Infosys Technologies Limited.

Growing Share of a Customer’s Business

Stakeholder’s Background

1. Infosys
Referred to as the “Microsoft of India”, Infosys (often called as Infy) is a perfect example of
Indian IT entrepreneurship. The then annual sales of the company were over Rs. 35 Billion
and net profits exceeding Rs. 9 Billion. With over 816 delivery centres worldwide and 24
delivery centres, Infosys employ more than 17 thousand employees. Infosys remains the first
company to get listed on the NASDAQ. The vision and the policies of the company encourage
merit based promotions and innovation. It is also a symbol of corrupt free industry in India.
Simple living and high thinking is the mantra that the founders of Infosys follow. Intellectual
superiority is given more credence than anything else.
Infosys had relied on offshore outsourcing model in the first decade of this existence. The
main contributor in the success of Infosys was the availability of the world class IT work
force at a very low cost. Infosys had to pay almost one third the salary to Indian IT
professionals in India as it had to pay an American IT professional in US. Infosys bagged
many maintenance projects and low value back office work in its early stage. Exceptional
performance in these projects helped Infosys to get more glamorous and technologically
challenging projects in future. Infosys started focusing on giving eng-to-end solutions so that
they can be associated with the project from the starting of the project life cycle and extract
the entire project budget surplus. Later in the company life cycle, Infosys started focusing on
the business domain excellence model. They started focusing on mission critical IT projects
which are highly customized projects and give high profits.
2. Prairie Four Square (PFS)
PFS is one of the leading providers of individual life group life, medical and dental and long
term insurance in the US. The real essence of the company can be known from the line “to
provide reasonably priced reliable, long term shelter and security for the families. The
company had a image of offering fair prices, personalized and friendly service, prompt and
equitable resolution of all claims. PFS maintained extensive and mission critical IT system
across US. IT technologies used by the company consisted of amalgam of mainframe for
batch professing, office computers for online analysis and network systems. PFS had
outsourced more than 65 small maintenance projects to Infosys and are now considering
outsourcing and entire mission critical IT project to them from the starting of it’s life cycle.

Problem statement

Infosys needs to get into the US market for making mission critical end to end products. PFS project
is very critical for their entry into this market. Rahul and Jaspal, Infosys’s representatives in US, have
to give a presentation to the PFS’s purchasing team and put a strong proposal infront of them. The
two main competitors are the two of the well known consulting firms. Their forte is in operational
consulting, but even they want to enter into the IT software end to end solution market. Infosys has
to take into consideration that these two consulting companies can under bid to get the project. At
the same time, Infosys has to show PFS their previous track record of achieving technological
excellence before time. Infosys also eyes the ERP, CRM and financial analysis system project which
PFS would need in future.

Challenges that Infosys can face

1. Loss of competitive advantage on the low cost and high skilled Indian IT work force: The
major point on which Infosys would be putting up their case for the project is that they can
do the work on low cost. This is possible because Infosys would work from Bangalore and
deliver the project in US. The low cost and highly skilled IT workforce of India would be the
USP of Infosys. But, the problem starts here. Both Excalibur and Merrimac have now
opened their development centres in Bangalore, India. The competitive advantage of low
bidding and high profits of Infosys would now not be there. Both these companies would
now bid less as compared to what they would have done if they were to develop the project
in US.
2. No experience of end to end project solution: Infosys is taking this project to mark its
presence in this end to end and mission critical project segment. This project is very critical
for Infosys. It’s a HIGH RISK and HIGH gain project. If they are able to pull this off, then it
would be a sure shot way to success in this niche segment. Lack of project experience in this
segment can be a hindrance for a successful implementation of this project.
3. Cost cutting measures by the CEO of PFS: After the recession on Wall Street, the CEO of PFS
was on cost cutting measure. It would be very difficult to make the CEO approve a high
budget project. As there is cash crunch in the organization, PFS would want a high quality
product on a very competitive price. Infosys would have to present a very strong case with
best of the cost accounting methodology followed.
4. Risk Involved: Taking PFS project as a means to enter a very niche market of end to end
product delivery and making customized products can be very risky. If this product is not
developed in time or in the stated budget or according to the software requirements, then it
would create a very bad image of Infosys. As software industry is a service industry, brand
image is very important. Thus Infosys has to take utmost care of making this project a
success. Even if Infosys has to face some short term losses, they should see the long term
profits that they can make if they make this product successfully and enter into this niche
market segment.
5. Demonstrating capabilities: In order to prepare a compelling for this project, Infosys has to
collect all the data, current and past performance records. Infosys has to effectively show
that their people can diligently and rigorously gather, document and analyze such complex
and ongoing data. Infosys also needs to show that they can handle this type of end to end
customer specific projects. Finally, Infosys has to make sure that they persuade PFS to
outsource the entire procurement software development to single firm and not multiple
 firms. All the three issues addressed above are the constraints that Infosys can face while
making the presentation to the PFS team.

