Infosys to open unit in Mexico

Information technology major Infosys Technologies today said that it would soon open a 200-seater BPO facility in Mexico, its first in Latin America.

The company is also looking at other countries to start such units. “As we speak, we are in the process of moving into our own office. We have taken the office. It will be operational very soon”, company CEO and managing director Mr S Gopalakrishnan told here today. “Right now, we are looking to start with approximately 200 seats”. Primarily, the centre will focus on BPO. We will monitor the growth and then we will look at starting other services from the unit,” he added.

The NASDAQ-listed IT and consulting major has just opened a 60-seater BPO facility at the Philippine capital of Manila which will be ramped up to 700 seats in an year’s time.

Infosys Head (HRD, education and research) Mr TV Mohandas Pai, said “Mexico is closest to the US in the time zone and American clients are very familiar with that country. There is a good emerging employee pool there.” Infosys, which has a employees of around 65 nationalities, is also scaling up hiring of locals.

Original Story

Worry about efficiency, not currency: Narayana Murthy

Chennai: “Why should we (the industry) worry about things that are not in our control? We need to worry about matters we can control such as how to become more relevant to the customer and improving work efficiency,” N.R. Narayana Murthy, Founder, Chairman of the board and Chief Mentor, Infosys, told press persons in response to whether the strong rupee meant the IT, ITES, BPO industry would have to reconcile to lower margins in future.

Instead of worrying over currency movement companies needed to improve their efficiency by reducing administrative red tape and adding more value to clients, he said. When asked if the industry should seek any Government intervention such as sops or other favourable measures to reduce the impact of the rising rupee value against the dollar, Murthy said he was personally never in favour of any sops or concessions from the Government.

Earlier today he addressed a gathering from the Abdul Latif Jameel Poverty Action Lab (J-PAL) and the Institute for Financial Management and Research (IFMR) on ways to eradicate poverty.

Income is the least of worries for poor people. They want opportunities for their children to participate in economic progress, Murthy said quoting a World Bank report.

India has about 300 million unemployed youth and if a third of them could earn about $600 (about Rs 25,000) a year, it would result in about $60 billion being added each year to the country’s GDP, he said. He stressed the Government and industry to jointly create opportunities to employ such youth.

J-PAL and IFMR have set up centre at IFMR funded by a grant from the Mulago Foundation. The Centre will work to improve the effectiveness of poverty alleviation programmes by providing policy makers with scientific results to help shape relevant policies.

J-PAL has been working with NGOs and the Indian Government for a decade

It is currently involved in the ‘Balsakhi’ programme that provides remedial education to children lagging behind in school.

Infosys: Flat World, Flat Investment?

Nobody at Infosys came up with the phrase "flat world." Thomas Friedman invented the phrase and wrote a best-seller, weighing more than two pounds, called "The World Is Flat." Infosys adopted the phrase as a corporate mantra, and the stock has been exploding ever since. Fool contributor John Finneran explores whether the flat world is also a flat investment.

In Thomas Friedman's ode to outsourcing, The World Is Flat, he credits Infosys CEO Nandan Nilekani with coming up with the "flat world" phrase. Although Nilekani actually said the "playing field is being leveled," Friedman's rare exercise in saving words has paid off handsomely. Infosys (Nasdaq: INFY) adopted "flat world" as its corporate mantra, and the stock has appreciated 61% in the last year. And Friedman's book, which weighs more than two pounds and nudges 600 pages, has become a best-seller.

Growth rates from another world
The world may be flat, but Infosys' growth rate is anything but. Revenue has grown at a cumulative annual rate of 38% over the last five years, and net income has similarly jumped 33%. Results announced earlier this week -- revenues up 42% -- confirm this otherworldly growth story. Behind the growth, huge hiring and talent factories hum along. Infosys hired just 2% of the 1.4 million people who applied last year, and is reputed to have the largest training facility -- two words that frighten this Fool -- in the world. 

Flat-worlders come to India
Friedman forgot that the flat world works both ways -- India can come to America, but America can go there, too. 

