Tuesday, July 31, 2007

Waters Publication named Infosys technologies best outsourcing partner.

Readers of Waters, a leading publication covering the needs of chief information officers in global capital market firms, rated Infosys Technologies as "Best Outsourcing partner".

"Like other companies selected in Waters Rankings, Infosys Technologies has demonstrated a strong understanding of the particular business challenges facing financial services firms," said Ben Ray, group publisher of Waters and other financial IT titles at Incisive Media. "Our readers have a clear idea when they must choose the best outsourcing partner in a crowded and highly respected field. Infosys leads the way in the outsourcing space for financial service firms on Wall Street and The City."

"Like other companies selected in Waters Rankings, Infosys Technologies has demonstrated a strong understanding of the particular business challenges facing financial services firms," said Ben Ray, group publisher of Waters and other financial IT titles at Incisive Media. "Our readers have a clear idea when they must choose the best outsourcing partner in a crowded and highly respected field. Infosys leads the way in the outsourcing space for financial service firms on Wall Street and The City."

Original Link

Mangalore: 'Scholars 2007' Inter HS Quiz Held at Infosys Mangalore

Mangalore, Jul 29: Scholars 2007, the annual inter high school quiz competition, was held at Infosys Mangalore on Saturday, July 28.

The quiz was inaugurated by BRC coordinator Mangalore Sumangala S Nayak. The competition saw the participation from 93 schools in and around Mangalore.

This is the third consecutive year that Infosys is conducting this quiz. Kannada and English quizzes were conducted for the students based on their medium of education.

After the preliminary written test, 12 teams (6 Kannada and 6 English) were shortlisted for the finals. Rachna Shetty and Sagar Y R from Sri Durga Parameshwari Temple High School, Kateel and Aditya Nair and Vasanth Bhakta of Milagres Pre-University College were the winners of the Scholars 2007 Kannada and English quizzes respectively.

The prizes were distributed by Infosys Mangalore vice president and head of development centre Sudhir Albuquerque.

A tour of the Infosys Mangalore facility was also arranged for the students and the guardians accompanying them.


Original Story

Saturday, July 28, 2007

Xansa in Takeover Talks with Infosys?

Tascali UK reports that Xansa is in takeover talks with some companies.

Xansa is an outsourcing and technology company in UK wit £379.7m revenue and 8,600 employees. Bridgewell analyst Michael Donnelly said he was "99 percent sure" an Indian firm was behind the deal. "It could be Infosys, Wipro or Tata," he told Reuters. "They are big in low-cost India but their challenge is client contact. How do you achieve that? Buy a Western company. The Indian companies have a lot of cash to burn."

Quoting from Original Story

LONDON (Reuters) - IT services firm Xansa said on Friday that it was in advanced talks that could lead to a takeover offer, sending its shares up 37 percent.

The company said in a statement that the potential offer would be at a premium to the current share price -- which was already up 20 percent for the day by the time the announcement was made.

Shares in the group, which counts the BBC and the National Health Service among its clients, then rose further to be up 35 percent at 103 pence by 1:39 p.m., valuing it at 358.5 million pounds, according to Reuters data.

A spokesman for Xansa declined to comment further, but Bridgewell analyst Michael Donnelly said he was "99 percent sure" an Indian firm was behind the deal.

"It could be Infosys, Wipro or Tata," he told Reuters. "They are big in low-cost India but their challenge is client contact. How do you achieve that? Buy a Western company. The Indian companies have a lot of cash to burn."

Spokeswomen for Infosys , India’s second-largest software services exporter, and third ranked Wipro declined to comment.

A spokesman for industry leader Tata Consultancy Services also declined to comment.

Earlier a trader had said he had been told Cap Gemini was behind the bid, but the French IT group’s chief executive, Paul Hermelin, told analysts that there were no talks going on between the two firms.

Market rumours have also linked Cap Gemini with Infosys, but Hermelin told reporters there had been "no kind of contact whatsoever" between the companies.

Xansa reported in June that pretax profits rose 23.3 percent to 16.4 million pounds for the year to end April, below analyst forecasts.

The company is also without a chief executive, after Alistair Cox resigned to join recruitment group Hays , again in June. Non-executive Chairman Bill Alexander is currently in charge on an interim basis.


Friday, July 27, 2007

Infy’s Finacle head Merwin Fernandes puts in papers

BANGALORE: Infosys Technologies is seeing the exit of another top level official with the head of its banking product business leaving the organisation. Merwin Fernandes, who was heading Infosys’ banking product business - Finacle - has put in his papers, sources told ET.

