European markets
B. G. Srinivas
Vice President and Head – European Practice
Safe Harbor
Certain statements made in this Analyst Meet concerning our future growth prospects are forwardlooking statements, which involve a number of risks and uncertainties that could cause actual
results to differ materially from those in such forward-looking statements. The risks and
uncertainties relating to these statements include, but are not limited to, risks and uncertainties
regarding fluctuations in earnings, our ability to manage growth, intense competition in IT services
including those factors which may affect our cost advantage, wage increases in India, our ability to
attract and retain highly skilled professionals, time and cost overruns on fixed-price, fixed-time
frame contracts, client concentration, restrictions on immigration, industry segment concentration,
our ability to manage our international operations, reduced demand for technology in our key focus
areas, disruptions in telecommunication networks or system failures, our ability to successfully
complete and integrate potential acquisitions, liability for damages on our service contracts, the
success of the companies in which Infosys has made strategic investments, withdrawal of
governmental fiscal incentives, political instability and regional conflicts, legal restrictions on raising
capital or acquiring companies outside India, and unauthorized use of our intellectual property and
general economic conditions affecting our industry. Additional risks that could affect our future
operating results are more fully described in our United States Securities and Exchange
Commission filings including our Annual Report on Form 20-F for the fiscal year ended March 31,
2004 and quarterly report on Form 6-K for the quarter ended June 30, 2004. These filings are
available at www.sec.gov. Infosys may, from time to time, make additional written and oral forwardlooking statements, including statements contained in the company's filings with the Securities and
Exchange Commission and our reports to shareholders. The company does not undertake to
update any forward-looking statements that may be made from time to time by or on behalf of the
company.
© Infosys Technologies Limited 2004-2005
Analyst Meet 2004 | New Game. New Rules.
Slide 2
Agenda
» Infosys in Europe
» A brief historical perspective on Europe
» The Market Place
» Market overview - the fastest growing segments
» Market characteristics
» What Sells
» A profile of services
» Strategy for growth
» Core principles for the next phase of growth
© Infosys Technologies Limited 2004-2005
Analyst Meet 2004 | New Game. New Rules.
Slide 3
Europe : A key engine of growth for
Infosys
250
238
25%
Revenues ($ m)
200
19%
19%
19%
21% 20%
18%
150
15%
15%
133
108
100
9%
10%
78
50
5%
30
% of Infosys' revenues
204
11
0
0%
FY 99
FY 00
FY 01
FY 02
FY 03
FY 04
LTM June
04
Year
» Infosys serves Europe clients in all verticals – BFSI, Telecom,
Manufacturing, Retail and Others
© Infosys Technologies Limited 2004-2005
Analyst Meet 2004 | New Game. New Rules.
Slide 4
Infosys Europe : a historical perspective
Opened in 1996
Germany Office
Opened in1999
Benelux Office
1999 - Belgium
France Office
2001 Paris office established
Nordic Office
2001 - Office in Sweden
Swiss Office
2002 - Office opened in Zurich
Growth
UK was the first
Infosys office in
Europe
UK Office
Continuous investment in Europe has led to accelerated growth
© Infosys Technologies Limited 2004-2005
Analyst Meet 2004 | New Game. New Rules.
Slide 5
Local presence in Europe
» Service capability in 14 countries
» Belgium, Czech Republic, Denmark,
Finland, France, Germany, Ireland, Italy,
Netherlands, Norway, Spain, Sweden,
Switzerland and UK
» Serviced by 9 sales offices and one
Development Centre
»
»
»
»
»
»
»
»
»
Amsterdam (Netherlands)
Brussels (Belgium)
Milano (Italy)
London (UK) – HQ & Development
Centre
Frankfurt (Germany)
Stuttgart (Germany)
Paris (France)
Stockholm (Sweden)
Zurich (Switzerland)
» Strategy of direct marketing through
dedicated offices and local presence,
delivers growth and differentiation
© Infosys Technologies Limited 2004-2005
Analyst Meet 2004 | New Game. New Rules.
Slide 6
Agenda
» Infosys in Europe
» A brief historical perspective on Europe
» The Market Place
» Market overview - the fastest growing segments
» Market characteristics
» What Sells
» A profile of services
» Strategy for growth
» Core principles for the next phase of growth
© Infosys Technologies Limited 2004-2005
Analyst Meet 2004 | New Game. New Rules.
Slide 7
European IT services market –
considerable room for growth
Europe IT Services-Segment ($ Bn)
183
200
171
180
160
140
147
144
23
24
120
32
34
158
34
31
IT
Management
27
36
39
42
100
80
44
44
48
4
12
10
19
4
12
10
19
4
13
11
19
20
2002
2003
Education &
Training
55
4
14
11
20
5
15
12
Software
Maintenance
20
Hardware
Maintenance
0
2001
Development
& Integration
51
60
40
Biz Process
Mgt
2004
Consulting
2005
Source: Gartner
TPI reports a surge in outsourcing deals signed in H1 04 as compared to H2 03
© Infosys Technologies Limited 2004-2005
Analyst Meet 2004 | New Game. New Rules.
