1 Managing Business Markets (MBM)

Managing Business Markets (MBM)

Case Analysis Note –Infosys® Technologies Ltd.:

Growing Share of a Customer’s Business
Gaining Customers and Customers and Sustaining Customer Relationships

Submitted to: Dr. Joffi Thomas

Indian Institute of Management Kozhikode

Executive Post Graduate Programme in Management

(Academic Year 2017-19)

Date of submission: 03 June, 2019

Submitted by

Sec Roll No Name

B EPGP-10-132 Rohit Sharma

Relyon Softech Ltd. – Branch Manager – CSD Jaipur

https://www.linkedin.com/in/rohitsharma2806/
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What quantifiable cost savings not specified in project contracts has Infosys delivered
to PFS during the past five years?

 Providing a ‘CIO Dashboard’ an online tool to the PFS managers which

demonstrates 2 metrics for each dimension – Quality, timeliness, and reliability
 During each of the 5 years Infosys has exceeded PFS targets by a wide margin
 Scrutinizing the nature of the tasks in each project, reengineering each project and
planning the allocation of resources
 Surplus 150 Infoscions in Bangalore were transferred to other PFS projects at “no
extra charge” to PFS
 Given that the cost of a fulfilment equivalent (FTE) are $8000 p.m. (Rs. 368000)
in the U.S and $3,200 p.m. (Rs. 147,200) in India , the resource reductions
represent a significant benefit for PFS

Pre-Scrutinization scenario
Period of engagement with Resource size
PFS
Year 3 75 Infoscions in U.S
250 people in India

Post-Scrutinization scenario
Period of engagement with
PFS
Year 4 & 5
Resource size
75 Infoscions in U.S
100 people in India

 Improving employee productivity rather than just gaining labour savings from
moving people offshore, is Infosys key goal and value proposition
 Data corruption prevention subroutine
o Problem before Infosys was awarded the responsibility of maintaining
legacy systems
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 Batch programs occasionally ran later than 5:00 a.m. corrupting the
data being used from central database and shutdown the online
system, idling 125 PFS workers for at least 4 hours
o Solution
 Infoscions wrote a subroutine that automatically shut down all batch
programs at 5:00 a.m.
 Cost Savings
o Reduced average number of corruption incidents per year from 24 to 0
o Infosys demonstrated to PFS early on in the engagement that Infoscions
had the ability to diagnose problems and write subroutines to correct them

Particulars Resources No of FTE per Savings

hours/seconds hour/second
One corruption 3 programmers 4hrs $45/hr. $45x4 = $180
event (Rs.8,280)
Technical support 1hr $40/hr. (Rs.1,840)
assistance
Employees idle 125 4hrs $42/hr. $42x4 = $168
time (Rs.7,728)
Running programs to Reconstituting 15 seconds @ $.39/second 15x$.39= $5.85
corrupt data (CPU) (Rs.269)
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What “knowledge transfer time” cost savings can PFS expect from sole sourcing the
Ariba e-Procurement System project?

 Asking Infosys to prepare a proposal for Ariba e-Procurement system project was
a thoughtful move by the seniors as Infosys work had exceeded PFS expectation
both in terms of quality and costs
 Infosys had a bigger advantage over competition as Infosys maintenance work had
exposed their people to all aspects of PFS IT system as well as how PFS approaches
business. As a result Infosys will be farther down the learning curve at the
beginning of the project. That might translate into better work more quickly which
would yield significant cost savings for PFS
 By being involved from day one in the project Infosys will be able to forgo the'
Knowledge transfer time’ required to bring programmers up-to-speed on technical
details of the system had they entered at the maintenance stage
 To master the Ariba e-Procurement system installed and customized by another
vendor, Infosys would need to deploy 5 programmers and it would take those 12
weeks to master the system. PFS would have to pay FTE of $8000 p.m. By
awarding the development and maintenance business PFS will save “knowledge
transfer time” cost from one vendor to the another
 If Infosys is awarded the development and maintenance business of the project they
would be in a far better position to quickly track down the source of any software
problems
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How can Infosys’ PFS Account Team persuasively sell the firm’s ability to deliver a
superior end-to-end solution for the Ariba e-Procurement System project?

 PFS senior management saw Infosys as an outstanding vendor for “offshore

outsourcing of IT maintenance projects. Below are the e.g. of how the ability of
the PFS account team in delivering high quality maintenance solutions which
would create a drive to sell firms ability to manage superior end-to-end solution
for e-Procurement project
o Team Support
 Infosys senior management would assist the PFS account
management team by assigning a number of support personnel to
the project
 Program manager, 3 business analysts, a technical specialists on
Ariba programming, a product specialist familiar with e-
Procurement software, a development analysts, and a technical
analysts
 Enterprise Solution Group would contribute a team skilled in
executing the company’s award winning “Package Implementation
Methodology”. This would insure that the Ariba e-procurement
software is up and running in a flawless manner in short order
 A technical specialist from Ariba would assist during the sales
presentation and implementation phases of the project
o Overall Quality of Infosys work
 At Infosys work is evaluated on 3 dimensions – quality, timeliness,
and reliability
 Infosys has exceeded PFS targets by a wide margin during each of
the 5 years managing PFS portfolio of maintenance projects
o Reengineering Project Assignments
 Reengineering project process and employee tasks are key
competencies of the Infosys human resource department
o Data corruption prevention subroutine
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 Ability to diagnose problems and write subroutines to reduce

number of corruption incidents per year
o Record Comparison algorithm
 Optimizing program process efficiency by writing a critical
algorithm for PFS that improved record comparison processing
efficiency by 56% and processing time by 8 hours
 Due to the comparison algorithm Infosys was able to create
additional 9 hours of free CPU time and eliminate the possibility of
sending the “compliance” analyses on all of its customer accounts
and report their findings to the insurance commission of each state
within the stipulated deadline (last day of each month). This made
the possibility of the state penalizing PFS negligible
o Reduction in Disability Claims Reserves
 Reducing the cash reserves to pay disability claims by $14 million
 Accomplished this by streamlining and reengineering not only the
claims submission process but also the claims payment process
 Skill of reengineering payment process will be essential in the case
of an e-procurement system
o Ongoing Ariba e-Procurement Projects
 Infosys has initiated 3 end-to-end Ariba e-Procurement system
projects for 2 retailers and healthcare organization
 In case of healthcare organization, Infosys has already been able to
save them $100,000 (Rs. 4,600,000) per year by switching the
company’s ‘change order’ procedures from manual to an online
software-based system
o Provide a 5 weeks training of Java training to the vendor management team
of PFS during their visit to Bangalore
 Training sessions to be conducted in the Infosys Education and
Research group
 Demonstrations of Java projects successfully completed in the past
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o Introduce PFS visitors to the new hires who come to Infosys with
considerable consulting experience