Mr Fernandes has spent close to a decade in Infosys and was the VP and global head - Finacle. He moved into the role following the elevation of Girish Vaidya as senior vice-president, Infosys Leadership Institute. However, it is not known what will be the Mr Fernandes’ future plans, though speculation is rife is that he will be moving into one of the rival businesses of Finacle. Confirming the development, Infosys in a statement said: “Yes, we can confirm that Merwin Fernandes has resigned from the services of the company to pursue his personal interests. At this stage the organisation is in the process of appointing a successor. The successor will be announced shortly to ensure a smooth transition.” Sources said Infosys has asked Mr Fernandes to stay on in the organisation till a successor has been found. Already, Infosys has sent letters to the various banks which are its customers, notifying the change. This will probably be another top level official exit from Infosys after Akshay Bhargava left its BPO business. Its other high profile exits have been Hema Ravichander.

Finacle - a core banking solution has been doing well for Infosys having recorded over 50 per cent growth year-on-year (YoY). For 2006-07, it registered revenues of Rs 538 crore recording 50.7 per cent YoY growth. Finacle constitutes 4 per cent of Infosys revenues which has 91 customers with presence in 55 countries. It has a dominant share among the Indian PSU banks. Syndicate and Canara Banks have chosen to implement Flexcube of i-flex.

Finacle has been positioning itself as a global player and is targeting the global tier 1 and tier 2 banks. It had recently bagged an order from Emirates Bank of Dubai. It is also looking actively at the regions of South East Asia, western Europe and Australia and New Zealand where deals might start off from anywhere between $40 million and go up to $500 million.

At the marketplace, Finacle is competing not only against the Indian players like i-flex, FNS of TCS but also against the established global players like Misys, Temenos and Metavante. The current market size of core banking solutions is expected to be in the multi-billion dollars range spread over a longer period of time.


Original Story

Girish Vaidya joins Infosys Leadership Institute as new VP

Girish Vaidya, Senior Vice President and business head-Finacle, the banking product division of Infosys has been promoted to senior vice-president, Infosys Leadership Institute.

Before joining Infosys in January 1999, Mr. Vaidya was with ANZ Grindlays Bank for 24 years, where he led the team which developed Management Information System (MIS) for ANZ Grindlays Bank in the mid eighties and subsequently headed the bank's technology function in South Asia.

Meanwhile, Merwin Fernandes, VP, Global Head- Sales and Marketing, Finacle has resigned from the services of the company to pursue his personal interests. Infosys has sent letters to the various banks which are its customers, notifying the change.

At the marketplace, Finacle is pitted against Indian players like i-flex, FNS of TCS as well as global players like Misys, Temenos and Metavante. It currently constitutes 4% of Infosys revenues with 91 customers with presence in 55 countries.

Original Story

It’s a great time to be an educated middle-class person in India - Mohandas Pai

The amazing transformation in the country’s job sector has only just begun, says Infosys’ Mohandas Pai.

GRN Somashekar

Welcome change: T.V. Mohandas Pai, HR chief of Infosys, says it’s a great time to be an educated middle-class person in today’s India.

Rasheeda Bhagat

He may have started his career in Infosys Technologies in 1994 in finance but, today, as a director on the Board and chief of HR, T.V. Mohandas Pai is all passion and excitement on the HR scene in India, where he sees HR as “the biggest challenge in the next 20 years. We have to invest in people, pay them well and respect them,” he says. Spelling out the amazing transformation on the job front in India in recent years, and the role played by the private sector in this, he says that when he qualified as a CA in 1982, “I had 12 job offers, all from the public sector, except for one. In the private sector, more than talent, jobs went by relationships, as we had a very feudal business culture. But the public sector took the brightest people. Till the last decade it was the one that respected the educated middle-class with no credentials… who didn’t have a chance in hell of getting into a good private company because it worked in very feudal and family oriented ways. But now the balance has shifted and it’s a great time to be an educated middle-class person in India, and the IT industry has created this. It has sent a message to parents: Invest in a child and pay good fees, because he/she will get a good salary.”

Pai was born in Bangalore in a lower middle-class family; his mother was a schoolteacher and his father was raised in an orphanage. The child was sent to a Bangalore school; “in those days you had to be first in class, and get 100 marks in mathematics.”

So did he manage it?

“Oh yes, it was not negotiable,” recalls Pai, seated in his spacious room at the sprawling green Infosys campus in Bangalore. As a child he was fascinated by books and continues to be a voracious reader — “name me a book and chances are I would have read it”. His holidays were spent in the public library where his mother had a membership and he devoured the books there “from Victor Hugo to the Grimm brothers.”