Slide 8
European IT services market by
geography (Year 2005)
48
50
45
IT Spending ($bn)
40
34
35
30
27
26
25
20
17
13
15
8
10
5
5
5
© Infosys Technologies Limited 2004-2005
Analyst Meet 2004 | New Game. New Rules.
r
Ot
he
d
rla
n
Sw
itze
lgiu
m
Be
en
Sw
ed
ds
rla
n
e
nc
Ita
ly
Ne
t he
Source: Gartner
Fra
y
Ge
rm
an
UK
0
Slide 9
Our approach to Europe
Today’s challenges
» Distinct streams of consumer
behaviour across Europe
Infosys’ Differentiators
» Europe is highly regulated
» Cost is not the only driver for
outsourcing in Europe
» The shift towards global sourcing
presents a significant challenge in
Europe
» Outsourcing is frequently associated
with staff augmentation in Europe
© Infosys Technologies Limited 2004-2005
» Increased local presence, hiring local
talent, developing language skills,
near-shore development centres
» Strict compliance with regulatory
terms, proactive work with
government bodies
» Providing a flexible, modular, value
driven proposition, tailoring our
services to European clients
» Providing an innovative modular
sourcing solution, combined with
proactive human resource redeployment approach
» Infosys has shifted the paradigm in
the market place away from “bodyshopping” towards a more mature,
managed services approach
Analyst Meet 2004 | New Game. New Rules.
Slide 10
Agenda
» Infosys in Europe
» A brief historical perspective on Europe
» The Market Place
» Market overview - the fastest growing segments
» Market characteristics
» What Sells
» A profile of services
» Strategy for growth
» Core principles for the next phase of growth
© Infosys Technologies Limited 2004-2005
Analyst Meet 2004 | New Game. New Rules.
Slide 11
A full spectrum of services for European
clients
Strategy & IT Consulting
Systems Integration
Integrated
Roadmap
e-Business
Business
Process
Reengineering
Enterprise Application Integration
Package Evaluation & Implementation
CRM
m-Business
Enterprise
Architecture
Definition
SCM
ERP
E-Procurement
Custom Application Development
Design
Develop
Test
Deploy
Business Process Management
Progeon Ltd. – An Infosys subsidiary
Industry Specific Processes
Cross-industry Processes
IT Outsourcing
Re-engineering and Maintenance
© Infosys Technologies Limited 2004-2005
T
O
T
A
L
O
U
T
S
O
U
R
C
I
N
G
Infosys Europe
has matured its
service offering to
provide the full
spectrum of
capabilities to
European clients
S
O
L
U
T
I
O
N
Analyst Meet 2004 | New Game. New Rules.
Slide 12
Delivering tangible value to clients in
Retail
Challenge
» A leading food and grocery retailer needed to transition the maintenance and
support of over 100 applications from several other IT vendors
» Many of the applications were business critical
» Had to be achieved in under 6 months, and without any impact on the service
levels to the end users
Solution
» Infosys deployed tried and trusted transition methodologies
» Providing 24 x 7 Production support, Maintenance, Enhancements and Bug
fixes, System Testing, Regression Testing, Performance Testing, Support for
Integration Testing and Support for Production Implementation
Benefit
» Improved service levels, with ‘Priority 1’ response time as low as 15 min
» Freeing up key resources within the client, redeployed for business initiatives
» Approximate saving of ₤ 1.9 m per annum
» Flexibility to cope with fluctuating requirements at short notice
© Infosys Technologies Limited 2004-2005
Analyst Meet 2004 | New Game. New Rules.
Slide 13
Delivering tangible value to clients in
Financial Services
Challenge
» One of Europe’s largest Financial Services organizations
» Retain and expand the customer base whilst continuously improving the quality
of service
» Needed to improve the cost-to-income ratio
Solution
» Engaged in application development/enhancement of core banking systems,
cards, payments and other retail systems, leveraging expertise in other areas
like infrastructure management, business consulting and IT process consulting
» Working with the bank to help meet regulatory requirements including CP186
and Basel II compliance
Benefit
» Delivered systems that enabled the bank to launch an offset banking product in
time to remain competitive in the market
» Predictable delivery - 100% milestone adherence, zero budget variance
» Cost benefits of up to 60% as compared to internal development
© Infosys Technologies Limited 2004-2005
Analyst Meet 2004 | New Game. New Rules.
Slide 14
Delivering tangible value to Automotive
clients
Challenge
» A leading automobile manufacturer
» Needed to extend its application support capability to encompass
diverse technologies for Sales and Marketing, Manufacturing and
Dealers
» Includes highly critical and complex plant floor applications
Solution
» Infosys leveraged its experience in manufacturing and sales
environment to provide an improved support service
» Carried out system enhancements where necessary
Benefit
» Upgraded service to be available 24 X 7
» Cost savings to date of over € 460,000
© Infosys Technologies Limited 2004-2005
Analyst Meet 2004 | New Game. New Rules.
