analyst meet august 27, 2002 “living up to the promise” © 2002 infosys technologies limited...

© 2002 Infosys Technologies Limited

Analyst MeetAugust 27, 2002

“Living up to the promise”

Living up to the promise

S. Gopalakrishnan

© 2002 Infosys Technologies Limited Slide 2


Agenda■ Promises made, promises kept

■ Growth and profitability■ Moving up the value chain

■ Expanding the service footprint■ Executing new services uniquely■ Presenting a one-stop-shop face to clients

■ A picture of the future…■ Market opportunities■ Organizational responses



Economic Slowdown

Profitable revenue growthRevenue and Net Income* Margin

$27 $40$68

$121

$203

$414

$545

$636

$0

$100

$200

$300

$400

$500

$600

$700

1996 1997 1998 1999 2000 2001 2002 2003G

Mill

ions

Fiscal Year ended March 31,

Reve

nue

0%

5%

10%

15%

20%

25%

30%

35%

Net I

ncom

e M

argi

n

Revenue Net Income*

CAGR = 57%

* Excluding one-time stock compensation charge



Understanding where the profits come fromData from Q1 FY 2002-03

Offshore revenue

51

Onsite revenue

49

Onsite salaries

32

Offshore salaries 9

Other direct 13• Depreciation 5• Software 2• Other direct 6

Gross Margin

46%Other operating

costs 16 • S&M 7• G&A 8• ESOP Charge 1

Optg. Margin

30%

Other income 3Tax 6

Net Income 27%



Moving up the value chainPrime Partner Status

2001

ITO SI

BPO

1981 - 1996

App.Dev.

Maintenance

Re-engineering

1996 - 2001

Enterprise Architecture Definition

Enterprise Solutions

Technology-enabled BPR

Integrated Business-IT Roadmap

96%

72%

4%

28%

1998 Q1 2003

AD/M, R/E Others

New services have expanded the addressable market by 3X



Systematic expansion of footprint■ A proven, defined methodology for introduction of

new services■ New services are delivered uniquely

■ Alliances as a critical way to “stick to the knitting” while presenting unified end-to-end face

■ Alliance partners are best in class, a true win-win relationship model

■ Concentrate on what we do well■ Aggressively use global delivery for win-win benefits

■ High quality client interface team presents these services in an integrated fashion



Generic project management

What?

Why?

Org

aniz

atio

nal V

alue

Add

/ Em

ploy

ee

How ?

Implement Support

SpecialtyIT services

Staffing Services

Most Offshore players

INFOSYS – proven GDM

Global Majors – new or no GDM

Source : Butler Group, Infosys

Strategy, consulting

As a result, we have a unique position in the marketplace



A glimpse into the future…■ Market conditions

■ Vendor consolidation – fewer, end-to-end service providers

■ Large deals■ Outsourcing becoming ubiquitous – changing role of

the CIO and his / her team■ Global Delivery is a necessary condition■ Managing risk (perceived and actual) is key



…and our response…■ Moving towards becoming an end-to-end player■ Creating a “large deal” cross-functional team for

such opportunities■ Working closely with outsourcing consultants to

build consensus for and thought leadership in outsourcing ■ This also enables “sole-sourcing”

■ Aggressively leveraging GDM in all activities■ Strong brand and financial stability reduces risk



Summary : Industry Convergence Who will win the race to the finish line?

Infosys :

+ Talent magnet+ High quality

execution+ Perfected Global

Delivery Model+ “Customer first”

culture+ Lean Orgn.

Global Majors :

+ Deep, hi-level client relationships

+ Readymade solution-sets

+ Consulting mind-set

+ Full set of services

• On-shore investments• Brand building• Education and training• Consulting mind-set• Full-line of services• On-shore hiring

• Offshore investments• Reduce fat / shift C.G.• Re-allocate resources• Invest in processes• Resolve orgn. issues• Resolve bill-rate redn.

analyst meet august 27, 2002 “living up to the promise” © 2002 infosys technologies limited...

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