He did his CA and law together; “I wanted to be independent. I didn’t want to work for anybody; I was a rebel.” In 1982 he started practice as a CA in his friend’s office, did consultancy for Prakash Roadlines group from 1986, and later joined them as Executive Director, and remained there till he joined Infosys in 1994.

Even today Pai is visibly excited as he describes how he joined the IT giant. A friend in Enam Securities that handled the Infosys IPO suggested he buy some shares through private placement in 1992 “and I bought 1,500-2,000 shares at Rs 85.” Later he attended the investor conference held by the company before the IPO, along with a friend. “Murthy and Nandan (Nilekani) were making presentations and I told my friend to ask a lot of questions on the prospectus. Those days I had a collection of 3,000 reports; I used to have annual reports for breakfast, would go to AGMs, hound the management and ask a lot of questions. I was a bit of a shareholder activist,” he says.

He had invested in ACC, Kothari Sugars, Tata Steel and Bangalore Leasing, “though I didn’t make much money in equity!” He attended the AGM after the IPO at West End Hotel where all the six founders were there in suits, with three stenographers taking notes. “I asked them ‘why are you paying yourselves so little…?’ they were getting Rs 12,000 or so. I said ‘you should pay yourselves more, you’re making good money and you should respect talent’.” He also asked them why they were paying their auditors less!

After that he was in touch with Nilekani and at subsequent analyst meets too he posed questions on why Infosys was holding so much cash. “Then Nandan met me for lunch in December 1993, and said ‘we have a vacancy; will you join?’ I said ‘I’ll only join if you give me a senior position, but not as an employee, only a consultant’. He said ‘okay, come on board’.”

Murthy, the finance manager

So he joined in February 1994, and worked on several projects such as a private placement, ESOPs, annual report and so on. Pai is effusive in his praise of Murthy’s financial skills. “He was working on a financial model for Infosys, and working with him was a fascinating experience. Here was this man using a software... spreadsheet, et al. Actually he had prepared a financial model — he did 98 per cent of the work, my contribution was only 2 per cent — to forecast Infosys’s growth, and it’s a model that we use even today. He’s an unbelievable man; he’s probably the best finance manager this country has seen. His understanding of finance, the fundamentals, is unbelievable... he’s simply brilliant.”

They worked on this model together and, one day in 1995, “Murthy came to my room and said ‘why don’t you join us?’” G.R. Naik was retiring as head of finance, and “he told me I should take his place. So I joined as Vice President, Finance, and the rest has been a dream run!”

On why he shifted from Finance to HR in 2005, Pai says, “It was a great journey in finance. The most important thing we did in finance was to set standards in financial reporting, corporate governance, transparency, quality of work, engaging government on policy issues, the ADR, etc. While doing all this I worked very hard to create a team of finance people.”

In April 2005 he told Murthy he wanted to step down as CFO, telling him: “I’ve done all this for 12 years and enjoyed every bit. But if I hang on too much, I will not allow my people their day in the sun, and won’t be true to myself or Infosys because a leader is supposed to create new leaders. If I hang on, they’ll get frustrated and that’s not right. So he said ‘why don’t you become Director, Finance and Bala can become CFO’ and I said that means he reports to me again, so what has changed. I should step away.”

Reluctantly, adds Pai, Murthy agreed, and the change was effected in May 2006. When asked what he’d do next “I told Murthy I’ll do some finance stuff, administration, and fade away. And he said: ‘No, handle HR. I know you’ll do it very well.” Around that time Hema (Ravichandran) wanted to go, and Pai stepped in, but as a director for governance, mentorship and policy. “I’m also responsible for HR, education and research, and now the Leadership Institute. When Murthy says something you listen! So that was it.”

Obviously he dotes on Murthy; so what was it like for him when he called it quits from day-to-day work at Infosys?

“It was a big personal loss for me. Murthy is such a brilliant man, I enjoyed going into the room and fighting with him, raising issues. He was my mentor; he mentored and challenged me to realise my potential. I learnt everything from him; how to be a better human being, the virtues of discharging obligations, to be courageous and stand up for what you believe in. I also learnt from him how to build a great company. He was like a foster father to me after I lost my father.”

Corruption

Did he have to deal with corruption and ethical issues?

“Yes, but comparatively less. First of all our need to deal with the government has been less compared to a manufacturing company. Two, we came at the right time when government activities vis-À-vis business came down in the liberalisation era. Three, because we were in technology and the export sector we were treated specially. The government did not understand what we were doing, and kept away! There was a mystery and aura about us.”

Also, he adds, IT had “a wonderful person called Dewang Mehta who created a brand equity for the industry”, and not too many “demands” were made from it.

But when they had to face corruption, “we remained steadfast and said we’ll not succumb and people respected us. For example in a North Indian city known for corruption, the officer said: “Infosys ko de do, donR 17;t waste time!”

