SM IT Industryanalysis_report_Rungthip and Akhil

8/2/2019 SM IT Industryanalysis_report_Rungthip and Akhil

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Analysis of IT Industry in India

&

External and Internal Analysis of:

@ TCS

@ Infosys

@ Wipro

Submitted by:

Rungthip Kulsangcharoen

Akhil Agarwal


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Table of contents

Information Technology Industry in India

Introduction 2 Classification of IT industry 3 Top ten IT companies in India 4 PESTEL analysis 6 Porters Five Forces Model 7 SWOT Analysis of IT industry in India 9

Tata Consultancy Services Limited (TCS)

Introduction 14 Vision & Mission 14 Values 15 SWOT analysis 15 Key success factor 16 Strategy 16 Recommendation 17

Infosys Technologies Ltd.

Introduction 18 Vision & Mission 18 Revenue break-up 19 Leadership style 19 Values 20 SWOT analysis 21 Key success factor 23 Strategy 24 Suggested future strategies 27

Wipro Technologies

Introduction 28 Major divisions 29 Vision & Mission 30 SWOT analysis 30 Key success factors 32 Recommendation 33


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Information Technology Industry in India

Introduction

In an increasingly globalised world, significant complexity and uncertainty is

getting attached to the unprecedented economic crisis. The Indian economy has

also been impacted by the recessionary trends, with a slowdown in GDP growth

to seven per cent. The focus and exponential growth in the domestic market has

partially offset this fall and insulated the country, resulting in net overall

momentum. The IT-BPO industry in India has today become a growth engine forthe economy, contributing substantially to increases in the GDP, urban

employment and exports, to achieve the vision of a young and resilient India.

During the year, the sector maintained its double digit growth rate and was a net

hirer. This growth has been fuelled by increasing diversification in the geographic

base and industry verticals, and adaptation in the service offerings portfolio.

While the effects of the economic crisis are expected to linger in the near term

future, the Indian IT-BPO industry has displayed resilience and tenacity in

countering the unpredictable conditions and reiterating the viability of Indias

fundamental value proposition. Consequently, India has retained its leadershipposition in the global sourcing market.

The Indian IT-BPO industry is estimated to achieve revenues of USD 71.7 billion in

FY2009, with the IT software and services industry accounting for USD 60 billion

of revenues. During this period, direct employment is expected to reach nearly

2.23 million, an addition of 226,000 employees, while indirect job creation is

estimated to touch 8 million. As a proportion of national GDP, the sector

revenues have grown from 1.2 per cent in FY1998 to an estimated 5.8 per cent in

FY2009. Software and services exports (including BPO) are expected to account

for over 99 per cent of total exports, employing over 1.76 million employees.

While the current mood is that of cautious optimism, the industry is expected

to witness sustainable growth over a two-year horizon, going past its USD 60

billion export target in FY2011. While the industry has significant headroom for

growth, competition is increasing, with a number of countries creating enabling

business environments aimed at replicating Indias success in the IT-BPO industry.

Hence, concentrated efforts are required by all stakeholders to address the


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current challenges, to ensure that India realizes its potential, and maintains its

leadership position.

Information Technology industry in India can be broadly classifiedinto:

1. IT- Software These companies help in developing and implementation of

different software for their clients worldwide. These softwares could be for

documentation, security services, banking softwares etc.

2. ITES Business process outsourcing (BPO) Major Corporations across the

world outsource their back-office operations to some companies. E.g. Employee

payroll for a US companys global workforce is maintained by an Indian BPO.Slowly the definition is expanding to Human resources, accounting, logistics, legal

processes etc.

3. IT- Hardware and peripherals - The stuff you can actually see and touch, and

would likely break if you threw it out a fifth-story window, is hardware. This

would include laptops, desktops, Storage devices, Networking devices, LCD,

printers etc.

4. IT- Education This segment provides training for employment in the othersegments. This would include companies providing various certification

courses, like Java, Oracle etc. These companies also provide training for

employees in corporate sector. Recently, some companies have also expanded

this service to cater to schools and colleges.

This sector has made significant contributions to Indias economic growth in

terms of GDP increase, foreign exchange earnings as well as employment

generation. Its contribution to GDP has increased tenfold in last decade, from

0.6% to 6% till 2009-10. The sector has helped India transform from a rural andagriculture-based economy to a knowledge-based economy. Besides this, the lives

of people have been positively influenced by direct or indirect contribution of IT

sector to various parameters such as employment, standard of living, per-capita

income etc.


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Top ten companies in IT industry India. (NASSCOM 2010)

Rank Name of company

1 Tata Consultancy Services Ltd.

2 Infosys Technologies Ltd.

3 Wipro Technologies Ltd.

4 Satyam Computer Services Ltd.

5 HCL Technologies Ltd.

6 Patni Computer Services Ltd.

7 I-flex Solutions Ltd.

8 Tech Mahindra Ltd. (formerly Mahindra-British Telecom Ltd.)

9 Perot Systems TSI Ltd.

10 L&T InfoTech Ltd.


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Figure1: Indian IT industry breakdown by companies


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PESTEL Analysis

1. Political Political stability:Indian political structure is considered stable enough

except the fact that there is a fear of hung parliament (no clear

majority).

