Analysis of Infosys Technologies Limited

Analysis of Infosys Technologies LimitedInfosys Technologies Ltd. was inaugurated in 1981 by seven plenty with US$ 250. Today, it is a global leader in the attached coevals of IT and earning revenues of US$ 6.04 billion.Infosys designs, defines and delivers engineering science-enabled demarcation solutions for Global 2000 companies. Infosys provides a complete localise of function by leveraging its dominion and business expertise and strategic alliances with confidential information technology providers.The objective of this assignment is digest of Infosys Technologies Limited which provides consulting and IT proceedss. Infosys has been the first singleness in this field to containure innovative solutions to its clients. The company offers ample range of softw ar services, namely application cultivation and maintenance, independent validation services, basis services, corporate performance trouble, softwargon packaged application services and product technology and corpses integration.Infosys established the Global Delivery Model (GDM), which emerged as a strike force in the diligence leading to the rise of offshore outsourcing. The GDM is establish on the formula of taking work to the site where the best natural endowment is available, where it makes the best sparing sense, with the least amount of acceptable risk.Infosys has a world-wide st unrivalleds throw with 64 offices and 63 development heart and souls in US, India, China, Australia, Japan, Middle East, UK, Switzerland, Germany, France, Netherlands, Poland, Canada and many different countries. Infosys and its subsidiaries have 130,820 employees working with it as on March 31, 2011. Infosys takes delight in construct strategic pine-term client relationships.EVALUATING THE environmentEXTERNAL ENVIRONMENT PESTLE ANALYSISPESTEL ANALYSISThere be many features in the macro-environment with the intention of the ratiocination of the executive of several(prenominal) organization s.PESTEL ANALYSIS OF INFOSYS TECHNOLOGIES LTD.The PESTEL compend of Infosys Technologies Ltd. is as fol confuseds(P)olitical temporary hookup discussing PESTEL analytic thinking of Infosys Technologies Ltd. first of all I discuss political persuasion of PESTEL analysis of Infosys Technologies Ltd. As vary of the countrywide movement and revolutionize, Infosys Technologies Ltd. is immediately wizard pattern of dense that atomic number 18 triumphant in equally types of business that is familial and worldwide commerce (2003). The positive facial expressions of the political analysis of Infosys Technologies Ltd. ar that Indian political structure is considered stable enough expect the specific that there is a fear of hung parliament. Government owned companies and PSUs have unyielding to give more IT projects to Indian IT companies. The negative perspectives of the political analysis of Infosys Technologies Ltd. are that U.S. government has declared that U.S companies that outsource IT work to other locations other than U.S. will not get tax benefit and terrorist attack or war.(E)conomicWhile discussing PESTEL analysis of Infosys Technologies Ltd. blink of an eye I discuss frugal aspect of PESTEL analysis of Infosys Technologies Ltd. The positive aspects of the economic analysis of Infosys Technologies Ltd. are that Domestic IT Spending(Demand) Domestic grocery to stupefy by 20% and reach approx USD 20 billion in 2008-09 NASSCOM. Decline in real estate prices has resulted reduction the rental usances and callable to recession, the layoffs and job-cuts have resulted in low attrition rate. Along with that economic attractiveness due to equal advantage and other factors is in addition a positive factor. The negative aspect of the political analysis of Infosys Technologies Ltd. is of global IT spending trends.(S)ocialWhile discussing PESTEL analysis of Infosys Technologies Ltd. secondly I discuss economic aspect of PESTEL analysis of Infosys Te chnologies Ltd. The positive aspects of the economic analysis of Infosys Technologies Ltd. are that English is widely spoken language in India, English medium being the most accepted medium of education. Thus, India boasts of massive English speaking population.Regarding educationa number of technical institutes and universities over the country offer IT education are there and working age population is to a fault a constructive societal factor.(T)echnologicalWhile discussing PESTEL analysis of Infosys Technologies Ltd. secondly I discuss economic aspect of PESTEL analysis of Infosys Technologies Ltd. The positive aspects of the economic analysis of Infosys Technologies Ltd. are telephony that is India has the worlds lowest call rates (1-2 US cents). India evaluate to have total subscriber base of approximately 500 zillion by 2010. ARPU for GSM is USD 6.6 per month. India has the second monolithicst telephone network after china. Tele-density 19.86 %. Indian technology also gi ve a chance to opening move telephone services, 3G, Wi-max and VPN are poised to grow. some other positive aspect of Indian technology is the profit Backbone. Due to IT revolution of 90s, Indian cities and India is well connected with undersea ocular cables. Along with that sensitive IT technologies same SOA, Web 2.0, High-definition content, grid computing, and so forthand innovation in low appeal technologies is presenting new challenges and opportunities for Indian IT effort.