Pai adds that integrity is very important in Infosys where background checks are rigorous; “we have low tolerance levels for breaches in integrity; if you breach you have to go.”

Dream for Infosys

“I want to see it become the most respected name in IT services in the world; we’re probably in the top 10 now, within 2-3 years we should be in top 5, but we have to become the most respected and symbolic of the aspirations of educated people the world over, recognised for quality, value system and ability to meet client needs.”


Original Story

Thursday, July 26, 2007

"The Decline Story of Infosys Trivandrum"

We are informed of this posting in a discussion forum (mytechnopark.com) by a reader. Though we feel very sad about the contents, we are sharing with the readers. This is an old news item, posted in the forum on 12-Mar-07.

Original Link

Dear Tehnopark collegaues,

This post is to ensure maximum members of the technopark community knows about this anti social element AJAYAN PILLAI, the so called Delivery Manager in Infosys Trivandrumin technopark -Retail.This guy along with one of his direct reportees(Alok Kumar Garg, ) to provide fraudulent & undeserving promotion to his wife,JEENA NAIR were caught, enquired and punished by the Infosys Senior Management(none other than Narayana Murthy).Ajayan was completely resopnsible for ruining the RETAIL IBU of Infosys Trivandrum.He is notorious of using the Infosys reputation and facilities for his personal benefits and also reponsible for creating the cheap political culture in Infosys Trivandrum - Retail.

Being caught, these 3 frauds have been trying to move to other companies. Alok has been successful in moving to IBS, but caught sooner by the IBS mangement and will be sent out soon.Ajayan through his cunning attempts, tried to screw the employees, who brought his frauds to the notice of the management.The empoyees have to move out.

Please make sure this message is disseminated to the management and the employees of your companies to protect the orgainisations and their employee's interests from people like the above mentioned, trying to make IT companies like government offices.


Is it true folks? Can't believe this is the Infosys we worked for many years!
Do you agree? How is Infosys Trivandrum now? Are those 'anti-social elements' still with Infosys? Do post more details for the benefit of the readers.

- Ex-Infoscions, The Infy News Team


Original Link

No time to rest on our laurels: Infy CEO

A top infotech official has warned the Indian IT industry, already facing trouble spots such as wage inflation, high attrition rates and a strong rupee, cannot afford to sit on its laurels as global competition is on the rise.

"We (Indian IT industry) cannot rest on our success to date," newly-appointed Chief Executive Officer and Managing Director of Infosys Technologies Ltd S Gopalakrishnan told PTI in Bangalore.

"It's all about what we are doing today, how we are going to compete tomorrow, which is going to decide your future. So, it's being relevant, continuously evolving and changing to meet the market requirements."

Asked which are the countries he thought have the ability to beat India in its own game, Gopalakrishnan said: "Certainly China has the potential because it has a large number of engineering graduates and it's also a growing economy".

But he would not say how many years before Beijing catches up with the 'desi' industry. However, the CEO also said India will continue to be the number one preferred location (for offshore outsourcing).

"I think we will continue to be competitive. The other positive thing which is happening is that there is an ecosystem which is being built in India for technology. And that clusters...that's being created is also going to fuel more growth and create more opportunities".

Gopalakrishnan does not buy the argument that Indian IT sector may witness slowdown after growing in a scorching pace in the recent years.
"The market opportunity is there for companies to grow....business is there for companies to grow. Nasscom continues to project that the sector would grow at 25-30 per cent in foreseeable future. So, I think the opportunity to grow continues to be there."

Given the size of the Indian IT industry today, it is in a much better position to meet the expectations, he said.

"Top tier (Indian IT) companies are much larger today. They have a global brand, global exposure, they have strong leadership, large employee pool....they are in a much better position."

To stay ahead of the race, the newly-appointed CEO said Indian IT industry needs to further enhance its value proposition, service offerings and its portfolio to meet market demand and what the customers are looking for as well as respond to changes which are happening in (market) environment and technology.

"We have to make sure that we address the talent needs of the IT industry. Definitely, we need to address the issue of an appreciating rupee", he said.


Original story

Outsourcing deal triggers Infosys up

MUMBAI: Infosys Technologies stock rallied on Thursday after the company purchased contract from Royal Philips Electronics. In a $250-million seven-year outsourcing deal, structured as an acquisition, Infosys Technologies will take on board 1,400 employe es of Royal Philips Electronics in three nations including India. At 11.50 am, the stock was up Rs 38 or 1.90 per cent at Rs 2,027 on the NSE today.

As part of the deal, Infosys BPO will provide finance and accounting (F&A) services and the processing of purchase orders to Philips.

