Transcript US Analyst Meet 2005

Strategic Global Sourcing
S. D. Shibulal
Director and Head – Worldwide Customer
Sales & Delivery
© Infosys Technologies Limited 2005 - 06
Safe Harbor
Certain statements in this Analyst Meet concerning our future growth prospects are forward-looking
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, 2005 and our
reports on Form 6-K. These filings are available at www.sec.gov. Infosys may, from time to time, make
additional written and oral forward-looking 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.
November 11, 2005
© Infosys Technologies Limited 2005 - 06
Outline
Outsourcing trends
SGS Business Unit
Infosys point-of-view: Modular Global Sourcing (MGS)
The results
November 11, 2005
© Infosys Technologies Limited 2005 - 06
Services Outsourcing and Offshoring are no longer distinct categories:
moving towards Strategic Global Sourcing (SGS)
Traditional Outsourcing
(‘Your mess for less’)
Strategic Global
Sourcing
(‘Lift and Shift’)
Project-based Offshoring
(‘Brick-by-brick’)
November 11, 2005
© Infosys Technologies Limited 2005 - 06
Key trends shaping the IT Services Outsourcing
industry
Greater adoption of offshoring and global delivery in all large outsourcing
deals
More deals but at lower Total Contract Value (TCV) and with shorter
terms (3-6 yrs)
Infrastructure-led or bundled deals are giving way to more best-of-breed
Applications or Business Process-led ones (e.g. ABN AMRO)
Waves of contract expirations in 2006/07 with competitive bidding and
smaller deal sizes a reality for most of the new ones
November 11, 2005
© Infosys Technologies Limited 2005 - 06
SGS is positioning Infosys to be the market leader in global
sourcing of IT services
SGS is the category owner for IT Outsourcing within Infosys and has
experience in and capabilities covering all the key aspects of outsourcing
Marketing/Positioning
Sourcing Solutions
Deal Consultant relationships
Large deal pursuits and structuring
Transition Management
Client Partnership
HR Solutions
Organizational Change Management
SGS generates innovative solutions and points-of-view/white papers
(e.g. MGS) to establish though-leadership and create differentiation
November 11, 2005
© Infosys Technologies Limited 2005 - 06
Key features of an SGS deal
Ownership
Portfolio ownership
Global Service Delivery
Multi-location global delivery with high offshore component
Broad range of services
Commitment
Long-term SLA-based contracts
Built-in productivity improvements on a fixed-price model
Complexity
Multi-vendor governance
Possible People and Asset transfers
Multiple HR options: retain, redeploy, reassign, rebadge or retrench
November 11, 2005
© Infosys Technologies Limited 2005 - 06
Modular Global Sourcing point of view to accelerate
sourcing benefits for clients
Design Build Operate
HR
SCM
CRM
Optimize for
Speed
Optimize for Efficiency
and Predictability
November 11, 2005
Business
Process
Business
Applications
H/W & S/W
Infrastructure
Multiple, best-of-breed
sourcing options,
providing greater
flexibility, while aligning
with different business
imperatives
IT and Business Process Assets
Execution processes
© Infosys Technologies Limited 2005 - 06
The results so far
Some of the large deals won in the last year and half
ABN Amro – financial services conglomerate
PSEG – one of the largest utilities in the US
Leading product compliance and testing organization
Leading digital info-imaging company
SGS Solutions being seen as ‘differentiated’ by clients
Establishing thought-leadership with industry analysts, media, deal
consultants and other influencers using the MGS point-of-view
November 11, 2005
© Infosys Technologies Limited 2005 - 06
ABN Amro win - details
Deal size:
Application Maintenance: $ 140 m
Application Development: Competitive bidding between 5 Vendors
Potential for business: $ 250 m
Includes committed volumes in North America and new growth markets including Europe and APAC
Deal Time lines
Timeline
Milestone
Timeline
Milestone
July 2004
RFP issued
Nov 2004
Proposal walkthrough
Dec 2004
Due-Diligence completed
Mar 2005
Commencement of negotiations
Sept 2005
Deal awarded
Oct 2005
Commencement of Transition
Competitive landscape
At RFP stage : Prominent Global and Offshore vendors
At negotiation : Only Infosys and TCS for Application Maintenance, Also Patni, IBM and Accenture
for Application Development
No people or asset takeover
At company compatible margins over the deal tenure
Largest ever deal sole-awarded to offshore players
November 11, 2005
© Infosys Technologies Limited 2005 - 06
Thank You
www.infosys.com
© Infosys Technologies Limited 2005 - 06