Infosys is, like all its Indian IT peers, built on a fundamental labor arbitrage -- hire Indian IT staff at approximately one-sixth of their U.S. cost, and charge them to clients at the highest U.S. rate achievable. Chipping away at this advantage are the 20% wage inflation and high attrition rates in the Indian IT sector.

However, there is a faster way to level the playing field -- just hire more people in India and dilute the cost advantages of the native firms. Infosys has 66,000 total employees. In contrast, IBM (NYSE: IBM) has 43,000 employees in India, and plans to invest another $6 billion there over the next three years. Meanwhile, Accenture (NYSE: ACN) has 23,000 staff in India.  

The New World of old work
India may be the New World for IT services, but the work outsourced there is distinctly Old World. There are few signs of New World revenue, such as the transformational outsourcing services offered by IBM and Accenture. Here's the evidence.

First, reviewing Infosys' revenues by service reveals that maintaining software applications is the largest slice, at 29% of total revenue. Now, this revenue has the advantage of being delivered under long-term contracts, but it is typically for tired "legacy" systems, offering little upside to the client or outsourcer.

Second, though Infosys has invested in a dedicated consulting arm, total revenue from consulting is abysmally low at less than 4%. Consulting is critical to an IT services firm, because it helps shape client agendas and generate larger amounts of work downstream for the outsourcing and software factories. In contrast, Accenture earns 55% of its revenues from consulting, and 45% from outsourcing.

Third, the traditional pricing model of charging by the hour for every staff member dominates at Infosys. This model, called time and materials, accounted for 74% of Infosys' revenues in its last quarter.  

Finally, to sharpen the distinction, contrast the work Infosys and Accenture are doing in the airline industry. Infosys has announced it is implementing Oracle Financials for the finance function of a U.S. airline -- traditional implementation services for a well-established software package. In contrast, Accenture has set up Navitair, a separate, wholly owned subsidiary, providing technology and business processing services to 70 airline customers, including JetBlue and United. Navitair operates as an Application Service Provider (ASP), and provides services under multiyear agreements with a per-transaction or gain-sharing model.

"Flat world" investors, stay home
The good news is that investors in the flat world can stay home. It is much easier for Accenture and IBM to replicate the India-driven global delivery model than it is for Infosys and Wipro (NYSE: WIT) to make the round trip. You just take out your big checkbook and hire away -- no leadership institutes shaped like spaceships required. On the other hand, replicating the long-standing, consulting-driven client relationships enjoyed by the global brand names in IT services is much, much harder.

Valuations make the case for staying at home even stronger. Accenture has eight times the revenue and its return on equity is a third higher, but it trades at half the enterprise value of Infosys.

The world is still round
Infosys is a great company, but that does not make it a great investment. Buying its stock means a full subscription to the story of 30% to 40% growth in sales and earnings over five to 10 years. 

There are just too many pressures bringing Infosys' growth rate down. The frenzied hiring of staff by local and multinational firms will flatten the cost advantage in India, while the Indian firms will be slowed by the relationship and innovation assets held by firms like IBM and Accenture.

The world is still round!

Original story

Big ideas, no boundaries - Tom Friedman

By Thomas Friedman, writes for the New York Times.

MY rabbi told this joke on Yom Kippur: At the front of the lunch line at a parochial school was a bowl of apples with a sign that read: Take only one. God is watching. At the end of the lunch line, after the entrees, was a bowl of cookies, where a student had put up a sign: Take all you want. God is watching the apples.

That joke reminds me of the debate about free trade in America today. With the Republicans in charge, free trade is secure. Yet, while everyone is watching the front of the line, out back in the country, an erosion of support for free trade is under way. The Doha trade talks have stalled because of opposition by U.S. farmers, and the White Houses fast-track authority to negotiate free trade agreements expires soon. With protectionist-leaning Democrats likely to take the House or Senate, new free-trade accords probably will be stalled.

