The quest for the value

1
The quest for the value

• Group A1. Flying high consultants are back
• Lucy Solomon
• Hae Seung Jung
• Gerd Schreier
• John Bredigan
• Fyodor Suzdalev
• Sridhar Vedala

2
Infosys Agenda

• Infosys what is it about?
• Indian software industry
• Competitive advantage analysis
• Strategic directions and positioning
• Core competencies
• Market segmentation
• Marketing mix
• Major risks and contingency planning

3
Infosys global presence
4
Infosys clients
5
Infosys mission, values and value proposition

• Mission Statement Powered by intellect
  Driven by values
• From the beginning organisational values
  reinforced by consistently walking the talk
• Trust is core value apparent throughout Infosys
  example financial statements
• Strong sense of purpose beyond just profit

6
Indian Software Industry Trends

• Indias fastest growing segment Growth of 15
  during 2002-03

• Software/Services major component of IT industry
  with 30 growth

7
Indian Software Industry Global Demand

• Greater demand for IT enabled services such as IT
  Strategy consulting and Business Process
  Outsourcing
• Demand to grow by 50
• ( 87 billion) by 2008

8
Indian Software Industry Relative Position

• India is the most
• mature compared to
• skills surplus countries
• like China, Ireland and
• Singapore

9
Infosys external analysis

• Opportunities
• Changing Business Paradigm Perfect match
  between strategy and IT
• Extended Customer Lifetime Value Build on top
  of its already available customer base
• Higher Margins Moving up the value
  chain, from pure IT-consulting to strategic

10
Infosys external analysis

• Threats
• Endanger Reputation great reputation as a high
  quality IT services provider
• Competition former consultancy companies have
  strong established reputation and customer base
• Lack of required skills and experience needto
  invest in human capital with strategy skills

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Infosys Strengths
Tangibles Financial capabilities, Infrastructures
Resources Capabilities
Skilled Workers, High Ethics
Increased profit share price
Technical Proficiency
Customer relations
Intangibles Customer relation, Quality, Human
capital, India
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Infosys Weaknesses
A large pool of talented professionals, but
primary skills of these professional are
technical
Technical Workforce
Evolved and geared to provide purely IT
consulting service
Organizational Structure
Changing the profile of its workforces to
business strategy could give wrong signal to its
employees
Trust problem
13
Technology Consulting?????
Strategy consulting????
14
Infosys future directions
15
Moving up along the value chain
Project management
Infosys now
Technical services
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Product differentiation matrix
High-end
McKinsey
Accenture
Infosys
Strategy
IBM
Indian IT companies
Oracle
Low-end
Broad
Restricted
Technical services
17
Absolute cost advantage matrix
high
McKinsey
Accenture
Cost
IBM
low
Indian IT companies
Infosys
Strategy or implementation
Strategy and implementation
Services
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Bridging the Gap Capabilities
Acquire right resources
Build knowledge base
Transform customer perception
Transform organizational structure
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Market Segmentation

• Target markets who require
• Technology solutions Outsourcing
• Integrated Technology
• Strategy solutions

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Market Segmentation

• Existing Customers
• Pilot programs
• Easier transition and lower risk

• North America
• 1st biggest market
• Mature companies that require cost effective
  solutions

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Marketing Mix

• Product Peculiarities
• Intangibility
• Simultaneity
• Perichability

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Marketing Mix

• Branding
• Synonymous with quality
• Results driven business technology
• System integration
• Implementation

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Marketing Mix

• Pricing Strategy
• Move from a value for money to a premium pricing
  strategy
• Target the inelastic market of top executives
• Project based pricing vs day charging

• Distribution Strategy
• Pilot projects to current client portfolio
• Expand in USA, Europe and Asia
• Focus on technology reliant industries
• Target companies considering restructuring
  programs
• Developing countries to build infrastructure

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Marketing Mix

• Promotional Strategy
• Strong focus on PR and Media Relations
• Importance of Word of Mouth Testimonials
• Events
• University relations

25
Major risks
Risk impact matrix

• Market uncertainty
• Positioning uncertainty
• Technological uncertainty
• Growing from the core business uncertainty
• Knowledge sharing challenge
• Corporate culture and values keeping challenge
• Price competition in the core business/financial
  risk

high
Positioning
Price war
Growth
Technology
Risk
Market
Culture
Knowledge
low
Impact
low
high
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Contingency Planning
Technology Risk Management
Business Risk Management
Integrated Risk Management
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Contingency Planning

• Build interactive and transparent communications
  with core customers
• Exploit the gatekeeping position of the core
  customers
• Anticipate technology innovations
• Be tolerant to failure
• Create the new generation of knowledge management
  system
• Keep current model of motivation for strategy
  consulting business
• Conduct conservative financial policy

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Questions?