JAGANNATH UNIVERSITY

Report on
Infosys Consulting in 2006: Leading the Next Generation of
Business and Information Technology Consulting
Course Code- 420

Submitted To Submitted By

Ayesha Akhter Irtefa Jahan

Assistant Professor B150203003

Dept. of Finance Humayara Akter Samia

B150203039

Date of Submission- 02.10.19

In January 2006, the five managing partners of Infosys Consulting (ICI) congregated at the St. Regis
resort in Orange Country, California for their first team meeting of the year.

All of are proud of how much the company had achieved since its inception in April 2004 as a wholly
owned U.S. subsidiary of Infosys Technologies. The firm had more than 100 consulting engagements and
had grown from its inception in April 2004 to over 200 employees in January 2006, achieving its two
year recruiting target.

Flashback to April 2004 (The Inception of Infosys Consulting)

The evolution of global information Technology service companies in India began in the 1990s with the
procurement of application development and maintenance services by American companies.

From 1993 through n1999, as U.S. firms gained confidence in working with Indian companies and
wanted to leverage the benefits of offshoring services by taking advantage of high quality services at
lower price point.

Indian companies like Infosys Technologies started expanding their footprint by adding service lines.
One of Infosys Technologies main objectives was to increase revenue through repeat business with the
company’s client base.

To that end, Infosys Technologies offered clients new opportunities to work with the company. Infosys
Technologies expanded its service offering to include package implementation, R&D infrastructure
management, system integration etc.

As the company’s menu of services expanded, its client relationships became more complex. Infosys
Technologies started working with the business side of client organizations as well as the IT side in order
to manage these complex organizations.

Infosys technologies saw the opportunity to enter a client relationship earlier in the lifecycle to define
problems, identify solutions and then implement a solution as a natural evolution of their service
offering.
However the company’s success in consulting was constrained due to its limited brand equity, investment
allocation and recruiting abilities.

By 2004, Infosys Technologies was a billion dollar company with an employee base of 25000 and had established
stronger brand equity.

Infosys technologies wanted to establish a new model in the consulting space, the firm decided against
an acquisition. The company also realized from past experience that organically growing the business
would limit its ability to attract the right kind of talent for consulting. Infosys Technologies decided to
create a hybrid model by setting up a U.S. based wholly owned subsidiary.
2006: Overview of the information technology (IT) Services Industry
The market for IT services was large and growing. Forrester research Inc. a technology research firm,
projected IT consulting growing 5 percent compounded annually over the next five years. Apart from the
two largest players- IBM and Accenture-who still had a relatively small share of the industry, the market
for business and IT consulting was fragmented.

As the concept of global delivery achieved success, firms looked to third-party vendors to provide end to
end services from business consulting to applications development and implementation, infrastructure
management and BPO, using this model. Two different approaches to leveraging global delivery
emerged in the marketplace: onshore U.S. based firms such as IBM and Accenture leveraged offshore
centers for development and implementation aspects of the value chain while offshore firms in India
including Tata Consultancy Services (TCS) and Wipro Technologies (WIPRO) - in addition to Infosys
Technologies- started offering higher end consulting services.

As more global IT services companies built up a presence in India, prices and wages increased. At the
end of 2004, Infosys Technologies and WIPRO raised the wages of their midlevel workers between 15%
& 20% to combat the threat of attrition. Indian firms also introduced stock- based compensation to
boost productivity in the face of increased competition.

Onshore leading players

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Offshore leading players

Indian IT service providers offered two distinct types of consulting services: technical consulting &
business consulting.

Tata Consultancy Services (TCS) was the largest offshore IT service provider in India. TCS had global
service delivery locations in Hungary, Brazil, Uruguay and China. It offered consulting services, IT
services, asset-based solution etc. It went public in 2004.

Wipro Technologies (Wipro) Wipro, the third largest Indian application service provider, had a range of
IT services, software solutions, IT consulting etc. in the areas of hardware and software design. Wipro
had a strong market presence in the US and significant European representation.

ICI Strategy & Organization

The leadership team at ICI had a mission to lead a new generation of business consulting to help clients
become more competitive and help develop their employees into great leaders.
Global Delivery Model
Infosys Technologies developed a unique approach to global delivery more than 20 years ago and was
considered a leader in the delivery of IT implementation project using globally distributed teams.

Client Location Offshore Development

centers
Discovery Project Project

 Analysis and planning  Project Management

 High level design  Detailed design
 Project coordination  Coding
 Onsite testing  Testing
 Implementation  Documentation

Post Implementations Support Post Implementations Support

 Rapid Reaction  Bug fixes

 Support  Warranty support
 Maintenance
SWOT Analysis

•Operational excellence to •Over-reliance on US

deliver GDM economy
•Capability to attract & keep •Limited position in value
talents chain
•Strong relationship with
large Corporations.

Strength Weakness

Opportunities Threats

•More cost or speed • Wage inflation due to

concious customers competition on talents
•Market growth •Newer disruptive
•Higher awareness on business models.
offshore model