Transcript Infonet
Infonet in France
Best in France Case Study
15 December 2003
Infonet France
Established in France since 1980
Subsidiary of Infonet Services Corp
(“ISC”), based El Segundo, California
Business of Global Managed Corporate
Data Networks
10% Global market share, 15% in France
Competitors in France, as worldwide: MCI
Worldcom, AT&T and Equant (each 15%
globally)
Best in France - Infonet France
2003 Figures
Global Total Revenues (2003):
$654,196,000
Net Loss (2003): $219,936,000
but $428,979,000 in cash and short
term investments and no debt
France: 4% of 2003 Global Revenue (viz
approx $26 million)
Best in France - Infonet France
Infonet’s Business Model 1/2
80% of ISC equity held by handful of national
telecoms operators
Telstra, Telia, Swisscom, KPN,
Telefonica, KDD
Historically, and still in a large number of
markets, World Network managed by national
operator-managed JVs in which ISC only a
minority shareholder
Best in France - Infonet France
Infonet’s Business Model 2/2
Distinction between “A-end” business and “Bend” business
ISC continues to act largely as an armslength “middleman”
selling access to the World network to local
affiliates
taking a percentage on provision of international
services intra-group even where 100% owner of the
affiliates themselves
Best in France - Infonet France
Why Infonet came to France
International growth is key business driver
World Network coverage of 180 countries,
physical presence in 80
Multinational clients demand continual
increases in geographical extent and quality
of coverage
No question of not having a presence in
France: major business centre
EMEA now represents 60% of ISC revenues
(then Asia, US in third place)
Key question rather one of how best to
develop the French A-end business
Best in France - Infonet France
Corporate values 1/2
Results, results, results
Uncompromising
use of metrics
Infonet Affiliate rule: maximum 1 employee per
$1m gross revenue
Country managers held accountable for
revenue targets
Monthly performance of each manager ranked
against 80 international peers: rankings
circulated worldwide
Best in France - Infonet France
Corporate Values 2/2
Corporate values instilled
Need for results the real core value?
Codes of ethics and “reactivity” value applied
worldwide
However, tacit acceptance that local company
knows the local market best: autonomy inherent
in the “franchisee” system
Affiliate is often majority owned by a national
operator, making Infonet “value inculcation”
somewhat problematic
Relationship between ISC and affiliates more
contractually driven than by values
Also, perhaps, the importance of open communication
all employees (whatever their function) must
speak more or less perfect English
Best in France - Infonet France
Company Products & Services
Operational necessity for standardized Global
Offering (linkages, routers): technology is therefore
specified and “enforced” centrally by ISC
Issues arise from centralized approach: US
infrastructure differences, different client demands
– subject of lobbying from affiliates
E.g. DSL pilot in France
Best in France - Infonet France
Infonet France’s Clients
“A-end” clients and “B-end clients”
Major multinationals
A-end: 5% of total, 40% of revenues
In France, “A-end” examples: Axa, Total, .
Necessarily large multinationals given nature of
service
High expectations: price, but primarily
reliability and quality of support
Leased service: if clients are unhappy, they will
go elsewhere
Best in France - Infonet France
Constraints in France
Primary constraint (but also key
opportunity) is France Telecom’s dominant
position through its ownership of Equant
Best in France - Infonet France
Adaptation to France (1/2)
Small size and corporate autonomy of local
workforce means largely ad hoc systems can
work effectively
Recruitment/Selection and Workforce planning all local
and in the hands of the relevant A-end/B-end head
Compensation set locally in line with local market rates
(other than the country manager)
Annual Performance Appraisal document to be completed
by the A and B-end heads on all staff (although no followup and no consequences for advancement/ salary, which
are local issues)
Job Design, Job Assignment determined, again, by A and
B-end Heads
Best in France - Infonet France
Adaptation to France (2/2)
Communication Policies are exclusively within
ISC’s remit and dealt with out of El Segundo
International Transfers are possible, but there is
no centralized system to actively promote this:
more a question of Infonet affiliates hiring
colleagues from other affiliates
Training is both local and “ISC”: mandatory
continuing intranet-delivered training, but training
also sourced locally
Best in France - Infonet France
Constraint Costs
HR-type costs are such a small part of the cost structure
(witness the revenue to headcount figure), that they
generate little or no ISC interest
Pragmatic attitude to the level of all local costs from local
managers: they are what they are
B-end business (specifically the support element) could
theoretically be offshored, but no ISC pressure to do so
No real costs associated with “integrating” French
managers. They are to an extent appointed on the basis of
their pre-existing Infonet compatibility
Best in France - Infonet France
Key Benefits
Europe generally, and France in particular, very much at the
forefront in technical development due to its highly skilled
labour force, local client demands and the need for
competitive edge to break into markets. Of benefit to Infonet
worldwide: upgrading of the standardized product offer.
Revenue per French employee the same as from all Infonet
Affiliates worldwide: headcount is directly linked to revenue
(one employee per $1m revenue) – neither a benefit nor a
constraint
France an attractive market in terms of the margins it will
support. One of the four major European markets (together
with the UK, Germany and Switzerland)
Targeted Revenue growth in France of 20 to 25% per year
Best in France - Infonet France
We Thank
Manager 1: David Trouillard: Operations
Director, Infonet France SA
[email protected]
Manager 2: Pascal Borios: Sales Director,
Infonet France SA
[email protected]
Best in France - Infonet France
Bibliography
References
Infonet Annual Report 2003
Infonet Corporate Profile
Infonet Factbook 2003
Infonet Facts & Figures at a Glance
Best in France - Infonet France
Our Team
Rob Webb
Patty Ho
Bart Bicke
Jean-Marc Devaux
Best in France - Infonet France