Transcript New Games… New Rules - Infosys

New Game. New Rules
S. Gopalakrishnan
Chief Operating Officer and Deputy Managing Director
Safe Harbor
Certain statements made in this Analyst Meet concerning our future growth prospects are forwardlooking statements, which involve a number of risks and uncertainties that could cause actual
results to differ materially from those in such forward-looking statements. The risks and
uncertainties relating to these statements include, but are not limited to, risks and uncertainties
regarding fluctuations in earnings, our ability to manage growth, intense competition in IT services
including those factors which may affect our cost advantage, wage increases in India, our ability to
attract and retain highly skilled professionals, time and cost overruns on fixed-price, fixed-time
frame contracts, client concentration, restrictions on immigration, industry segment concentration,
our ability to manage our international operations, reduced demand for technology in our key focus
areas, disruptions in telecommunication networks or system failures, our ability to successfully
complete and integrate potential acquisitions, liability for damages on our service contracts, the
success of the companies in which Infosys has made strategic investments, withdrawal of
governmental fiscal incentives, political instability and regional conflicts, legal restrictions on raising
capital or acquiring companies outside India, and unauthorized use of our intellectual property and
general economic conditions affecting our industry. Additional risks that could affect our future
operating results are more fully described in our United States Securities and Exchange
Commission filings including our Annual Report on Form 20-F for the fiscal year ended March 31,
2004 and quarterly report on Form 6-K for the quarter ended June 30, 2004. These filings are
available at www.sec.gov. Infosys may, from time to time, make additional written and oral forwardlooking statements, including statements contained in the company's filings with the Securities and
Exchange Commission and our reports to shareholders. The company does not undertake to
update any forward-looking statements that may be made from time to time by or on behalf of the
company.
© Infosys Technologies Limited 2004-2005
Analyst Meet 2004 | New Game. New Rules.
Slide 2
Global Leadership through Rapid Differentiation
and Rapid Growth
Role Of IT In Enhancing Business Competitiveness
Run the
Business
GDM
Transform the
Business
Grow the
Business
GDM+
Business Solutions
Using GDM
»Technology services
»Technology Based Solution
»Enhance competitiveness
»Reducing unit cost
»Reducing Total Cost (TCO)
»Increase revenue for client
»Offshore strategy
»Modular Global Sourcing
»Increase profitability for clients
»Efficiency focus
»Effectiveness focus
»Business results focus
© Infosys Technologies Limited 2004-2005
Analyst Meet 2004 | New Game. New Rules.
Slide 3
Innovation @ Infosys
Sourcing
Efficiency
New Revenues
Operational Efficiencies
Client’s
need
Areas of
Innovation
Key Strategic
Investments
Examples / Results
of Innovation
Domain /
Solution
Excellence
» Infosys Consulting
» Grooming consulting mindset
» Domain Competency Group
» Global alliances
» Knowledge management
» Vertical Solutions - Real Time Engine, Anti Money
Laundering (AML) Compliance, Enhanced Process
Automation (RFID)
» Over 35% revenues from new services & solutions
» Growing number of $ 50 mn + clients
Delivery
Excellence
» SEI CMMi / PCMM Level 5
» Pride: Business Platform
» Baldridge / Six Sigma
» Ubiquitous IT environment
» World-class infrastructure
» Integration of CMM with Baldridge and Six Sigma CFPM for
IT services excellence
» Resulting in over 85% repeat business and many zero
defect projects
» Extensive world-class campuses with state-of-the-art
technology infrastructure
Technology
Leadership
» Software Engineering &
Technology Labs
» Education & Research unit
» R&D aligned to new services
» Intelligent Production Support Platform delivering 30-50%
higher productivity in applicable projects
» InFlux reduces development effort of analysis tools by
70%. Saves $350,000 in development costs
Talent
Leadership
» Talent acquisition engine
» Infosys Leadership Institute
» Over 9,000 employees added in FY04, the trend continues
» Facility to train 4,000 employees simultaneously at Mysore
Sourcing
Excellence
» Strategic Global Sourcing
» Progeon
» Global delivery centers
»
»
»
»
© Infosys Technologies Limited 2004-2005
Pioneered Global Delivery Model in the 80s and 90s
Announced new “Modular Global Sourcing Model”
Integrated consulting with GDM
Integrating BPO, IT Services and Infrastructure Management
Analyst Meet 2004 | New Game. New Rules.