U.S. government has declared that U.S companies that outsource IT workto other locations other than U.S. will not get tax benefit.

Government owned companies and PSUs have decided to give more ITprojects to Indian IT companies.

Terrorist attack or war.2. Economics

Global IT spending (Demand) is declined

Domestic IT Spending (Demand): Domestic market to grow by 20% andreach approximately USD 20 billion in 2008-09 estimated by NASSCOM

Currency Fluctuation Real Estate Prices: Decline in real estate prices has resulted reducing the

rental expenditures.

Attrition: Due to recession, the layoffs and job-cuts have resulted in lowattrition rate.

Economic attractiveness due to cost advantage and other factors.3. Social

Language spoken: English is widely spoken language in India, Englishmedium being the most accepted medium of education. Thus, India boasts

of large English speaking population.

Education: A number of technical institutes and universities over thecountry offer IT education.

Working age population4. Technological

Telephony:o India has the worlds lowest call rates (1-2 US cents).o Expected to have total subscriber base of about 500 million by 2010.o ARPU for GSM is USD 6.6 per month.o India has the second largest telephone network after China.o Teledensity 19.86 %o Enterprise telephone services, 3G, Wi-max and VPN are poised to

grow.


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Internet Backbone: Due to IT revolution of 90s, Indian cities and India arewell connected with undersea optical cables.

New IT technologies: Technologies like SOA, Web 2.0, High-definitioncontent, grid computing, etc. And innovation in low cost technologies is

presenting new challenges and opportunities for Indian IT industry.

5. Environment Energy Efficient processes and equipment: Companies are focusing on

reducing the carbon footprints, energy utilization, water consumption, etc.

6. Legal IT SEZ requirements: IT companies can set up SEZ with minimum area of 10

hectares and enjoy a host of tax benefits and fiscal benefits.

Contract / Bond requirements: Huge debates surrounding the bonds underwhich the employees are required to work, which is not legally required.

IT Act: Indian government is strengthening the IT act, 2000 to provide asound legal environment for companies to operate esp. related to security

of data in transmission and storage, etc.

Companies operating in Software Technology Park (STPI) scheme willcontinue to get tax-benefit till 2010.

Porters Five Forces Model

Rivalry among firms: High

1. Commoditized offerings2. Low-cost, little-differentiation positioning.3. High industry growth4. Strong competitors few numbers of large companies

Bargaining power of suppliers: Low

1. Slowdown, the job-cuts, the layoffs and bleak IT outlook.2. Demand and supply of IT professionals is no longer that favorable to

employees.

3. Availability of vast talent pool newly graduate and experienced.


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Bargaining power of buyers: High

1. Large number of IT companies competing for IT projects resulting inhigh competition for projects.

2. Huge decline in IT expenditure: Indian IT sector is dependent on USAand BFSI in particular for majority of its revenues, and with the recentfinancial crisis, the new spending from these has reduced tremendously.

3. However, for the existing products and services, the clients continue theold companies.

Threat of substitutes: Moderate1. Other offshore locations such as Eastern Europe, the Philippines and

China, are emerging and are posing threat to Indian IT industry because

of their cost-advantage. However, this should have an impact only in the

medium to long term.

2. Price quoted for projects is a major differentiator, the quality ofproducts being same.

Threats of new Entrants: Low

1. Low capital requirements.2. Large value chain, space for small enterprises.3. MNCs are ramping up capacity and employee strength.

IT sector: Moving up Value Chain

From the back-end services location to the global innovation hub. India, earlier the primary global off shoring destination for low-end back-

office services, is now emerging as an innovation and research hub.

India is estimated to continue attracting substantial investment in thesector, with the cost-arbitrage factor expected to prevail for another 10 to

15 years.

The ITES segment is expected to leverage the penetration of the ITsegment; complementing and completing end-to-end customer

requirements with the aid of offshore and onshore service offerings.


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SWOT Analysis of IT industry in India

Strengths

High Quality & Price Performance: Quality is the hallmark of Indian I.T.software and, services. ISO 9000 certification and SEI Level 5 are the orderof the day. High quality knowledge workers and attractive price

performance have been and will continue to be a key component of India's

value proposition.

Large Pool of Knowledge Workers: The basic raw material for any softwaredevelopment activity or a dotcom start up is the availability of quality

knowledge workers. India's main competitive advantage is its abundant,

high-quality and cost effective human resources.

Currently, India trains more than 73,000 professionals a year and hasaround 80,000 people working in the software and services sector. This is

the second largest I.T. work force in the world. Recently, the Government

of India has committed to providing computer education in every school by

year 2003.

State-of-the-art Technologies: A majority of Indian software companies usestate-of-the-art technologies, including the latest in client-networking, E-

commerce, Internet, ASP, CASE tools, communication software, ATM,

protocols, GUI etc.

