Infosys' Global Delivery Model
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Case Details:
Case Code : OPER059
Case Length : 14 Pages
Period : 1995-2006
Organization : Infosys Technologies
Pub Date : 2006
Teaching Note : Available
Countries : India/Global
Industry : Software
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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.
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Excerpts Contd...
The Benefits
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According to analysts, GDM was cited as one of the key factors behind the rapid
growth of Infosys' revenues. In a span of 25 years, the company grew to generate
revenues of US$ 2 billion in 2005-06. Infosys' revenues grew almost four-fold in
the past four years (Refer Exhibit VII for five year revenues of Infosys). The
company continued attracting a talented workforce in India and other countries.
The number of employees of Infosys grew to 52,700 as of March 2006 against
10,700 in 2002. In the fiscal year 2005-06, Infosys derived more than 40% of its
revenues through new GDM based services like package implementation, independent
validation, business process management, infrastructure management and systems
integration...
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The Road Ahead
Realizing the potential of GDM, several other Indian IT companies also began
providing offshore services. Indian companies could charge a premium of
10-20% for their offshore services. But with these services becoming
mainstream, there was competition among major players and customers became
less willing to pay a premium. It was not long before multinationals also
entered the fray. Several MNCs like Accenture , IBM Global Services ,
Electronic Data Systems , have started operating from India and began
offering the same offshore rates as Indian companies.
But Infosys remained confident that consultants and companies abroad could
not match their GDM capabilities. They would need to build the model from
scratch, by retrenching the manpower in their countries and hire equally
talented employees in other locations with cost advantages. The
multinationals would need to redesign their operations in order to replicate
Infosys' GDM, which would be a very difficult task...
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Exhibits
Exhibit I: Magic Quadrant - Criteria
Exhibit II: Traits of Companies in 'Leaders' Quadrant
Exhibit III: Infosys - Milestones
Exhibit IV: Project Components - Onsite, Near-Site, Offshore
Exhibit V: Advantages of Global Delivery Model
Exhibit VI: Infosys - GDCs Located Outside India
Exhibit VII: Infosys - Five Year Financial Highlights (US GAAP) |
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