An Ideal example of B2B marketing

1. Professional Purchasing: PFS has trained and qualified professionals which are incharge of
the procurement of the software. They have the technical expertise to check the quality and
specifications of the product developed by Infosys. Thus, Infosys has to follow PFS’s
purchasing policies, constraints and constraints. Because PFS has professional buyers,
Infosys has to provide a lot of technical details about the project to PFS.
2. Geographically Concentrated buyers: The target segment of Infosys is located in US and
other developed countries. Infosys has a moderate size of staff in US (Dallas). Because of
this, they can have a coordination and operational problem in developing and implementing
the software. As most of the high end buyers of this product are in developed markets like
US, UK or Europe, Infosys should concentrate on have large offices in those areas to provide
better services.
3. New Buy situation to Modified Re Buy situation: PFS is not giving contract to Infosys for the
first time. Infosys is handling more than 65 individual projects of PFS. The main motive of
Infosys is to make the new buy of the software from other software manufacturers to a
modified re buy from Infosys itself. PFS has made changes in product specifications, price,
and delivery requirements. The basics of the software development is still the same. This is
the biggest opportunity and challenge for Infosys. The selling of modified Re Buy is very
complicated and involves missionary sales force. This sales force has dedicated and most
effective salesperson. The past records and brand name of Infosys would be very helpful in
getting this deal cracked.
4. Bed Rock Customers: These are the customers who are very specific about the product
specifications, delivery time, cost of development and quality. They are ready to pay the
premium but want utmost quality and adherence of the contract. PFS is an example of a Bed
rock customer. They have clearly specified to Infosys and other bidders that they will not
accept any low quality product at any chance. PFS wants to automate the procurement
processes and wants the efficiency of the software to of top quality.

Importance of PFS as a client for Infosys

1. PFS was a loyal customer: PFS has outsourced around 65 small projects to Infosys. Initially
when PFS gave projects to Infosys, it was a very new company. PFS trusted Infosys and were
not disappointed. Since then, number of projects given to Infosys has been increasing every
year. Infosys had exceeded their expectations and were then given more maintenance
projects.
2. Knowledge Management Company: PFS was a knowledge management company which
deals with large amount of live data and numbers. Being in Insurance sector, PFS works in
mission critical projects, process and analyze data and acts upon tremendous amounts of
diverse data. Infosys which was built on the grounds of meritocracy finds PFS as a very apt
customer to lend its services. Both Infosys and PFS have the same principals of achieving
 technical excellence. Doing a project, a very challenging one, would definitely give a very
good brand upliftment of Infosys.
3. Information and Data mining solution: The need of Industry is to have complete end to end
solution. PFS is in insurance sector which does a lot of data mining and data crunching
activities. Giving a complete solution to this company would mean giving a total complete
solution from start to the end. This would be a great thing for Infosys as they would be
providing total end to end solution. If this pilot project for Infosys is a success, it would be a
great profit making venture for the company.

Defining and Importance ‘fine STP’ (Segmentation, Target and Positioning) for PFS

As this is a modified re-buy situation, Infosys should fine tune the STP analysis to get this project.
The segmentation is an end to end and mission critical project. This is a very niche segment and
Infosys should fine tune its segmentation strategy to influence the PFS procurement people.
Targeting strategy should also specifically design so that Infosys can target the insurance industry as
a whole and get contracts to make end-to-end solutions. The needs of this industry are different
from other industry that needs software solutions. Infosys should position itself in such a manner
that it is a preferred partner for technologically challenging and innovating projects. If Infosys can
complete the project on time, under the finance constraints and schedule, it will position Infosys as a
very technologically advanced and competitive firm and might get more projects that are similar.

OT- On Time

IF- In Full

NE- No Error

Long term and Credence based Marketing

The field of software making needs not a short-term marketing but a long-term marketing strategy.
IT projects take years to develop and then again a lot of time to implement. In addition, IT end to
end projects cost a huge amount of money. Thus, in this segment, relationships have to be built.
Word to mouth publicity also works wonders in this area. If Infosys is able to pull this project off,
then it will make sure that Infosys has a good brand image in this segment and will get some future
projects. Past records and performance is also a major factor in allotting new projects to companies.
Infosys has to show a fact that they were able to complete the project on time, under the allotted
budget and with good quality. Credence based marketing is recognized as one the strongest
marketing techniques.

Key Account Management by Infosys

Service marketing is all about customization of the product and services that are provided by the
vendor to the buyer. Because of this, “one to one marketing” and because of this dedicated
management of relationship with customer. This makes path for long term survival of the marketer.
Key account management makes a better delivery model. Statistics show that 80% of the profits
come from just 20% of the customers. It makes sense to concentrate more on those individual key
customers. Key account management evolved in this manner. Infosys treated PFS as a key account.
Infosys treated PFS as a partner in its business rather than just a plain customer. Key account
management reaches inside both the seller and the buyer. Therefore, it is much more complex than
simple marketing and sales.