I hope Democrats wont go this route. Ive always believed in free trade, accompanied by better pension and health care safety nets. But Im not a free trader anymore. Im now a radical free trader. Why? Because in this new era of globalization, so many people now have the communication and innovation tools to compete, connect and collaborate from anywhere. As a result, business rule No.1 today is: Whatever can be done will be done by someone, somewhere. The only question is whether it will be done by you or to you.

That society which has the least resistance to the uninterrupted flow of ideas, diversity, concepts and competitive signals wins, says Nandan Nilekani, CEO of the Indian tech giant Infosys. And the society that has the efficiencies to translate whatever can be done quickly — from idea to market — also wins.

The old left thinks free trade is something that benefits only multinationals. In fact, it is now critical for small businesses and individuals, who can now act multinationally. They are the ones who create good jobs.

Last week, I was in Nebraska, where I met Doug Palmer. He and his partner, Pat Boeshart, make insulated concrete forms for buildings. The traditional way to insulate concrete with foam is to make the foam and then truck it around the country to building sites to be attached to concrete.

Palmers company, Lite-Form, found a Korean machine that, when combined with devices added by his firm, can make the foam and concrete together on site, saving big dollars in trucking. Today, Palmers South Sioux City company imports these machines from Korea, attaches its devices and exports them to Kuwait. His company has an Arabic brochure that tells Kuwaitis how to use the device. The brochure was produced by a local ad agency owned by the Winnebago Indian tribe of Nebraska. The agency was started by the tribes economic development corporation. Midwest Indians publishing Arabic brochures for Nebraskans importing from Koreans for customers in Kuwait.

Protectionism scares me, said Palmer, who has 28 employees. If we put up a moat and keep doing what were doing, thinking were the smartest in the world, were going to die. We have to have that flexibility to barter and trade.

A few days later, in Silicon Valley, I met Arijit Sengupta, a young Indian-American educated at Stanford, whose company, BeyondCore, developed a software algorithm able to detect and reduce errors in outsourced back-office work. When I met Sengupta, he handed me a card with his logo, which, he explained, was designed by a graphic artist he found online in Romania. His database and Web server are freeware, and he has outsourced his marketing, sales support and patent filings to Indian firms. When I asked, Wheres your office? he held up his BlackBerry, which takes calls forwarded from India, Boston and Palo Alto. He and his seven workers already have one Fortune 500 client.

When I started this company I never had to think about geography, he said. All I had to think about was: Where was the best resource to get something done. What you need are the big ideas. That is the tough thing to come up with.

The way you keep good jobs in America is not by building big walls, but by attracting people with big ideas — and then giving them the freedom to do whatever can be done with anyone, anywhere, anytime.

Original story

Infosys targets UK graduates in recruitment drive

Offshore Indian IT giant Infosys is launching a drive to recruit UK graduates for entry-level jobs as the company expands its European operations.

The company has already recruited 125 graduates for a similar programme in the US and is now looking initially for 25 graduates from 12 UK universities, including Cambridge and University College London.

Infosys has almost 60,000 employees worldwide, with around a third based outside of India and 1,500 of those in its UK operation. BG Srinivas, senior VP and head of Europe at Infosys, told silicon.com the aim is now to attract top graduate talent - first in the UK and then other parts of Europe.

He said: "We are looking at adding talent at the entry level and getting them on board as they graduate. We can put them through our training programme in India so they can understand our software processes and methodology and get them groomed into the Infosys way of doing things."

The graduates will spend six months in India doing full-time classroom training, from which they will earn a certification and gain hands-on experience working on projects before they are then put to work with clients in their local market.

Srinivas said the move is part of Infosys' strategy to expand its "global delivery model" and build up operations outside of India in its key markets worldwide.

He said Infosys is also confident its brand can compete with some of the traditional multinational companies which are all competing for the best graduate talent. "There is curiosity about what is happening in India," he said.

The recruitment drive starts on 16 October and Infosys is looking for graduates with a technology or liberal arts background. "It is about aptitude and the ability to learn and pick up new things," he said.