Infosys will pay $28 million upfront to acquire the Philips' BPO assets on 'as is where is' basis in Poland, Thailand and India. Philips' shared service centre at Lodz in Poland is 780 strong, while the company has some 400 people in Chennai and 175 in B angkok.

Original story

Indian BPOs are reliable: Nilekani

Source: Hindu


(From left) Kuldeep Kumar, Professor, City University, Hong Kong; S. Krishna, Professor, Indian Institute of Management, Bangalore; Mary Ann Van Glinov, Professor, Florida International University; Nandan M. Nilekani, co-Chairman, Infosys Technologies and Deependra Moitra, management consultant, at the second international conference on globally distributed work, in Bangalore on Wednesday.

BANGALORE: Outsourcing in India is built on the foundation of commitment and reliability, and its track record is responsible for the stupendous growth of the sector, Nandan Nilekani, co-chairman, Infosys Technologies, has said.

Her was delivering the keynote address at the Second International Conference on Globally Distributed Work, organised by the Indian Institute of Management, Bangalore, here on Wednesday. Demographic changes are hugely important, he said, while highlighting the importance of the fact that the population in India is much younger, which would further power our country, especially when compared to countries in the European Union and Japan, which have ageing populations.

He also spoke of a virtual working environment and highlighted the significance of technology in communication while identifying it as an area with extreme growth potential, enough to transform the world and its economics.

The question and answer round saw a student from Annamalai University asking about the rise of the rupee and the future of the IT industry in the global market. Mr. Nilekani replied that the cost would definitely dictate the destination for future business ventures. But “that was not what I said!,” he said in reply to the student’s further query on whether this would mean a decline for the IT industry.

Infosys Buys Philips' Captive Finance BPO Operations

India's Infosys Technologies Ltd said it is buying the captive division of Royal Philips Electronics NV's finance and accounting business process outsourcing unit for 28 mln usd.

As part of the deal, Infosys will enter into a seven-year contract worth 250 mln usd with Philips to provide finance and accounts (F&A) services.

India's second-largest software exporter, which has a cash reserve of 1.6 bln usd, will buy three of Philips' service centres in India, Poland and Thailand, with about 1,400 employees. Of this, 750 employees are in Poland.

'The deal will place us among the top five players in the F&A outsourcing space globally. We want to focus on the F&A space in BPO - a growing area,' chief financial officer V Balakrishnan told Thomson Financial News.

Analysts view the transaction as positive for the company though at least one brokerage said the deal would dilute margins over the next few months.

'Infosys BPO can now expect to win 200-250 mln usd deals given its increased capacity after this acquisition. Moreover, Philip's captive unit is spread across a few countries, especially in Eastern Europe, and Infosys has been looking at a nearshore in this region,' an analyst at BRIC Securities said.

Balakrishnan said: 'Europe is an important market for Infosys and we get incrementally more growth from Europe than anywhere else.'

On recent speculation that Infosys is seeking to buy Capgemini, Balakrishnan said the company is looking at further acquisitions globally, including Germany, France and Japan.

'To sustain growth, acquisitions of this size are important. Earlier on, we saw deal sizes of 50-100 mln usd but now it is bigger in size,' ABN Amro IT analyst Pankaj Kapoor said.

An analyst from Motilal Oswal Securities said the deal is likely to be margin-dilutive in the next few months, and is similar to rival Tata Consultancy Services's purchase of UK's Pearl Group insurers.

The Mumbai-based brokerage said the transaction signifies that Infosys has changed its traditional attitude towards acquisitions.

Another analyst said the deal would add only 50 paise to Infosys' full-year per-share earnings.

This is only the second acquisition in Infosys' 25-year history, after its 2003 purchase of Australia-based Expert Information Services Pty Ltd for 22.9 mln usd.

Infosys' BPO unit, formerly Progeon, currently has about 11,000 employees providing the company with round-the-clock processing. It had revenues of 2.0 bln rupees for the first quarter, contributing about 5 pct to the company's total revenue of 37.7 bln rupees during the period.

Infosys shares closed at 1,990.15 Indian rupees on the Bombay Stock Exchange, up 0.69 pct.

Infosys looking at acquisitions in all geographies: CEO


Ramnath Shenoy
Bangalore, Jul 25 (PTI) IT major Infosys Technologies Ltd is scouting for acquisitions in "all geographies" to expand its overseas footprint, the company's Chief Executive Officer and Managing Director S Gopalakrishnan said.

Gopalakrishnan said it has started investing in Japan, China, Europe, Australia and the US in order to fill gaps in their services offerings.