Slide 4
“Enhanced Maintenance” initiative to create a differentiated
product in an increasingly commoditized market, while reducing
costs & risks for clients
CIO Agenda
Infosys Agenda
Lower Total Cost of Ownership
» Lower non-discretionary spend
» Lower per-unit cost of non-discretionary spend
» Better predictability of maintenance
» Mature offshore users – continued economics
Need for Differentiation
» Service offerings similar from ALL vendors
» Few tools and little thought leadership in
marketplace but increasing commoditization
Innovative Tools… Intelligent Production Support Platform (IPSP) and 6 Sigma
Reduce Business Costs and Risks
» Predictable revenue stream that could be
threatened with a competitive offering
» Greater system and client ownership –
changing measures of performance
» Increased costs of shift work
» Increased productivity necessary for long-term
projects to maintain margins while prices drop
Consolidate & Standardize
» Eliminate and automate overhead activities
» Improve flexibility / reusability of technologies
» Facilitate Multi-vendor management
Reduce MCO = fn (Effort, Incidents, Price/Hr) + Overheads + Opportunity cost
Reduce Risks
» Knowledge vested in geographically distributed
and outsourced resources
» Multi-vendor / multi-location – ownership issues
© Infosys Technologies Limited 2004-2005
Manage People Risks
» Increased shift-work by same skill-set –
increasing dissatisfaction
» Reduce knowledge dependence to control risks
due to attrition
Analyst Meet 2004 | New Game. New Rules.
Slide 5
Modular Global Sourcing: Conceptual Shifts,
Changing Paradigms
To
From
THINK
Enterprise
STRUCTURE
Modular
ACT
Global
ACCELERATE
Results
Narrow focus
Static Roadmap
Black box
Lock-in
Resources
Static roles
Reactive
Fear of change
Enterprise-wide view
Dynamic Compass
Transparency
Flexibility
Deliverables
Just-in-time skills
Proactive
Embracing change
Shift in focus from “Taking over people / assets” to “Making clients competitive”
© Infosys Technologies Limited 2004-2005
Analyst Meet 2004 | New Game. New Rules.
Slide 6
End-to-End Solutions: Consulting + Enterprise
Solutions + Business Process Management
Infosys Consulting
Progeon
Providing High-End Consulting to enable
clients gain Competitive Advantage
IC
Reducing the cost of Operations by
effective use of Outsourcing
BPO
ES
Enterprise Solutions
Package Implementation & IT support driven by
Functional Expertise & Delivery Excellence
© Infosys Technologies Limited 2004-2005
Analyst Meet 2004 | New Game. New Rules.
Slide 7
“1:1:3” Model of consulting will allow more focus on each client’s
business and set a new standard for return on consulting fees
© Infosys Technologies Limited 2004-2005
Analyst Meet 2004 | New Game. New Rules.
Slide 8
Growing Larger Relationships and Managing
Complex Projects
FY 2005
Q1
FY 2004
Q4
FY 2004
Q1
141
131
113
Five million dollar + clients*
53
51
37
Ten million dollar + clients*
27
25
19
Twenty million dollar + clients*
15
12
10
Thirty million dollar + clients*
8
6
4
Forty million dollar + clients*
5
4
3
Fifty million dollar + clients*
3
3
-
Million dollar + clients*
*Last Twelve Months
» Building Infosys Consulting and Strategic Global Sourcing (SGS) teams with
professionals having extensive experience in managing large engagements
» Consolidating a Point-of-view on Strategic Outsourcing based on the rich experience over
years. Validated with analysts and key clients
© Infosys Technologies Limited 2004-2005
Analyst Meet 2004 | New Game. New Rules.
Slide 9
Enabling Scalability Through Rapid Talent
Acquisition
32,000
28,000
24,000
20,000
16,000
12,000
8,000
4,000
0
» Winning the Talent War
» Record growth in Infoscion
community
» Multicultural workforce, integrated
through performance ethic
» 33 Nationalities
25,634
27,939
15,876
9,831
3,766
10,738
5,389
FY99 FY00 FY01 FY02 FY03 FY04 1Q'05
» Greater velocity of hiring, aligned
with growth plans
Employee Growth
» Highly selective recruitment process,
focused on “Learnability”
Interviewed & Tested
10.5%
» Robust processes and systems
» Capacity to test 10,000 people in 7
cities on the same day
» Strong evaluation processes to
ensure the quality of recruitment
© Infosys Technologies Limited 2004-2005
Applicants
100%
Offers
1.0%
Analyst Meet 2004 | New Game. New Rules.
Slide 10
Scaling up Education and Training
» World-class training infrastructure in Mysore, capacity to concurrently
train 4,000 employees with residential facilities
» Highly scalable education and training infrastructure
»
»
»
»
»
Q1FY05 Foundation Training
> 55,000 days
Q1FY05 Middle Level
> 16,000 days
Q1FY05 Managerial Training
> 10,500 days
Average Knowledge Assets used
> 2,800 per day
100 Students from University of Mauritius
» Innovative Campus Reach Program
» 41 campuses
» 61% expressed intent to partner
» 30 faculty from Engineering Colleges undergo Faculty Enablement Program
» ES University in Hyderabad. 250+ consultants trained over last 6
months. Courses certified by Foundation For International Services
© Infosys Technologies Limited 2004-2005
Analyst Meet 2004 | New Game. New Rules.
Slide 11
Thank You