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Innovation: Outsourcing's Second Wave

Companies want an edge through new business models, but in innovative strategic thinking for clients, Indian IT firms lag the global giants, says Forrester's Navi Radjou

Back in June, IBM's (IBM) Chief Executive Sam Palmisano lit a traditional Indian lamp to kick off the company's largest-ever town hall meeting in Bangalore. Then he announced to his 43,000 Indian employees—an eighth of his global workforce—that IBM would invest $6 billion in India over the next three years.

It was a significant event for IBM—but it was an even more significant moment in the history of the global IT service industry. Palmisano heralded a new chapter in outsourcing, one where the big global players like IBM and Accenture (ACN) will lord it over the upstart Indian offshore IT services companies.

For the last two decades, the Indians pioneered and dominated the outsourcing game. Companies like Infosys (INFY), Wipro (WIT), and Tata Consultancy Services (TACSF), with their low-cost global delivery of services model, were able to leverage their talent at a low cost and deliver competitively priced IT services.

They specialized in providing such things as application development, infrastructure support, and business process outsourcing (BPO) to cost-conscious, top-tier multinational clients. The Indians disrupted the existing business models of high-priced consultants like IBM and Accenture, which saw their IT service revenues dwindle in recent years.

But now these Western players are turning the tables on their Eastern rivals. Corporate leaders are seeking more than cost efficiency to help boost profits. They are looking for innovation from their IT consultants that will help them increase their revenues. Here, global players like IBM and Accenture are coming out tops.

COMPETING THROUGH OPERATIONS. First, they are starting to beat the Indians at their own game by expanding the size of their offshore workforce to keep up with the competition for talent. IBM has more than quadrupled its Indian technical staff in recent years and is catching up with Accenture, which has already drastically expanded its offshore services capabilities.

Secondly, while using their offshore locations like India to help customers save costs, these Western consulting firms are now using their industrywide expertise to create global innovation networks (GIN), which they can tap into to create competitive new products and business models for their customers.

According to a recent survey of top-level executives sponsored by SAP (SAP), 55% of corporate leaders worldwide report that new business models—organizational structures, competencies, processes, and partnerships that define how a company operates—will confer a greater strategic advantage than new products and services by 2010. And both IT and business execs tell us that consultants remain one of their top sources for such business innovations.

This is where the Indian and other offshore providers lag. Offshore vendors are currently telling clients: "We will free resources for you to innovate." To which chief executives at client firms are now responding: "No, we want you to help us innovate." When Satyam (SAY) and Infosys talk about "process innovation" or "service innovation," they mean applying Six-Sigma or agile development techniques to optimize their own internal IT service delivery processes, not to innovate their clients' industry-specific processes and services.

And while Wipro and Tata Consulting employ research and development teams that can help firms innovate their products, they are not trained to deliver what chief executives care about most: new business models. So, offshore outsourcers need to align their interpretation of innovation with their clients'.

TEAMS OF INNOVATORS. Here, smart Western consultants have sensed and seized the opportunity. Here's how they work. These players are upgrading their own global delivery infrastructure to deliver not just technical services like applications development, but also business innovation services. That's where the global innovation networks come in. These are global ecosystems of internal and external partners that collaboratively design and deliver business innovations that clients want.

For instance, the software activities of IBM's Center for Business Optimization, whose consultants help reengineer and optimize clients' business models, are done in Bangalore by PhDs trained in operations research. In one current project, these Bangalore-based PhDs are working with IBM's logistics experts in Zurich and Japanese software engineers in IBM's Yamato Software Lab to jointly develop and deliver a scalable supply-chain optimization model to European and Asian clients.

Ditto for Accenture, whose Institute for High Performance relies on India-based MBAs to devise industry-transforming business models. And Deloitte's Intellectual Asset Management practice relies on a 100%-virtual innovation network, tapping a global expert network of 300-plus respected scientists, engineers, and physicians to help clients worldwide maximize their intellectual property (IP) portfolio value.