Flexibility and Adaptability: Indian software professionals easily adaptthemselves to new technologies. In the software industry, where

technological obsolescence is the order of the day, flexibility to adapt to

new technologies a major strength

Reliability: Software programmers from India are able to provide expertisefor all or large projects with dollar savings. The motto is ultimate adherence

delivery schedules and customer satisfaction

Off-shore Development through Datacom links: Off-shore softwaredevelopment in India especially through high-speed datacom (satellite

links), provides immense cost and time saving.

Large Projects: Indian companies increasingly large numbers aredemonstrating their ability to handle large projects (more than 500-700

man- ears), including turnkey projects.

High Growth: Software exports as well as the domestic demand in the lastfew years have been consistently growing at annual growth rate of about

50 percent.


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Engineering Base: A strong base of national institutes, engineering collegeand universities has laid a strong foundation of education in engineering

skills amongst Indian software professionals. The IITs (Indian Institute of

Information Technology) in various cities are the new institutions to join

the bandwagon.

Mathematical and Logic Expertise: Indias success in providing efficientsoftware solutions can be also attributed to the mathematical and logical

ability Indians.

HighAspirations: The Indian IT software and services industry has set itselfhigher aspirations and goals. The recent aspiration is to reach annual

revenues of U.S.$ 87 billion by 2008 (from a level of U.S.$3.9 billion during

1998 99), achieve 100 percent literacy, more, employment and

entrepreneurship opportunities.

Indians in Silicon Valley: As per a recent survey, 23 of the Fortune 500company CEOs are of Indian origin. It has been reported that a business

plan of a dotcom company in Silicon valley, U.S.A. receives higher priority if

an Indian name associated with it. The successful India in Silicon Valley has

organise themselves under the Indus Entrepreneurs Group (TiE).

Government Encouragement: Since 1999 the Government of India hasaccorded thrust area status to the software sector. The Government has

amended the Copyright Law to make it one of the toughest in the world;

eliminated import duty on computer software; exempted profits derived

from software exports from Income Tax etc. The Government of India hasalso set up innovative scheme like Software Technology Parks, etc., for

promoting software exports.

Infrastructure: A growing number of State Governments and cities arebuilding hi-tech buildings and habitats to accommodate the ever increasing

numbers of software companies and enterprises. These are in the form of

intelligent habitats and buildings and include infrastructural support like

high- class value-added data communication services, captive power,

recreational facilities, etc. They incorporate state-of- art facilities viz. plug-

and-play features. This is assisting companies to quickly set up theirsoftware operations in India.

Global Research & Development: More and more multinationals aresetting up their global R&D units in India, recognising the immense power

of local talent.


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Opportunities

Global Market: The market is large and rapidly changing-from a mix oflegacy client server to web / package-based services. Market openings are

emerging across I.T. services, software products, I.T. enabled services and

E-businesses, and creating a number of new opportunities for Indiancompanies.

Domestic Demand: The corporate, government and consumer sector of theIndian domestic market offers a U.S. $ 18 billion opportunity by 2008 to

software and services companies.

Outsourcing: The global outsourcing business was worth U.S.$ 77 billion in1997 and has been growing at the rate of 15-18 percent per annum. A

recent survey indicates that by 2002, more than 59 percent of the Fortune

1000 companies and other multinationals will outsource some part of their

application development and maintenance activities. India can gain andcorner a greater marketplace.

E-Commerce/E-Business: India not only has a huge opportunity to servicethis market but also has a unique opportunity to address the needs of the

NRI community around the world.

Overseas Listings: India today commands a very high respect amonginvestors in India and overseas. Almost all major overseas stock exchanges -

are keen for Indian software companies to list themselves on their

respective exchanges. This is a major opportunity for the Indian software

industry to attract the requisite investments.

Internet Service Provider (ISP) Policy: The recent permission to allowprivate ISP's operate in India and set up their own gateways will

unprecedented Internet proliferation throughout India.

Threats

Government Interference: In the past decade, the Government andindustry have worked very well together in India for the success of the I.T.

software and services industry. Now the Government's role needs to be

increasingly directed towards providing suitable infrastructure and

continuing its role in the simplification of policies. Any further plans for

Government control, restrictions or undue interference could well pose a

threat to the industry.

Telecom Infrastructure: The immediate need of the hour in India is to havea world class telecom infrastructure at globally competitive tariffs. The


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Department of Telecommunications has taken a number of initiatives

including the National Telecommunication Backbone, National Internet

Backbone, and plans for providing high bandwidth Internet connectivity to

remote corners of India. However, Government monopoly, lack of speed

and adherence to archaic telecommunication rules and regulations can

prove to be a threat to the industry.

Lack of Speed: The world is moving at the speed of Internet. The decision-making and time taken for implementation in India needs to be at a much

faster pace so that the Indian I.T. software and services industry does not

lose any opportunities.

Infrastructure: Although, the software industry is growing at a phenomenalrate, many other sectors in India have not yet been able to keep pace with

it. Lately, almost all major cities are building hi-tech buildings to house the

software industry. These buildings have state-of-art infrastructure, data

communication facilities, captive power etc. But, lack of power, highways,

housing and international airports is some cities has become a major

constraint.

Cost: Rising cost of infrastructure, basic amenities and salaries can pose athreat if not adequately balanced with value addition.