(L)egalWhile discussing PESTEL analysis of Infosys Technologies Ltd. secondly I discuss economic aspect of PESTEL analysis of Infosys Technologies Ltd. The positive aspects of the economic analysis of Infosys Technologies Ltd. are that IT SEZ requirement ofIT companies can set up SEZ with stripped-down area of 10 hectares and enjoy a host of tax benefits and pecuniary benefits. Contract / Bond requirements Huge debates surrounding the bonds under which the employees are compulsory to work, which is not legally required. IT Act like Indian government is alter the IT act, 2000 to provide a sound legal environment for companies to operate esp. think to security of data in transmission and storage, etc.Companies operating in package Technology Park (STPI) scheme will continue to get tax-benefit till 2010.(E)nvironmentalWhile discussing PESTEL analysis of Infosys Technologies Ltd. secondly I discuss economic aspect of PESTEL analysis of Infosys Technologies Ltd. The energy efficient processes and equipments that companies are centeringing on reducing the carbon footprints, energy utilization, water consumption, etc.PORTERS FIVE FORCES MODEL (INDIAN IT INDUSTRY) flagellum of SubstitutesWhile discussing the Porters analysis of Infosys Technologies Ltd. the very first destine of backchat is threat of substitutes. Regarding threat of substitutes other offshore locationssuch as Eastern atomic number 63, the Philippines and China, are emergent and are posing threat to Indian IT industry because of their cost-advantage. However, this should have an restore only in the medium to long term. Along with that pricequoted for projects is a major differentiator, the feel of products being same.Bargaining power of supplierWhile discussing the Porters analysis of Infosys Technologies Ltd. the second stay of discussion is bargaining power of supplier. Due to slowdown, the job-cuts, the layoffs and unsanded IT outlook and supply of IT professionals is no longer that favorable to employees. Availability of gigantic talent pool that is fresher and experienced is also increase buying power of supplier.Bargaining Power of CustomersWhile discussing the Porters analysis of Infosys Technologies Ltd. the third billet of discussion is power of buyers. Large number of IT companies vying for IT projects resulting in elevated challenger for projects. On the other hand huge decline in IT expenditure Indian IT sector is dependent on regular army and BFSI in particular for majority of its revenues, and with the recent financial crisis, the new spending from these has reduced tremendously. However, for the brisk products and services, the clients continue the old companies.Barriers to Entry pitiableWhile discussing the Porters analysis of Infosys Technologies Ltd., the next point of discussion is a new entrant that isLow capital requirements and prodigious value chain which provide space for small enterprises. Along with that MNCs are ramping up capacity and employee strength.Rivalry among Firms HighWhile discussing the Porters analysis of Infosys Technologies Ltd., the outlive point of discussion is rivalry among firms.Commoditized offerings, low-cost, little-differentiation positioning, high industry growth and operose competitors like few numbers of too large companies.SWOT ANALYSIS OF INFOSYS(S)TRENGTHSleaders in sophisticated solutions that enable clients to optimize the efficiency of their business.Global and 24/7 delivery capability exce llent internet backbone and telecommunications facilities change companies to develop 24/7 delivery capabilities from India itselfCommitment to first-rate quality and process execution Infosys has quality standards such as CMM Level 5i to assure from other competitorsStrong Brand and Long-Standing Client RelationshipsStatus as an employer of plectronAbility to scaleInnovation and leadership.Cost advantage Presence of Infosys in India is key to its victorBreadth of service offering end to end solutions including high end services like IT consultancy and KPO.(W)EAKNESSESExcessive dependence on US for revenues 67 % of revenues from USA.Excessive dependence on BFSI sector for revenues 36 % of revenues from BFSI. Banking sector is facing a crisis globally and is going to spend less(prenominal) on IT.Weak player in domestic grocery store. Only 1 % of revenues from India low as compared to peersLow R D spending as compared to global IT companies only 1.3 % of total revenuesRi sing wage bill 42.9 % to 44.8 % of revenuesLow expertise in high end services like Consultancy and KPO.revenues to be hit hard for InfosysHigh rates of attrition Although slowdown in global economy has lowered attrition rate tho the industry still faces high attrition rates as compared to other sectors. change magnitude competitive advantage rising salary expenses is taking away the cost advantage enjoyed by Indian companies (including Infosys).