MORE THAN ENGINEERS. For now, the Western players are galloping away with the prizes. Offshore players in India and elsewhere can catch up—but only if they change their mindset and move fast. They need to acquire a new client-focused innovation mindset by recasting their operationally focused mission statement to help clients innovate by transforming their business processes, market offerings, or business models to boost value for their enterprise.

To effectively carry out this client-focused business innovator mission, offshore providers need a fresh, new talent pool and expertise. They need business designers who can invent new business models, industry specialists who can tailor business innovations to suit the client's context, and they need to extend their reach to global players who can broker and orchestrate the GINs for them.

So, in addition to the famous IIT-minted software engineers and mechanical engineering PhDs who can create massive programs and design jumbo jets, offshore providers also need MBAs and PhDs in economics who can design clients' new business models. These business designers must operate not out of India, but on European and U.S. soil where their clients are based. That way, while its software programmers in Bangalore are coding customer Food Lion's multichannel commerce platform, for instance, Infosys' U.S.-based microeconomists can invent the cross-channel pricing models.

STRATEGIC ADVISERS. Business execs in multinationals tell us that they are impressed by offshore providers' technical talent and project management skills, but underwhelmed by their vertical-specific process knowledge and domain expertise. To deliver business innovation to non-IT execs, offshore providers must retrain their consultants to act less as client order-takers or peddlers of cookie-cutter tech frameworks, and more as strategic advisers who can anticipate clients' business needs and engage them in collaborative innovation scenarios.

For example, before responding to a proposal from General Motors' (GM) IT department to upgrade its OnStar telematics software, Wipro's management consultants should proactively propose to the carmaker's chief financial officer a value-based pricing scheme, with risk-reward sharing, to co-develop and co-market an energy-efficient new car in emerging markets.

Finally, what is needed are some savvy global brokers. Offshore providers today promote their human assets, i.e., "we can rapidly assemble a team of our 5,000 engineers just for you." But users don't want to rely on a single provider's expertise alone to address their multifaceted innovation needs: Most users tell Forrester they prefer best-of-breed IT services from all over instead.

EMPHASIS ON ACUMEN. Offshore providers must form business development teams capable of seeding and orchestrating the external ecosystems of innovation specialists. With such Innovation Networks in place, Tata Consulting can quickly tap a Shanghai-based logistics expert to co-develop an innovative global transportation solution for GE's (GE) manufacturing unit in China.

Offshore players are behind in this second wave of outsourcing, but they needn't be if they can quickly build upon their existing strengths—trust-based, transparent client relationships and mature, automated global delivery processes—to shape these global innovation networks. Some already have pockets of expertise to drive industry-specific business innovation—Infosys has an expertise in financial services and Wipro in IP portfolio management, for instance. But their technical skills typically overshadow their business acumen.

Now is the time for Indian and other offshore players to emphasize the latter and transform themselves from low-margin IT vendors into strategic GIN services providers. As these global networks take off, companies will be able to access innovation twice over: from within their organizations and from outside, through their vendors or partners. That's when the true benefits of globalization will start to accrue, and make customers the real winners.

Navi Radjou is a vice-president with Forrester Research. He advises senior executives including chief information officers worldwide, on new organizational designs and business processes their firms must adopt to sustain global competitiveness through technology-enabled innovation
Original story

Infosys’ first U.S. recruits start in India

In an effort to create what it calls a "diversified, global workforce," Infosys Technologies Ltd., the $2 billion India-based IT-services company, has launched its new Global Talent Program.

The program involves recruiting recent graduates from countries in which Infosys operates. The first phase of the plan, which started this past July, involves 126 new recruits from the United States who are studying in a customized education program in the company's facilities in Mysore. Infosys is headquartered in Bangalore.

"We wanted to make [these recruits] understand our processes," said Bikramjit Maitra, vice president of human resource development for Infosys. "[For a] global delivery model [it's] how you work in a virtual team and in a cross-cultural team. You learn the best by learning side by side with Indian colleagues."

According to Maitra, approximately 80 percent of Infosys's 58,000 employees are in India while 65 percent of the company's business comes from the United States and most projects are done in virtual teams.