Protectionism by Export Destinations: Many countries in North Americaand Western Europe are creating protective and non-tariff trade barriers,

especially with regard to the movement of skilled manpower. Visa issues

and non-tariff trade barrier may prove to be a threat. India should insist for

removal of non-trade tariff barriers at WTO.


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Tata Consultancy Services Limited (TCS)

Introduction:Tata Consultancy Services Limited (TCS) is a leading and Indias largest provider of

IT Services, Business Solutions and Outsourcing with revenues of 6 Billion Dollarsduring FY08-09. TCS envisioned and pioneered the adoption of the flexible global

business practices that today enable companies to operate more efficiently and

produce more value. More than 95 percent of TCS customers reward the

companys reliability, passion, creativity, and unique ability to handle the

broadest range of theirs IT needs. TCS has 143,000+ worlds best trained IT

consultants located in 50 countries.

TCS achieved this by creating and perfecting a unique method of global

deployment and delivery of high quality, high value services known as GlobalNetwork Delivery Model (GNDM), the strategic services delivery concept that

has reshaped the IT services industry. GNDM is a unique network of 79 Delivery

Centres in 16 countries. These delivery centres operate at the same quality (TCS is

the only company in the world to be assessed at CMMi Level 5 through a single

assessment across all its delivery centres), security and skill levels, giving

customers same experience of certainty across the organization globally.

History:It began as the "Tata Computer Centre", for the company Tata Group whose main

business was to provide computer services to other group companies. F C Kohli

was the first general manager. J. R. D. Tata was the first chairman, followed by

Pankaj Roy.

One of TCS' first assignments was to provide punched card services to a sister

concern, Tata Steel (then TISCO). It later bagged the country's first software

project, the Inter-Branch Reconciliation System (IBRS) for the Central Bank of

India. It also provided bureau services to Unit Trust of India, thus becoming one ofthe first companies to offer BPO services.

Company mission: reflects the Tata Group's longstanding commitment toproviding excellence:


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To help customers achieve their business objectives by providinginnovative, best-in-class consulting, IT solutions and services.

To make it a joy for all stakeholders to work with us.

Company values:

Leading change Integrity Respect for the individual Excellence, Learning and sharing.

TCS SWOT analysis

Strengths

Innovation labs Employee management skills Extensive global research Strong financial performance

Weaknesses

Significant exposure to financial services Lack of scale in consulting operations

Opportunities

Focus on SMB segment Expanding operations in countries like China Growth in worldwide IT services Focus ion high end business and IT consulting

Threats

Increasing employee costs Intense competition from foreign firms like Accenture, IBM, etc. Increased competition from low-wage countries like China, Indonesia, etc. Consolidation in the end markets


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Rupee appreciation

Key Success Factor

KSF of TCS:

Customer-Centric Engagement Model: they build teams around customerdomain and technology requirements, offering specialized services and

solutions that meet the distinct needs.

Global Network Delivery Model: The model allow customer to choose thesourcing strategy.

Full services Portfolio Innovation Labs and Co-Innovation Network First mover advantage Integrated full-services player Collaboration with multiple stakeholders High Quality and Maximum security

TCS strategy

Generic Business Strategy:

1. Low cost Global delivery 24X7 model.2. Focus on customer relationship management, customer retention (for

repeat business revenue which is 95.6%).

3. Timely delivery with the help of proven delivery & quality framework iQMS.

4. Differentiation in low-end services in terms of cost, resources.5.

Differentiation in high-end services such as consulting in term of nicheofferings, expertise.

6. Protection from currency fluctuations with the help of currency hedging.7. Due to its strong knowledge management system and resource strength,

TCS has been successful in getting the cost leadership in the industry.

8. Since last decade, TCS has been following a more focused strategy wherethey are going as per local needs of customer and their nature of business.

E.g. Middle East, Australia. They are being more focused region wise and

customer wise rather than being generic.


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9. Focus on the Centers of Excellence (CoE) to strengthen capability so as tobuild state-of-the-art solutions in specific technologies such as service-

oriented architecture, testing, and virtualization. These high-end skills and

scale will help TCS to tackle larger projects aimed at transforming clients IT

applications and infrastructures.

Recommendation:

TCS should reduce its exposure to particular industry sector and shoulddiversify its service portfolio.

It should invest in offshore market in order to ensure continue flow of newprojects and alliances with global clients.

It should invest more in human resource planning and focus on employeesatisfaction to reduce attrition.

TCS should employ robust risk management strategy to manage differenttypes of risk especially currency exchange risk.


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Infosys Technologies Ltd.

Introduction

Infosys Limited formally Infosys Technologies is a global technology services

company headquartered in Bangalore, India. Infosys have offices in 29 countries

and development centres in India, US, China, Australia, UK, Canada, Japan and

many other countries. Infosys has over 145,088 employees of 85 nationalities.

Infosys provides business consulting, technology, engineering and outsourcing

services to help clients in over 30 countries.