Slide 15
Delivering tangible value to clients in
Telecom
Challenge
» A telecommunication company based in Europe, providing telephony, internet
and television services
» In a highly competitive environment, the client wanted to improve back-end
systems to deliver competitive advantages and efficiency gains
Solution
» Deployed web based operations support system, linked to online provisioning
and real-time technician allocation
» Infosys handles maintenance, help desk, development, re-engineering and
package implementation work for the customer
Benefit
» Reduced bad debt rate, improved collection process and eliminated data entry
of 100 paper contracts per day on an average
» Online provisioning and real-time technician allocation reduced cycle time from
3-5 days to a few minutes
» Automated back-office operations has enabled the customer to re-deploy nearly
10% of its resources to serve its expansion plans
© Infosys Technologies Limited 2004-2005
Analyst Meet 2004 | New Game. New Rules.
Slide 16
Agenda
» Infosys in Europe
» A brief historical perspective on Europe
» The Market Place
» Market overview - the fastest growing segments
» Market characteristics
» What Sells
» A profile of services
» Strategy for growth
» Core principles for the next phase of growth
© Infosys Technologies Limited 2004-2005
Analyst Meet 2004 | New Game. New Rules.
Slide 17
Core principle 1 - Structured solutions approach
» Europe is a highly fragmented market. Legislation, changes in market
dynamics and political change are pushing European companies to
reduce fragmentation
» Strong pace of change makes Europe an ideal place to develop
solutions
» There are some specific opportunities within Europe that Infosys has
identified, built solutions for and successfully marketed.
» Solutions are being developed for horizontal & vertical market segments
» In Financial Services
» Financial messaging
» Compliance – e.g. Basel II
» In Retail
» RFID
» Distributed Order Management
» Lead Time Optimisation
» Across sectors, Infosys is developing solutions to deploy, migrate and
integrate between technologies and versions of technologies
© Infosys Technologies Limited 2004-2005
Analyst Meet 2004 | New Game. New Rules.
Slide 18
Core principle 2 - Deeper, targeted
Alliance partnerships
» Infosys Europe is deriving growth and differentiation through
strategic relationships with key partners such as Microsoft, SAP,
Informatica, Oracle and Yantra
» Joint business planning and joint go-to-market strategies with key
alliance partners is resulting in rapid scaling and rapid result
» Joint solution development bring rapid benefits to clients from our
solution delivery capabilities and our alliance partners’ technology
solutions
» Treating alliance partners like we treat clients brings
differentiation through jointly planning targets and replicating well
honed skills
© Infosys Technologies Limited 2004-2005
Analyst Meet 2004 | New Game. New Rules.
Slide 19
Core principle 3 - Strengthened focus on
key verticals
» Infosys has developed additional capabilities for distinct markets
such as the Automotive and Telecommunications sectors
» Infosys has been able to penetrate into these sectors by
developing the required specialist skill sets and applying Global
Delivery Model methodologies
» Infosys is able to cross sell and up sell solutions, ensuring the
market potential is maximised
» Capability and solutions are being developed for these markets
» CAD-CAM
» Finite element analysis
© Infosys Technologies Limited 2004-2005
Analyst Meet 2004 | New Game. New Rules.
Slide 20
Core principle 4 - Focus on Consulting
» Consulting services provide a high value-add to our clients
» Such engagements generate larger downstream opportunities,
and provide a valuable insight into the business of our clients
» Consulting in Europe mixes a local talent pool with the power of
the Global Delivery Model to provide superior services
» Strong differentiator for Infosys against its competitors
» Providing a mix of on-site and offshore consulting capability
» Bringing rich mix of consulting skill and delivery resource, managing
the risk of offshore deployments for clients, resulting in rapid scaling
and mitigating the risk of failure
© Infosys Technologies Limited 2004-2005
Analyst Meet 2004 | New Game. New Rules.
Slide 21
Core principle 5 - Portfolio approach to
managing Europe
Invest
Regenerate
» Growth markets include Financial
Services, Retail, Manufacturing,
Automotive & Aerospace, Telecom
» More aggressive localisation plans
» Near shore options
» Solutions and alliances orientated
towards these markets
Sustain
» Sustaining business levels in
selected geographies
» Apply best practices from ‘Invest’
markets
» Focus on maintaining revenue
streams and profitability
© Infosys Technologies Limited 2004-2005
» Utilities, Pharma
» Develop specialized services
» Kick-start through alternate
strategies, then build incrementally
Others
» Pursue opportunities in new
geographies, new verticals
» Start-up in potentially lucrative new
markets and treat according to
segment
Analyst Meet 2004 | New Game. New Rules.
Slide 22
Open to questions…
© Infosys Technologies Limited 2004-2005
Analyst Meet 2004 | New Game. New Rules.
Slide 23
Thank you