(O)PPORTUNITIESDomestic market set to grow by 20%. exserting into new geographies Europe, Middle East, etcInfosys is cash rich (Around US $ 1 Billion) Acquiring companies to increase expertise in Consultancy, KPO and package carrying into action capabilitiesOpening offices and development centers in cost advantage countries such as those in Latin America and Eastern Europe.(T)HREATSIntense emulation in the market for technology services could affect cost advantages.High habituation on a small number of clients, and the loss of any on e of the major clients could significantly impact business.Termination of Client contracts can typically be terminated without cause and with little or no banknote or penalty.Global economic slowdown may continue for several years hence low IT spending globally.US Govt. against outsourcing.Shrinking margins due to rising wage inflation.Rupee-dollar movement affects revenue and hence margins.Increased competition from foreign firms like Accenture, IBM etc.Increased competition from low-wage countries like China, Indonesia etc.INFOSYS BCG MATRIXINDIAThe Boston Matrix catalog occasion in charm which is total 4 groups, exposed on corporation of merchandise appendage and Market ShareBCG MATRIX ANALYSIS OF INFOSYS TECHNOLOGIES LTDDogsWhile discussing BCG Matrix for Infosys Technologies Ltd firstly Dogs are discussed. When market share as well as market growth both(prenominal) are low gum olibanum the circumstances is cognise as dogs. If we apply this on Infosys Technologies Ltd none is applied under dogs. bills CowsWhile discussing BCG Matrix for Infosys Technologies Ltd. secondly cash cows are discussed. When market share is high and market growth is low then the situation is known as cash cows. hither, Infosys Technologies Ltd is this situation is applied on maintenance application and development package products.StarsWhile discussing BCG Matrix for Infosys Technologies Ltd. third Stars s are discussed. When market split and market enlargement both are high then the situation is known as stars. Here Infosys Technologies Ltd.BPO is come under stars. indecision MarksWhile discussing BCG Matrix for Infosys Technologies Ltd. fourthly and finally question marks are discussed. When market share is low and market growth is high then the situation is called question marks. Question marks are also known as problem child. Consulting KPO and package information are considered as question marks here.McKinseys 7 S ModelStrategyInfosys has adopted a client-focused dodging to achieve growth. or else than concentrating on numerous small organizations, it concentrates on limited number of large organizations globally. In order to gratify its clients, the company stresses on custom-built software. Another contrasting factor for Infosys is that it commands premium margins. Company does not congeals over margins beyond a certain point and sometime prefers to walk-out rather than compromise and adjust on quality for low-cost contracts. This has helped in establishing an soma for quality drive model rather than cost-differentiating model.Increase business from existing and new clientsExpand geographicallyEnhance solution set Stresses on emerging trends, new technologies, specific industries and pervasive business issues.Develop deep industry fellowshipEnhance brand visibilityPursue alliances and strategic acquisitionsLeadership ardourInfosys believes that leadership is one of the most primary and essential ingredients of organizational success which is provided by its Chairman, N R Narayanmurthy. Leadership is based on high business vision and prevailing supportive styles. There is attention on developing leadership qualities among employees. For this purpose, it has constituted Infosys Leadership Institute. Top management lays stress on extend door policy, continuous sharing of information, takes inputs from employees in decision making, and builds personal empathy with employees.Staff (Human Resources)Since Infosys is in knowledge-based industry, it focuses on the quality of the gentle resources. Out of total employees of the organization, about 90 per cent are engineers. At the entry level, it lays stress on selecting candidates who find the companys meritocratic culture satisfying, superior academic records, technical skills, and high level of learn ability. The company also stresses on training and development of its employees on constant basis and spends about 2.65 per cent of its profits on up gradation of emplo yees skills, and around 50% as employee costs.Shared ValuesValues are essential part of Infosyss organizational culture. In fact its tagline characterizes how much emphasis it lays on primary values.The basic values areCustomer Satisfaction A loading exceeding customer expectations.Leadership by Example A loyalty to set principles in business and transactions and be an exemplar for the industry and teams.Integrity and Clarity A commitment to be worthy, sincere and open in our dealings.Fairness A commitment to be impersonal and transaction-oriented, thereby earning trust and respect.Quest of Excellence A commitment to strive continuously, to on a regular basis improve ourselves, our teams, our services and products so as to become the best.Organizational social organizationThe company has adopted a free form organization costless of hierarchies. Everyone is known as assistant irrespective of his position