Advantages of Key Account Management

1. Understand each customers need and then anticipate it later

Team to Team Marketing (Infosys to PFS)

As I just wrote before, Infosys had made PFS as a Key Account for this end-to-end project. Because of
special needs of PFS for this project, the team formation for this key account was very important for
Infosys. The team that Infosys had made for making a presentation to PFS consisted of the following-

a) Rahul: He was a 2nd generation American from Bay Area, California. Though he attending
frequent Indian association meetings, he was American at heart. He was one of the
important front-end person’s of the team. He was in the team mainly to communicate
better with American clients (PFS). He was an MBA in Finance and was then well
equipped to make a cracker deal with PFS, which would give Infosys an edge. Rahul had
also worked in Excalibur consulting for 10 years and now the same company is bidding
for the project. His work experience in Excalibur would again be an asset for Infosys in
estimating the bidding price and other things.
b) Jaspal: He was an entrepreneur at heat. Jaspal had started and operated a successful
Value Added Reseller (VAR). He knows how to get projects from companies which are
cash crunched or want to have a modified re buy. Infosys also trained him for
International Operations. This would again help Infosys in bagging this deal from PFS.
c) Latitha Krishnan: She was an Computer Science Engineer from IIT Kanpur and an MBA
from IIM B. She has an experience of more than 15 years in IT related projects in TCS.
She has also travelled extensively in Asia, Europe and the US completing a wide range of
IT projects. She was able to coordinate with Dallas and Bangalore team very well. She
watched TV channels aired in Dallas to get the feel of what is happening in that place.
This meant that Infosys was paying too much attention to make PFS feel that Infosys was
serious about the project. Latitha has also taken many courses in Infosys Leaning and
Development Centre. As she is working with teams in two difference continents, she has
to handle teams in two different time zones. Infosys has already excelled the Onsite
Offshore Model. Latitha is virtually living two different cities at the same time( Dallas
and Bangalore). The other two consulting companies have just recently opened their
offices in India and still have to learn this project development and delivery model.
d) Ravikiran Gowda: He was a senior programmer and Latitha top assistant. His role in the
team was very important. He was the one who advised Latitha on technical
 specifications and improvements that Infosys did to PFS systems. He was techie at core
and knew what PFS actually wants and how to go about it. His part was very important
in the marketing of the end to end mission critical procurement software. He knows
what PFS liked last time and what PFS might want to have or expect this time. Thus, with
his help, Infosys can put a better case for getting a total project from starting until the
end.

Why this project is important for Infosys

1. This project is very important for Infosys as Infosys wants to enter the segment of providing
end to end mission critical projects. This segment caters for the maximum wallet share of
the IT industry. More than 80% of the revenue is generated by these 20% of type of
projects. Infosys, till date has just got individual, small and maintenance projects from PFS.
They want to increase the domain in which they work and provide end-to-end solution to
PFS.
2. Insurance Industry is ever growing industry and needs data analysis and data crunching tools
very frequently. Thus, Infosys wants to position itself in this segment as a reliable and
technologically advanced partner. Infosys also wants itself to relate itself to PFS because PFS
has built its reputation of being a technologically advanced company.
3. Annual Sales of Infosys in US is just 3% of total IT market

Annual Sales(Billion Rupees); 1.38; 3%

Total Market(Billion Rupees)

Annual Sales(Billion Rupees)

Total Market(Billion Rupees); 46; 97%

The total US spend on IT projects is more than 46 Billion Rupees and Infosys is able to tap just 1.38
Billion out of it. This is just 3% of the total US market for IT related products. This it is prudent on
Infosys’s side to make efforts to get into this developed market and reap huge profits. With its
technologically advanced delivery model and high quality solution, Infosys would be at an
advantageous position to gain a greater share of this very profitable market.

Ariba e-Procurement System- How Infosys went beyond PFS’s expectation

1. Full Time Equivalent(FTE) of employee

FTE in India

$0 $2,000 $4,000 $6,000 $8,000

The Full Time Equivalent (FTE) of employee in US is around $8,000 and that of Indian IT professionals
is $3,200. This FTE of Indian IT professional is more than 2.5 times of that of FTE of employee of US.
This gave Infosys a huge advantage is cutting the costs of the project and bringing the project under
the tight budgets. This also made sure that Infosys could allocate extra man force on PFS’s project
and complete on time, rather, before time.

2. Cost saving to PFS

The number of corruption incidents per year went down from 24 to zero. Every corruption incident
caused a huge amount of money loss to PFS. For every corruption incident, PFS lost more than $
21225. This amount was reduced to zero by Infosys because they had reduced the number of
incidents to zero.