting. It should strive to build a local team that understands the societal norms and attitudes better to serve the customers Access to essential services – According to the case study - In the last decade and half the wider population in getting access to essential services. This has been a result of increasing investment in public services.
  33. 33. Technological Factors Research and development investment at both macro level and micro level in Technology & Operations is increasing. It can lead to industrywide disruption through innovation of new products & services. Lowering cost of production – The latest technology is fast lowering production and servicing cost in the Technology & Operations sector. Infosys Consulting has to restructure its supply chain to bring in more flexibility to meet both customer needs and cost structures. Developments and dissemination of mobile technology has transformed customer expectations in the Technology & Operations sector. Infosys Consulting has to not only meet and manage these expectations but also have to innovate to stay ahead of the competition. Technological innovation is fast disrupting the supply chain model of Infosys Consulting as it is providing greater access to information to channel partners, leading to higher profit sharing. Maturity of technology – The technology in the sector is still at nascent stage and most players are vying for new innovations that can enable them to garner higher market share.
  34. 34. Environmental Factors Customer activism – Greater awareness among customers have also put environmental factors at the center of Infosys Consulting strategy. Customers expects Infosys Consulting to adhere to not only legal standards but also to exceed them to become responsible stakeholder in the community. Renewable technology is also another interesting area for Infosys Consulting. It can leverage the trends in this sector. Many governments are providing subsidies to invest in the renewable sector. Waste management especially for units close to the urban cities has taken increasing importance for Infosys Consulting. Government are fast coming up with strict norms for waste management in the urban areas. Recycling is fast emerging as a norm rather than a -good thing to do in many economies. Infosys Consulting has to make plans to adhere to regulations and meet consumer expectations in the Technology & Operations sector. Environmental norms are also altering the priorities of product innovation. In many cases products are designed based on environmental standards and expectations rather than catering to traditional value propositions.
  35. 35. Legal Factors Time take for business cases in court – some countries even though follow international norms but the time for resolution often run in years. Infosys Consulting has to carefully consider average time of specific cases before entering an international market. Legal protection of intellectual property, patents, copyrights, and other IPR rights in various countries. How Infosys Consulting will be impacted if there is not enough protection. Business Laws – The business laws procedure that government follows. Are these norms consistent with international institutions such as World Trading Organization, European Union etc. Data protection laws – Over the last decade data protection has emerged as critical part of not only privacy issues but also intellectual property rights. Infosys Consulting has to consider whether the country have a robust legal and technological mechanism to protect against data breaches or not.
  36. 36. Red-Blue Ocean Strategy: Infosys lies in the red ocean. 1. High competition in both consulting as well as Software technology solution Business. 2. Both domestic and international companies are functioning in the Indian markets.

Hinweis der Redaktion

  • Lodestone increased the Infosys Consulting client base by nearly 200 companies across different industry segments, and at the time of acquisition, Infosys’ consulting and systems-integration business contributed to 31% of total revenue.
    In 2015, Infosys acquired Noah Consulting LLC for $70m USD.[17] Noah Consulting is based out of Houston, TX and primarily serves customers in the oil and gas industry, providing information and technology services. As of September 2017, it was unclear whether the brand would be a subsidiary or merged into the larger Infosys Consulting
  • ITL had been in the industry for 30 years in providing IT services.
    The offerings include global delivery (1 IC+1 ITC + 3 others) and VRM

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