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3. Infosys Technologies India’s Software Icon

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DQI Bureau
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Revenues up by 115%, net profits up 114%, and a giant leap in the DQ Top 20 rankings, from No 9 to No 3. Can this get any better?

Infosys crossed the Rs 1,000-crore mark, and added 80% more heads to its workforce. Employee strength rocketed up from 5,389, while productivity rose to 20%. And then, there were those employee satisfaction surveys, including Dataquest’s Best Software Employers’ survey in April 2001, that saw it romp home as the winner.

One of the prominent reasons for the company’s success was the continuation of its de-risking policy. Its Top 5 customers contributed only 26% to total revenues, compared to over 30% the year before. Its Top 10 customers contributed 39% of revenues, compared to 45.7% the previous year. The customer base also increased from 99 to 121, even as 85% of revenues came from repeat business, thanks to an increasingly sophisticated global delivery model.

But as it is with all good things, there was the downside as well. The percentage of revenues coming from fixed-price projects dropped from 32% to 28%, while consulting still contributed less than 5% to overall income. Operating margins remained more or less stagnant at a time when bigger players were showing an increase in margins. Even so, at 41%, operating margins remained among the highest in the

industry.

Banking and finance remained the company’s core vertical, contributing nearly 34% to the revenues. Most of it was however, still customized software. This was because Infy’s B&F products, Finacle, BankAway and BanksConnect are still in the early stages of their product lifecycle. The company finally moved away from Y2k and post-Y2k work, concentrating instead on Web-based/e-commerce applications, with these

accounting for a good 28% of export revenues. Contrary 



to expectations, revenues from on-site work actually increased. However, this is expected to change in the coming
quarters.

Infosys won clients like UK-based Vodafone Networks and Huawei Technologies, China’s largest telecom equipment manufacturer. Telecom, in fact, contributed a healthy 18% to revenues. The company also became i2 Tech’s worldwide systems integration partner, and signed up with Intel to jointly set up a lab in Bangalore under Intel’s E-Business Solution Partner Program (EBSP).

SWOT

  • Strength: A very well-known brand
  • Weakness: Indiscriminate hiring can lead to quick skill obsolescence and higher re-training costs
  • Opportunity: Growing importance of Indian developers in non-US markets
  • Threat: Competitive pressure from traditional and upcoming players in a tight market

PERFORMANCE 



HIGHLIGHTS

  • Revenues increased by 115% to Rs 1,901 crore
  • Productivity rose from Rs 6.2 lakh to Rs 19.3 lakh per employee
  • Employee strength grew from 5,389 to 9,831
FACT SHEET
Chairman and CEO: NR Narayana Murthy

START-UP YEAR: 1981 PRODUCTS & SERVICES: Customized software services and banking products

EMPLOYEES: 9,831 ADDRESS: Plot No. 44, Electronics City, Hosur Road, Bangalore 561 229.TEL: 852 0261

FAX: 8520362 WEBSITE: www.infy.com
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