"We look at acquisitions to fill gaps in our services as well as accelerate our growth in certain geographies where we have less presence today", Gopalakrishnan told PTI here.

"And if you are looking at where we are investing today...Japan, China, Europe, Australia and even in the US to fill the gaps in our services. In that sense, we are looking at all geographies (for acquisitions)", he said.

"There is always something being evaluated (potential acquisitions)", Gopalakrishnan said.

The NASDAQ-listed firm had cash and cash equivalents of USD 1.6 billion (Rs 6,442 crore) as on June 30 this year.

Speaking on his role as CEO, Gopalakrishnan said stepping into the shoes of N R Narayana Murthy and Nandan M Nilekani who held the post earlier is challenging as the company has been successful under their leadership, and (now) there is a lot of expectation about where it is going.

The company today is operating in an environment which is changing, he said. PTI

Tuesday, July 24, 2007

Infosys outlook upped to positive on conservative financial policy - S&P

MUMBAI, Jul. 24, 2007 (AFX International Focus) -- Standard & Poor's (NYSE:MHP) Ratings Services revised its outlook on the corporate credit rating on Infosys Technologies Ltd (NASDAQ:INFY) to positive from stable.

At the same time, S&P affirmed the Indian information technology major's 'BBB' rating.

'The corporate credit rating reflects the conservative financial policy and profile of Infosys, where the company remains debt-free as at March 31 2007,' said S&P's credit analyst Wee Lee Cheng.

'The company also continues to improve its business and customer diversity in North America and Europe. In addition, Infosys has been increasing its new services... while maintaining its basic development and maintenance services base,' Wee Lee Cheng added.

This strong revenue growth is also supported by the company's superior and improving cost efficiency where it still manages an efficient cost structure and high quality workforce in an industry where there is continuing staff attrition and wage inflation, S&P added.

However, the above strengths are partly balanced by the company's continual investment in high capital expenditure and training. In addition, Infosys operates in a highly cyclical and competitive IT services industry where it faces constraints in its India-based operations and visa restrictions for some overseas markets for its on-site work, S&P said.

Moreover Infosys is also exposed to foreign exchange fluctuations where 95 pct of its revenue is from overseas contracts in US dollars and the euro, while its operating expenses are largely denominated in local currency.

The rating on Infosys is likely to be raised if there is further significant diversity in geographic, customer, industry or product services offerings while maintaining operating margins above 25 pct with modest financial risk profile and high liquidity position.


Copyright AFX News Limited 2007. All rights reserved.

The copying, republication or redistribution of AFX News Content, including by framing or similar means, is expressly prohibited without the prior written consent of AFX News.

US IT spend to rise, Indian cos say amen

MUMBAI: IT investment and spending is set to rise in the US, according to a forecast by Forrester Research. This may be good news for Indian vendors hurt by the rising rupee and worries of troubles in the sub-prime lending space spilling over into other areas.

“With a moderate tech investment slowdown mostly behind us, the tech sector should experience improving prospects in the second half of 2007. We expect that the next wave of technology innovation and investment will kickstart in 2008. The steady improvement in tech investment in the third and fourth quarters of 2007 will set the stage for an even better 2008,” the report by analyst, Andrew Bartels, and his colleagues said.

The US has been witnessing a slowdown in spending on computer and communications and to a lesser extent in areas such as IT services and outsourcing. The demand environment for Indian IT firms, however, has been strong and this was re-affirmed in the current quarter where the tech leaders posted strong growth from the North America region.

For Infosys Technologies, North America revenues were at 62.6 per cent of its total revenues, unchanged from the previous quarter, and for Tata Consultancy Services up from 51 per cent to 61 per cent. Even smaller players, such as Tech Mahindra, with British Telecom as it largest client, maintained US revenues at 19 per cent of total revenues, unchanged from the previous quarter even as its revenues grew.

“As has been true for the past two to three years, the Indian vendors of Infosys, Tata Consultancy Services (TCS), and Wipro outpaced the rest of the industry,” the Forrester analysts noted.

Sector-wise, in the first quarter of 2007, the computers and peripherals saw a fall in demand, while growth in communication equipment was flat. Software witnessed as healthy demand of 11 per cent, while services saw a 6 per cent growth.

As the slowdown tapers off, Forrester predicts that IT services spends in the US will grow by 8 per cent in the second quarter, as will spends on computers and peripherals. Software and communications equipment are predicted to grow 10 per cent and 9 per cent respectively. However, the analysts did not totally rule out the possibility of a recession threat.

“The depressing effects over time of a slumping housing market on consumer spending could turn out to be greater than they have been so far. A spike in oil prices could drive gasoline and heating oil prices back to the peaks of 2006,” the report said.