History

Infosys has revenues of US$ 6.825 billion (LTM Q3-FY12). Infosys ranked among

the most innovative companies in a Forbes survey, leading technology companies

in a report by The Boston Consulting Group and top ten green companies in

Newsweek's Green Rankings. Infosys was voted India's most admired company in

The Wall Street Journal Asia 200 every year since 2000. The corporate governance

practices were recognized by The Asset Platinum award and the IR Global

Rankings.

Infosys was rated best employer to work for in 2000, 2001, and 2002 by HewittAssociates. In 2007, Infosys received over 1.3 million applications and hired fewer

than 3% of applicants.

Infosys won the Global MAKE (Most Admired Knowledge Enterprises) award for

the years 2003, 2004 and 2005, and is inducted into the Global Hall of Fame

Infosys was also ranked as the 15th most trusted brand in India by The Brand

Trust Report in 2011.

Vision

"To be a globally respected corporation that provides best-of-breed business

solutions, leveraging technology, delivered by best-in-class people."

Mission

"To achieve our objectives in an environment of fairness, honesty, and courtesy

towards our clients, employees, vendors and society at large."


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Revenue break-up by industry segment:

S.no. Industry Name Percentage

share

1 Manufacturing 15%

2 Banking, financialservices and insurance

36%

3 Telecom 21%

4 Retail 12%

5 Others 16%

Revenue break-up by type of services

S.no. Service Percentage share

1 Application development and

maintenance

45%

2 Business process management 6%

3 Consulting services and package

implementation

24%

4 Infrastructure management 5%

5 Product engineering services 1%

6 Systems integration 3%

7 Testing services 7%

8 Others 5%

9 Products 4%

Leadership Style:

Infosys believes that leadership is one of the most essential ingredients of

organizational success which is provided by its Chairman, N R Narayanmurthy.

Leadership is based on high business vision and predominantly supportive styles.

There is emphasis on developing leadership qualities among employees. For this

purpose, it has established Infosys Leadership Institute. Top management

emphasizes on open door policy, continuous sharing of information, takes inputs

from employees in decision making, and builds personal rapport with employees.

As we have seen over last few years, we have seen smooth transition from N R


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Narayanmurthy to Nandan Nilakeni and from Nandan Nilakeni to Kris

Gopalkrishnan without any adverse effects on the company outlook and each one

has proved to be an able leader taking company forward.

Staff (Human Resources):

Since Infosys is in knowledge-based industry, it focuses on the quality of the

human resources. Out of total personnel, about 90 per cent are engineers. At the

entry level, it emphasizes on selecting candidates who find the companys

meritocratic culture satisfying, superior academic records, technical skills, and

high level of learn ability. The company emphasizes on training and development

of its employees on continuous basis and spends about 2.65 per cent of its

revenues on up gradation of employees skills, and around 50% as employeecosts. In spite of thousands of people joining every month, Infosys has been able

to maintain its training standard mostly due to its highly matured processes

capabilities and investment in infrastructure.

Shared Values:

Values are important part of Infosyss organizational culture. In fact its tagline

depicts how much emphasis it lays on core values. The core values are:

Customer Delight: A commitment to surpassing customer expectations.

Leadership by Example: A commitment to set standards in business and

transactions and be an exemplar for the industry and teams.

Integrity and Transparency: A commitment to be ethical, sincere and open in

our dealings.

Fairness: A commitment to be objective and transaction-oriented, thereby

earning trust and respect.

Pursuit of Excellence: A commitment to strive relentlessly, to constantly

improve ourselves, our teams, our services and products so as to become the

best.


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Organizational Structure:

The company has adopted a free form organization devoid of hierarchies.

Everyone is known as associates irrespective of his position in the company.Software development is undertaken through teams and the constitution of

teams is based on the principle of flexibility. A member, who might have been

team leader in one project, may be replaced by another member of the same

team for another project. This system not only helps in creating the feeling of

equality but also helps in developing project leaders.

SWOT Analysis

Strengths

Since the company is based in India its competitive advantage is enhanced.The Indian economy, despite weak economic indicators such as relatively

high rates of inflation, has low labour costs. The workforce has relatively

high skills levels in Information Technology. Couple these two elements

together and you have an operational basis that offers low-cost based,

highly skilled competitive advantage. Trained Indian personnel often speak

very good English and are sensitive to Western culture, underpinned by

India's colonial past.

Infosys is in a strong financial position. The business turned over more than$4 billion in 2008. This means that it has the capital to expand, and also the

basis to leverage potential investors.

The company has bases in 44 global development centres, most of whichare located in India, although the company has offices in many developed

and developing nations. This means not only that Infosys is becoming a

global brand but also that it has the capability to support the globaloperations of multinational clients.

Weaknesses

Infosys on occasion struggles in the US markets, and has particularproblems in securing United States Federal Government contracts in North

America. Since these contracts are highly profitable and tend to run for

long periods of time, Infosys is missing out on lucrative business. Added to


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this is the fact that its competitors do well in terms of securing the same

Federal business (and one should also take into account that many of its

competitors are domiciled in the US and there could be political pressure

on the US Government to award contracts to domestic organizations).