Participants in the current talent program will return to the United States after six months of training and will work with Infosys's U.S. clients.

"They can take this exposure and go back to the United States and work with clients," said Maitra. "They can implement what they learned in a virtual model."

Maitra also noted that because so many of Infosys's employees come from different cultures, this training in which the American participants learn how their Indian colleagues work and "understand their mindsets" is the "best diversity training one can get."

"We are creating teams which are cross cultural in nature," he said.

So far, the program is working, noted Maitra.

"The way they are learning and taking classroom training and the way they are mixing with each other is how we anticipated it happening," he said.

The program is fully residential with both the U.S. recruits and local Indian employees staying in the same campus.

Infosys recruited participants from 82 U.S. colleges including Massachusetts Institute of Technology, Notre Dame University, Drexel University, Columbia University and University of California - Berkeley. Maitra said the company went after both engineering school graduates and liberal arts majors. The one thing the company was looking for, said Maitra was "learnability."

"Technology changes so often and they go from one client to another," he said. "They need to use knowledge from one environment in another. They need the ability to learn a knowledge and utilize [it]. We believe that's an extremely important attribute of an individual that will be successful."

The recruits will all work in the delivery side of Infosys's business.

Currently, the company said the plans are for the program to increase to 300 participants by next year. Maitra said the company anticipates the program will continue to increase but how much bigger has not yet been determined.

"This is a pilot," he said. "We are very enthusiastic about the results. This could start a significant trend," he added.

Original story

Infosys Analyst Event - Win in the Flat World

Source: ARC

Infosys Technologies had their annual analyst event in Boson on September 25th and 26th. The theme of the event was “Win in the Flat World,” a natural theme for a leading outsourcing company headquartered in India. At a high level, many of their comments would have been familiar to those who have read Tom Friedman’s best selling business book, “The World is Flat.” However, the company is trying to capitalize on this marketing windfall by doing research into what does a “flat world” mean in their core verticals? What activities in these verticals lend themselves to outsourcing? How will outsourcing in combination with reengineering impact Cash Flows, the Balance Sheet, and the Income Statement?

All of this is the kind of red meat you need to throw in front of analysts to show you are a thought leader, but in a candid conversation between Andy Chatha, ARC’s CEO, and Kris Gopalakrishnan, Infosys’s President and COO, Kris was willing to admit there may not be that much revenue that can be directly attributed to “flat world” work. Much of the conversation centered on how Infosys has achieved what they have achieved. After all, Infosys is a $2 billion company, and it is one of the most profitable service companies. They are growing remarkably quickly, and they project they will grow by a third, to $3 billion in the next fiscal year. What this means in terms of people they need to hire, train, and make a profitable member of the organization is almost unfathomable in the West.

In a company growing that fast, hiring and retaining good people is a key success factor. Is Infosys using options? Infosys stopped giving options in 2002 when the US legislature began to talk about expensing options (Infosys is listed on Nasdaq). From their perspective, they were ready to make the change anyway. They had begun to feel that there was a lottery element to stock options based on when a person joined the company.

Instead the company has a profit sharing program. Good performers can earn bonuses that are larger than their base salary. The company ties bonuses to corporate performance as measured by revenue growth, team performance and individual performance. Team and individual performance are tied to profitability. The top executives also receive retention bonuses.

One factor in retaining people in India that is not often talked about is the Indian infrastructure. For example, their people in Bangalore can spend as long as two hours commuting each way. One way they are responding to this is by opening new sites in Tier 2 cities, which have a better infrastructure and better quality of life.

Indian Services companies are always asked about their attrition rate. This is because a customer’s experience is adversely impacted if the rate is too high and the consulting firm is continually bringing in young new hires to support the contract. Infosys’s attrition rate is around 11 percent, which is good for Indian firms. What these companies are rarely asked to do is to drill down on that attrition rate. We asked Kris to do this. Of the 11 percent, 2 to 3 percent of the people that leave are the non-performing people they want to leave. Infosys rates their people in four categories: As are high performers, Bs are average, Cs need improvement, and Ds are people that are not a good fit for the company. About 3 to 4 percent of those that leave are young people that have worked in the industry for a few years and now want to pursue a graduate degree, particularly an MBA. It is really the A performers that they need to monitor and make every effort to retain. Currently, about 3 to 4 percent of those that leave are high performers, which they feel is not bad for their industry.