in the company. packet development is underinterpreted through teams and t he content of teams is based on the principle of flexibility. A member, who might have been team leader in one project, may be substituted with another member of the same team for another project. This system not only helps in developing the feeling of equality save also helps in developing project leaders.SkillsFrom last year, Infosys has made it authorisation for every employee to clear a predefined certifications, domain as well as technical, in order to be eligible for appraisal. This is just one of the initiatives taken by Infosys which signifies the efforts taken for building competencies. Apart from internal initiatives like knowledge management, Infosys has been CMM-Level 5 certified for its process capabilities. Infosys has entered the Balanced Scorecard Hall of Fame for punish Strategy for achieving breakthrough performance results using the Balanced Scorecard (BSC). gm STRATEGIESAnsoffs MatrixCurrent Market forward-looking MarketCurrent produceMarket Penetration Strat egyMarket Development StrategyNew ProductProduct Development StrategyDiversification Strategy market place PENETRATION STRATEGYCurrent Markets While discussing market acumen dodging the first point of discussion is current markets. For Infosys Technologies Ltd current markets are USA and Europe.Products While discussing market penetration scheme the second point of discussion is products. For Infosys Technologies Ltd products are ADM, BPO, KPO, consultancy services (in BFSI, manufacturing and retail) and software products (financial products).Recommendation While discussing market penetration strategy the third point of discussion is recommendation. For Infosys Technologies Ltd as most large clients in US and Europe are cutting costs, Infosys needs to be more aggressive on cost and quality front. terminus of strategy While discussing market penetration strategy the last point of discussion is result of strategy. For Infosys Technologies Ltdthe result of strategy is unlikely to yi eld wide results. trade DEVELOPMENT STRATEGYNew Market While discussing market development strategy the first point of discussion is new markets. For Infosys Technologies Ltd new markets are India, Middle-east and Australia.Current Product While discussing market development strategy the second point of discussion is current product. For Infosys Technologies Ltd current products are ADM, BPO, KPO, consultancy services (in BFSI, manufacturing and retail) and software products (financial products).Recommendation While discussing market development strategy the third point of discussion is recommendation. For Infosys Technologies Ltd current markets since these are fast developing IT market, Infosys needs a paradigm shift in focus from US and EU markets to these markets.Result of strategy While discussing market development strategy the fourth point of discussion is result of strategy. For Infosys Technologies Ltd current markets are likely to yield good result.PRODUCT DEVELOPMENT STR ATEGYCurrent Market USA and EuropeNew Product Consultancy and package implementation services in relatively growing sectors esp. healthcare, life sciences and aviation sector, and KPO services.Recommendation Concentrate on building expertise in these domains by strategic acquisitions.Result of Strategy plausibly to have good result. (Better the company acquired, the better the result).DIVERSIFICATIONNew Market India, Middle-east and AustraliaNew product Consultancy and package implementation services in relatively growing sectors esp. healthcare, life sciences and aviation sector, and KPO services.Recommendation Changing Brand image from low value service provider to high value service provider.Result of Strategy Difficult to achieve overnight (possible in long term).OTHER STRATEGIESCONCENTRATION 90% of Infosys revenues from American and European nations.VERTICAL integration Infosys recently made a bid to acquire a European major Axon consultancy to improve its business in Europ ean markets, but finally called off the deal due to high valuation. Otherwise, Infosys has always believed in organic growth.INNOVATION The Software Engineering and Technology Labs (SETLabs) at Infosys is the center for applied technology research in software engineering and enterprise technology. SET Labs conducted 24 Innovation Workshops with customers from the US and Australia, to identify research coaction possibilities. Infosys promotes a favorable work environment that encourages innovation and meritocracy.At the conclusion of this assignment I would like discuss the main points. Global sourcing strategy is aligned with business strategy. Enhancing operational efficiency and delivering value added services. Structuring processes and services into modules thus leading to enhanced flexibility and productivity. Aggressive focus on ERP solutions like Oracle and SAP.. this conclusion is based on the rigorous analysis and one can learn for the conclusion to expand into high end con sulting. integrating and Strategic acquisitions are essential for future growth of revenues.Shift in focus from low cost advantage to high quality services. Quick bridal to high growth markets is necessary.