Despite being a huge IT company in relation to its Indian competitors,Infosys is much smaller than its global competitors. As discussed above,Infosys generated $4 billion in 2008, which is relatively low in comparison

with large global competitors such as Hewlett-Packard ($91 billion), IBM

($91 billion), EDS ($21 billion) and Accenture ($18 billion).

It is sometimes argued that Infosys is weaker when it comes to high-endmanagement consultancy, since it tends to work at the level of operational

value creation. Competitors such as IBM and Accenture tend to dominate

this space.

Opportunities

At a time of recession in the global economy, it may appear that somecompanies will reduce take up of services that Infosys offers. However, in

tough times clients tend to focus upon cost reduction and outsourcing -

with are strategies that Infosys offers. So hard times could be profitable for

Infosys.

There is a new and emerging market in China as the country undergoes ahuge industrial revolution.

The strategic alliance between Infosys and Schlumberger gives the ITcompany access to lucrative business in the gas and oil industries.

There has been a trend over recent years for European and North Americancompanies to base some or all of their operation in India. This is called an

offshore service. Essentially there is a seamless link between domestic

operations and services hosted in India. Examples include

telecommunications companies such as British Telecom and banks such as

HSBC that have customer service and support centres based in India. Think

about the times that you have made calls to a support line to find that the

adviser is in Mumbai or Bangalore and not in your home market.

Threats

India is not the only country that is undergoing rapid industrial expansion.Competitors may come from countries such as China or Korea where there

are large pools of low-cost labour, and developing educational

infrastructures such as universities and technology colleges.


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Customers may switch to other offshore service companies in othercountries such as China or Korea.

Other global players have realised that India has the benefit of low-cost,highly-skilled labour that often speaks English and is culturally sensitive to

Western practices. As with all global IT players, Infosys has to compete for

skilled labour and this may have the effect of driving up wage levels, andmaking it more difficult to recruit and retain staff.

KEY SUCCESS FACTORS

1. Leadership team: Leadership team of Infosys includes some of the most

experienced veteran from the diverse sectors of industry. They have an

experience of heading some of the top companies of India. Well definedsuccession plan also facilitate to further enrich leadership team.

2. Deep and specialised industry knowledge: Infosys has specialised expertise in

the financial services, manufacturing, telecom, retail and logistics industries.

3. A strong product: They have some of the best products in their product

portfolio which entice many companies across the world.

4. Adequate capital: They have huge amount of free cash flow lying in their

balance sheet which helps them to take on new opportunities and reduces cost of

capital. They are way ahead of their competitors in this aspect. It also adds to

more profits. Huge available cash helps them to expend through acquisition

mode.

Strategy:

Infosys has adopted a client-focused strategy to achieve growth. Rather thanfocusing on numerous small organizations, it focuses on limited number of large

organizations throughout world. In order to cater its clients, the company

emphasizes on custom-built softwares. Another differentiating factor for Infosys

is that it commands premium margins. Company does not negotiate over margins

beyond a certain limit and some time prefers to walk-out rather than compromise

on quality for low-cost contracts. This has helped in building an image for quality

driven model rather than cost-differentiating model.


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Increase business from existing and new clients: Infosys has focused on

expanding the nature and scope of engagements for the existing clients by

increasing the size and number of projects and extending the breadth of its

service offerings. For new clients, it provides value added solutions by leveraging

its in-depth industry expertise. It increases its recurring business with clients by

providing software re-engineering, maintenance, infrastructure management andbusiness process management services which are long-term in nature and require

frequent client contact.

Expand geographically: Infosys plans to establish new sales and marketing offices,

representative offices and global development centres to expand its geographical

reach. It plans to increase presence in China through Infosys China, in the Czech

Republic and Eastern Europe directly and through Infosys BPO, in Australia

through Infosys Australia and in Latin America, through Infosys Mexico.

Enhance solution set: Infosys focuses on emerging trends, new technologies,

specific industries and pervasive business issues that confront our clients. In

recent years, it has added new service offerings, such as consulting, business

process management, systems integration and infrastructure management, which

are major contributors to its growth.

Develop deep industry knowledge: Infosys has specialized industry expertise in

the financial services, manufacturing, telecommunications, retail,transportation

and logistics industries.

Enhance brand visibility: Infosys invests in the development of its premium brand

identity in the marketplace by participating in media and industry analyst events,

sponsorship of and participation in targeted industry conferences, trade shows,

recruiting efforts, community outreach programs and investor relations.

Pursue alliances and strategic acquisitions: Infosys is known for its organic

growth (risk averse) strategy though it has strategic alliance with leading

technology providers take advantage of emerging technologies in a mutually

beneficial and cost-competitive manner.

Analysis of strategies:

MARKET PENETRATION STRATEGY: Current Markets: USA and Europe


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Current Products: ADM, BPO, KPO, consultancy services (in BFSI, manufacturing

and retail) and software products (financial products).

Recommendation: As most large clients in US and Europe are cutting costs,

Infosys needs to be more aggressive on cost and quality front.

Result of strategy: Unlikely to yield good results

MARKET DEVELOPMENT STRATEGY:

New Market: India, Middle-east and Australia

Current Product: ADM, BPO, KPO, consultancy services (in BFSI, manufacturing

and retail) and software products (financial products).