In competing against the IBMs and Accentures on one hand, and the other Indian service firms on the other, good people and good processes are critical. It is not cost that differentiates, that is only the point of entry to a deal, and there will always be other service firms with lower price points. Kris argues the only differentiators are speed, excellence in execution, and innovation. To achieve this, you need a process driven approach to services that is certified to various global quality standards such as ISO and CMMI. This process must be balanced with project teams that are empowered to make most of the decisions. In the long run, customers stay because of quality, and Infosys is creating new benchmarks around measuring customer service.

From a price perspective, they are continuing to innovate to increase the proportion of people that work offshore (as compared to on site) on a particular project. That offshore ratio will differ depending upon the service; it can be quite high, for example, for IT Outsourcing but will always be much lower for consulting. Nevertheless, across their service areas they have been able to drive that ratio higher, partially by gaining customer buy-in, by explicitly linking their price to do a service to the offshore ratio to support the customer.

Infosys manages profitability at the project level. They use pricing sheets that allow sales people only to reduce prices to a certain level. If the sales person believes the price must be reduced more to win the deal, the matter gets kicked up to higher level executives. Finally, they have focused on serving large companies, rather than Tier 2 and 3 companies, and continuing to grow those accounts. Currently they do repeat year over year business with 95 percent of their customers. Their top 10 clients represent nearly 30 percent of their revenue, and they have four clients that spend over $70 million per year with them. All this keeps their cost of selling down.

Kris was asked if new technologies, like Web Services and Service Oriented Architectures, could adversely impact Infosys’s revenues by making integration easier. He is seeing no evidence of that, and, if it does occur, he views it as being a long way off. For example, in recent quarters there has been little growth for software companies in license revenues. For them, however, their revenues from services are continuing to grow robustly as clients consolidate multiple releases and integrate software applications from a variety of suppliers. He points to new technologies like VoIP and emerging cell phone applications, and argues as long as technology evolves, integration will be required.

ARC also met with Infosys executive management team and leaders of their vertical industry practices. Discussions focused on Hi-tech and Discrete Manufacturing, Energy and Utilities, Automotive, Aerospace and Defense, as well as CPG and Retail. In regards to the Energy sector, of particular significance is the recently announced alliance with Schlumberger that will enable Infosys to provide comprehensive information management solutions that integrate upstream technical and business processes. One-on-one meetings were also held with the leaders of Infosys Consulting and Strategic Global Sourcing business units.

Original story

Infosys Blogs and Criticisms

Infosys Technologies has 4 5 blogs now.

Think Flat - http://www.infosysblogs.com/thinkflat/

Managing OffshoreIT - http://www.infosysblogs.com/managing-offshore-it/

Microsoft - http://www.infosysblogs.com/microsoft/

SOA - http://www.infosysblogs.com/soa/

Web 2.0 - http://www.infosysblogs.com/web2/ (Updated: 12-Nov-06)

Webyantra , a tech blog that profiles Indian web products & services, has attacked Infosys' Think Flat blogs by calling this an shameless opportunism! The blog looks like an advertisement effort rather than an innovative medium to communicate. The criticism questions the word 'think flat' and proves that the tone of 'think flat' is quite negative.
Quoting Webyantra:

I read through the blog’s content ; it seems less like a regular blog and more like a compulsive eulogy of Friedman’s theory (Thomas Friedman incidentally, has quoted extensively about Infosys in his book). Sree (who apparently works for Infosys) suggests in this incisive blog post that the general tone of ThinkFlat seems quite negative with its over-emphasis on the word ‘flat’ which is usually used in a negative sense. I would tend to agree with him. In fact, I find the entire communication in the campaign quite unimaginative and ill-conceived. For the (ad+blog) seem to celebrate Friedman’s Theory of the Flat World, with the tacit message that if that theory is true, then Infosys is a default choice. This argument adds credence to the stereotype of Indian software services companies as being nothing more than smart (or shameless?) opportunists. I would have liked to see the (ad+blog) give me solid reasons as to why should the world go to Infosys, instead of taking refuge under Friedman’s theory.