Infosys BPO launches `Project Genesis' in Orissa

Bhubaneswar: Infosys BPO, the business process outsourcing subsidiary of Infosys Technologies, launched its `Project Genesis' here on Monday.

The project aims to strengthen the industry-academia relationship and create a strong foundation for the emerging knowledge economy of the country.


It proactively reaches out to the various sections of the society to enhance talent where potential exists and provide employability to the best available talent.

Orissa Chief Minister Naveen Patnaik attended the launching ceremony. Infosys was represented by Mohandas Pai, Chairman of Infosys BPO.

The first phase of the project is the Train and the Trainer (TTT) program for lecturers on the Global Skills Enhancement (GSE) curriculum.

The TTT program equips lecturers to help their students acquire industry relevant skill sets and serves as an eye-opener for the teaching fraternity on the current training trends of the BPO industry.

"The training methodology is learner-centric experimental learning. Thus, trained and certified lecturers further train their graduates on the GSE curriculum," according to the company.

Since October 2005, Infosys BPO has worked with more than 1000 lecturers in 360 colleges, training over 12000 students across the states of Karnataka, Maharashtra and Rajasthan.

In 2007, Project Genesis is being initiated in Orissa, Andhra Pradesh and Tamil Nadu.

Among others who attended the inaugural ceremony include State Higher Education Minister Samir Dey, IT Minister Surjya Narayan Patro and Director of Utkal University's Directorate of Distance and Continuing Education S. P. Pani.

Soon Pune gonna overtake B'lore

BANGALORE: The biggest work campus of tech giants Infosys and Wipro will soon be outside Bangalore, their home turf. Pune is set to overtake Bangalore as the largest single unit campus (SUC) for Infosys by 2008-end, while in the case of Wipro, it is Pune, Chennai or Hyderabad that may eclipse the headquarters in the next 2-3 years. Already, 70 per cent Wipro’s employee billings are outside of Bangalore.

The latest infrastructure data from Infosys shows that as of June 30, 2007, the company is looking at adding about 34,049 seats across a built-up area of 10.56 million sq ft in India and Mauritius in the near future. Out of this, 14,400 seats are based in Pune with a proposed built-up area of 2.7 million sq ft.

With current capacity in Pune being 9,181 seats in a built-up area of 1.4 million sq ft, total capacity in Pune by end of 2008 will be about 23,581 seats. While in Bangalore, the company has 20,715 seats currently, it plans to add another 2,330 seats in the same timeframe. This puts total seat capacity in Infy’s headquarters at 23,045 seats, marginally less than Pune.

Stating that the Pune centre will see expansion completed by end of this fiscal or latest by next, Infosys director-HRD T V Mohandas Pai said: “The procedural delays, especially in acquiring land, have forced us to look at other centres where the governments are more proactive like in Maharasthra and Rajasthan.’’

Wipro executive vice president-HR Pratik Kumar agrees, saying that the reason why Wipro is looking at other centres is ‘space constraint’. “We have got zero expansion capacity in Bangalore, what choices do we have,” he asks, adding “I believe the city still has the best talent but there is no space.”

Wipro employs between 15,000 and 17,000 people in India’s tech capital, which accounts for 21-24 per cent of total employee strength of 71,137. But, according to Mr Kumar, “For the last five quarters, almost 70 per cent of our billing growth has come from outside Bangalore.”

He said, “We will continue to expand wherever there is availability of infrastructure and land.” However, Bangalore will remain its biggest campus at least in the near term, he said, though the scenario will change in three years.

However, Karnataka IT secretary M N Vidyashankar said, “There is more demand for developed space in Bangalore which is available in plenty. However if the firm wants to build a single unit complex (SUC), then they need land in hundreds. If there is demand, then we can acquire land for them.”

Procedural delays in land acquisition has been a major grouse of the IT industry in Bangalore. And expansion into other cities has become passe but having another centre overtake its headquarters in terms of headcount and capacity is the surprise. Mr Pai adds, “The IT industry in Bangalore adds about a lakh jobs per year. Even with a bit of delay, the state tends to lose about 25,000 jobs in a quarter.’’

Exodus: Top four IT players lose 10K employees in Q1

New Delhi: Indian IT companies, grappling with an appreciating rupee eating into their profits, are also finding it hard to retain employees with the top-four firms - TCS, Infosys, Wipro and Satyam - witnessing an exodus of about 10,000 people in the first quarter.

Although, all the four firms collectively hired more than 25,000 employees in the April-June period, the net addition was just about 16,300 - taking their total headcount to 2,85,357 employees.

Except for Satyam Computers, attrition rate went higher at Infosys, Tata Consultancy Service and Wipro from both the previous quarter as well as the year-ago period.