Recommendation: 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: Likely to yield good result.

PRODUCT DEVELOPMENT STRATEGY:

Current Market: USA and Europe

New 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: Likely to have good result. (Better the company acquired, the

better the result).

DIVERSIFICATION:

New Market: India, Middle-east and Australia


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New 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 STRATEGIES:

CONCENTRATION: 90% of Infosys revenues from American and European nations.

VERTICAL INTEGRATION: Infosys recently made a bid to acquire a Europeanmajor Axon consultancy to improve its business in European 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 (SET Labs) at

Infosys is the centre 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 collaboration

possibilities. Infosys promotes a favourable work environment that encouragesinnovation and meritocracy.

Suggested future strategies to be followed by Infosys:

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 enhancedflexibility and productivity. Aggressive focus on ERP solutions like Oracle and SAP. Expand into high end consulting. Consolidation and Strategic acquisitions are essential for future growth of

revenues.

Shift in focus from low cost advantage to high quality services. Quick adoption to high growth markets is necessary. Provide high end services in value chain.


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Consolidation among key IT players. Compromise on High margin for sustainable growth. In order to increase revenue growth, only organic growth will not help the

company.


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Wipro Technologies

Introduction:

Wipro Technologies Limited (formerly Western India Products Limited(Amalner)) is an Indian global IT services and consulting company headquartered

in Bangalore, India. As of 2012, Wipro is the second largest IT services company

by turnover in India, employing about 120,000 people worldwide as of December

2011. It provides outsourced research and development, infrastructure

outsourcing, business process outsourcing (BPO) and business consulting services.

The company operates in three segments: IT Services, IT Products, Consumer Care

and Lighting. It is 9th most valuable brand in India according to an annual survey

conducted by Brand Finance and The Economic Times in 2010

History:

The company was established in 1945 by Mohamed Hasham Premji as Western

India Products Limited listed on the New York Stock Exchange. Wipro was initially

set up as a vegetable oil manufacturer in 1945 in Amalner, Maharashtra,

producing sunflower Vanaspati oil and soaps. At that time, the company was

called Western India Vegetable Products Limited (later abbreviated down to

Wipro). The company logo still contains a sunflower to reflect their original

business. During the 1970s and 1980s, the company shifted its focus and began to

look into business opportunities in the IT and computing industry, which was at

nascent stages in India at that time. Wipro marketed the first indigenous

homemade PC from India in 1985. In 1966 Azim Premji, still the majority

shareholder as the chairman of the company at the age of 21 and with the

passage of time transformed it into one of the largest IT outsourcing services

provider of the world.

By 2000, Wipro Technologies emerged as the largest publicly listed softwareexporter in India and the first software services provider to be assessed at SEI

Level 5 in the world.

Wipro won the Golden Peacock Innovative Service Award for effective service

delivery using state of art technology in 2001.
http://en.wikipedia.org/wiki/Vanaspatihttp://en.wikipedia.org/wiki/Vanaspati


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Wipro was awarded SVG1, the highest rating in Stakeholder Value Creation and

Governance Practices by ICRA, a premier credit rating agency in India and an

associate of Moodys Investor Services of USA.

Wipro was awarded the India Manufacturing Excellence Award for its factory in

Pondicherry in the large enterprises category by Frost & Sullivan. Wipro wasawarded the ASTD BEST Awards for 2005 by the American Society of Training and

Development.

Wipro's Global Command Centre won the Marico Foundation and Business

World's Innovation for India Award in 2006. The conglomerate was rated as the

No.1 Network Integrator and No.1 Network Security Services Provider by Voice &

Data Magazine. Wipro was ranked 37 in The Brand Trust Report among the most

trusted brands in India.

MAJOR DIVISION OF WIPRO:-

IT Services: Wipro provides complete range of IT Services to theorganization. The range of services extends from Enterprise Application

Services (CRM, ERP, e-Procurement and SCM) to e-Business solutions.

Wipro's enterprise solutions serve a host of industries such as Energy and

Utilities, Finance, Telecom, and Media and Entertainment.

Product Engineering Solutions: Wipro is the largest independent providerof R&D services in the world. Using "Extended Engineering" model for

leveraging R&D investment and accessing new knowledge and experience

across the globe, people and technical infrastructure, Wipro enables firms

to introduce new products rapidly.

Technology Infrastructure Service: Wipro's Technology InfrastructureServices (TIS) is the largest Indian IT infrastructure service provider in termsof revenue, people and customers with more than 200 customers in US,

Europe, Japan and over 650 customers in India.

Business Process Outsourcing: Wipro provides business processoutsourcing services in areas Finance & Accounting, Procurement, HR

Services, Loyalty Services and Knowledge Services. In 2002, Wipro acquiring

Spectra mind and became one of the largest BPO service players.


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Consulting Services: Wipro offers services in Business Consulting, ProcessConsulting, Quality Consulting, and Technology Consulting.

VISION

Having already achieved the pinnacles of process and quality credentials(through SEI CMM, PCMM and Six Sigma), Wipro's Vision is focused on

attaining leadership in the areas of business, customer and people.