It is not clear what is the purpose of these blogs. Is Infosys giving public blogs for employees, for improving their written communication skills? ;-) That sounds like a better option for me! Otherwise Infosys could take this opportunity for testing its brand name and see how people react even if do blunders, and measure the tolerance quotient in the blogosphere!

Gautam Ghosh also questioned why has Infosys started these 'think flat'and 'managing offshore it' blogs. Quoting Gautam:

The question I am left with is, why has Infosys started these blogs? They don't seem to be adding any conversation so far. Mohan's blog hasn't got a single comment so far. The content seems to be focussed at Infosys' clients and their language. Do they think this blog will show their thought leadership in this area and sway their clients from going back to Accenture and IBM now that theyhave Indian delivery centres too?

There are some conversations for which blogs are suited and some for which they are not. Infy needs to get that right, in my opinion.

Sree's Tech Notes, the blog of the Infosys employee (we are not sure though) mentioned in webyantra, proves with examples that the word 'think flat' sounds very negative. He also published review of Infosys' think flat blog, which again attacks the purpose of the blog and giving suggestions for improving the blog website.

It seems Infosys want to capitalise on Tom Friedman's book and also utilise the new web 2.0 technologies and showcase as a leader. But they have not done the homework before jumping in. Quick decisions and not always the good decisions!

Flat World is like Gravity - is it Good or Bad?

Deal with a changing world or disappear, said Nandan Nilekani, CEO and president of Indian outsourcing giant Infosys Technologies Ltd. "Is a flat world good or bad? That's like asking if gravity is good or bad," said Nilekani, who spoke at this week's Forrester Technology Leadership Conference.

very company will eventually be affected by the opening of emerging economies, structural shifts in global demographics, the ubiquity of IT and increasing regulation, said Nilekani, who refers to these factors as the four global forces.

Indeed, what companies make, to whom they sell, where they sell, at what price and where they produce their goods are all subject to these four forces, Nilekani said. "Everything in your business in some sense is up for grabs."

Up until 1978, more than half of the world's population was not part of the global economy, Nilekani said. Today, emerging economies, with their large markets and large labor pools, not only gave rise to companies like Infosys, but also turned India and China into one of the largest consumers of mobile phones -- 10 million a month. Shifts in global demographics -- an aging, affluent Europe, a youthful and relatively poor Asia -- will also affect how those phones are priced.

He outlined several ways CIOs can help their companies make the shift from an old world mentality to a flat world strategy.

First, instead of dreading the "China price" -- worrying what happens if somebody comes along who can make a product cheaper -- companies need to "be the China price. This is a reality which will not go away," Nilekani said. IT departments should be asking themselves if the IT is architected to take advantage of the global production and consumer markets.

Second, the concept of winning customer loyalty through customer service is par for the course. In the new flat world, customer loyalty will be won through faster innovation. Repeat business will hinge on what's new. "The pace at which we generate ideas from concept to product has to increase," Nilekani said.

Third, if CIOs want a seat at the head table, they need to show their organizations how to capitalize on, not just pay for, IT. "The question to ask is how can we go from being people who spend money on information to helping our business partners make money from information?" Nilekani said. The challenge is considerable, given the multitude and diversity of IT systems at many companies. The cost of streamlining or implementing a single business change becomes very expensive. Still, the "great companies will figure out how to make money from information," he said.

The great companies will also be able to "win in the turns," not just the "straightaway." Companies that can't respond to and take advantage of change are in jeopardy, Nilekani said, citing his own company's ability to adapt after the tech bust of 2001. In the past six years the company grew from 2,000 to 58,000 employees.

Original story