Business Leadership: Among the top 10 Information Technology Servicescompanies globally and the No.1 Information Technology company in India.

Customer Leadership: The No.1 choice of customers through innovativesolutions and Six Sigma processes.

People Leadership: Among the top 10 most preferred employers globally bycreating an environment of empowerment, intellectual challenge and

wealth sharing.

Brand Leadership: Wipro to be among the 5 most admired brand in India.

MISSION

Wipros mission is the quality which they have achieved through Six Sigma

SWOT Analysis of Wipro

Strengths:

Global R&D facility. Retention of the man-power is the best in the industry. Impressive list of clientele. Relatively lower receivable compared to the industry average. Diversified skill base across service lines Delivery capabilities & client satisfaction Commitment to go the extra mile


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Key success factors

Technological Excellence:

The biggest differentiator for Wipro against its Indian competitors is that Wipro

entered IT services through the engineering and route, given its entry intohardware in the 80s and then later to positioning itself as an engineering lab for

hire to the IT multinationals that entered India in the 90s. The lab-on-hire

business was eventually scaled up and today accounts for one-third of Wipros

revenues, making it the worlds largest third party R&D provider.

Innovative Solutions:

Wipro also prides itself as being a centre for innovative excellence and offers its

clients customized innovative technological and process solutions. In 2000, Wiproset up an Innovation Initiative with an internal innovation council, which worked

like an internal venture capital fund. Today there are 800 people working on such

innovative ideas. This approach has helped the company to position itself as an

innovator rather than a commodity provider of technological products.

Operational Excellence:

Over time Wipro has come to stand for operational excellence. The commitment

to quality has been a critical part of Wipros product offering and Wiproites say

that Six Sigma is big in Wipro across the company, whether it is BPO or IT

Services or R&D. The company is very process-oriented and focused on

operational excellence. Today, Wipro has built up its reputation and credibility

by being a stickler for process excellence and delivering on quality commitments

is a key brand benefit.

Global Footprint with Emerging Market Knowledge:

Wipros global footprint is also an important differentiator among its Indian rivals,

especially given its higher portfolio split towards emerging markets. The Asia-Pacific (APAC) region contributes to $1 billion in revenues and is considered to be

a key differentiator vis--vis Infosys.

A lot of emerging market clients, especially in India, the Middle-East and South

Africa are interested in Wipro not just developing technological solutions but also

bringing their developed market knowledge in retail, finance and telecom to

manage their business processes better. Other American clients such as Cisco and


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Microsoft have gone on record to say that they would prefer to work with Wipro

given its 60-year presence in India and the Middle-East.

Company Culture of Linking Values to Business Performance:

Wipros cultural fit with its clients is also important in the self-selection process.Wipros company culture is less flashy and less aggressive than some of its

Indian rivals. This culture resonates with Wipros clients in the manufacturing and

retail sector who prefer a more laid-back approach at building a relationship. The

companys cultural tone has been set right from the top, with Chairman Premji

often being quoted as saying that the brand Wipro is all about humility.

Recommendations:

Adopt the Dynamic High Technology Strategy Increase Global Presence More collaborations with other players; reduce dependence on only few

players

Leveraging the huge investments in R&D to gain competitive advantagewith respect to other players

Diversify into various Sectors Go for quality certification


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References:

http://www.nasscom.org/ http://www.infosys.com/ http://www.tcs.com/ http://www.wipro.com/ www.ncaer.org www.moneycontrol.com http://www.ibef.org/ http://www.economywatch.com/business-and-economy/information-

technology-industry.html

www.wikipedia.org http://www.mait.com/ http://economictimes.indiatimes.com/infosys-technologies-ltd/
http://www.nasscom.org/http://www.nasscom.org/http://www.infosys.com/http://www.infosys.com/http://www.tcs.com/http://www.tcs.com/http://www.wipro.com/http://www.wipro.com/http://www.ncaer.org/http://www.ncaer.org/http://www.moneycontrol.com/http://www.moneycontrol.com/http://www.ibef.org/http://www.ibef.org/http://www.economywatch.com/business-and-economy/information-technology-industry.htmlhttp://www.economywatch.com/business-and-economy/information-technology-industry.htmlhttp://www.economywatch.com/business-and-economy/information-technology-industry.htmlhttp://www.economywatch.com/business-and-economy/information-technology-industry.htmlhttp://www.economywatch.com/business-and-economy/information-technology-industry.htmlhttp://www.wikipedia.org/http://www.wikipedia.org/http://www.mait.com/http://www.mait.com/http://economictimes.indiatimes.com/infosys-technologies-ltd/http://economictimes.indiatimes.com/infosys-technologies-ltd/http://economictimes.indiatimes.com/infosys-technologies-ltd/http://www.mait.com/http://www.wikipedia.org/http://www.economywatch.com/business-and-economy/information-technology-industry.htmlhttp://www.economywatch.com/business-and-economy/information-technology-industry.htmlhttp://www.ibef.org/http://www.moneycontrol.com/http://www.ncaer.org/http://www.wipro.com/http://www.tcs.com/http://www.infosys.com/http://www.nasscom.org/

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