All the four companies reported an adverse impact of rupee rise on their profitability and margins, and are looking at various hedging measures, which include improving employee utilisation rates.

However, analysts believe the high attrition rates, mostly triggered by employees seeking higher salaries, could adversely impact the companies' plans to improve utilisation rates.

TCS, the biggest in terms of revenue as well as headcount, saw an exodus of about 2,500 employees, while just over 2,000 people quit the country's second largest software exporter, Infosys.

The employee loss is estimated to be much higher at about 3,500 at Wipro, the country's third-biggest IT firm, while Satyam, the smallest of the four, saw the lowest number -- about 1,600 people -- leaving.

Interestingly, April-June quarter is the period when most of the software firms implement annual wage hikes and see a sharp surge in new hirings.

TCS, Infosys, Wipro and Satyam had net additions of 5,512, 3,730, 4,319 and 2,716 employees respectively in the quarter.
TCS reported an attrition rate of 11.5 per cent, up from 10.6 per cent a year ago and 11.3 per cent in the previous quarter, while it stood at 13.7 per cent for Infosys, unchanged from the previous quarter but higher than 11.9 per cent in the April-June period last year.

Satyam saw its attrition rate falling to 14.9 per cent from 15.7 per cent in the January-March period this year and 19.2 per cent in the year-ago period, where as Wipro witnessed a sharp surge to 20 per cent from 17 per cent in the previous quarter and 15 per cent in the year-ago quarter.

Wipro says its high attrition rate was driven by various factors such as seasonality and a spike in the number of employees
going for higher studies during the quarter, as well as the company's practise of implementing annual wage hikes in the third quarter.

The annual hikes are fully reflected in first quarter results of Infosys and TCS, while some of the other front line IT firms do the same either in the second quarter or spread it over a number of quarters.

"This year, in particular, we have seen a spike in the percentage of people who have gone for higher studies, which is not very uncommon to see in quarter one, because all admissions open up around this time," Wipro Corporate Vice President (Human Resource) Pratik Kumar told analysts in a conference call to discuss the company's quarterly results.

However, Wipro is anticipating a decline in attrition going forward as the company has decided to advance annual wage hikes to August, while it does not expect people leaving for higher education to be a factor.

"We have been effecting our offshore salary increases in the beginning of third quarter, unlike some of the industry peers who do it at the start of the financial year. This used to expose us and, to an extent, we used to be vulnerable on that count," Kumar added.

Infosys' Director Human Resources Mohandas Pai said exodus has somewhat stabilised at the company in the past one year, after taking into consideration the 1.5 per cent involuntary attrition at the fresher level.

Pai said this accounted for people who joined at the fresher level but did not complete the training after failing the qualifying test.

"Second quarter of last year we had 2,040 people leave us, third quarter 2,040 and the fourth quarter it came down to 1,640 because of seasonalities. And this quarter it is 2,010," Pai said at a conference call on July 11 after announcing the company's first quarter results.

Wipro also recorded 1.4 per cent of forced attrition rate in the quarter. In the year-ago quarter, almost 2 percentage points of attrition was due to voluntary separation.

The company said this was partly due to a clean-up exercise on the issue of fake resumes, while some people left after being put in lower quartile performance on completion of annual appraisal cycles in the previous quarter.

Monday, July 23, 2007

No cap on private sector salaries: FM

MUMBAI: Setting at rest speculation that the government may put a cap on salaries for India Inc, Union Finance Minister P Chidamabaram has said there cannot be any legislation on pay packets nor was it desirable.
The government does not legislate on salaries and government ought not, he said here, replying to a question raised by a Mumbai university research student on whether low remuneration was acting as a disincentive to attract researchers.
Government salaries were no doubt poor as compared to market salaries. In fact, government salaries no where in the world match private sector except in Singapore, Chidambaram said during an interactive session with students on Friday.
I do not think there is any comparison between government salary and salary of private sector. In fact, to come into the research field it calls for certain attitude. Are you inclined towards academics and research? He asked.
Nobel laureate and renowned physicist sir C V Raman could not have been a great scientist if he had thought he should be paid like it icons Narayana Murthy and Azim Premji. Having said that I agree that compensation for teachers, professors and researchers should be considerably enhanced. When late Rajiv Gandhi was the prime minister, it was recognised through UGC that the salary of a professor should be equal to a government secretary and i believe today the professor's salary is equal to the secretary, he noted.
I also agree that you need better laboratories, libraries and access to internet (for quality research), the Finance Minister observed.

IT firms move closer to clients

With the strong rupee eating away profits, Indian IT companies are increasing their manpower count closer to client locations in order to grab projects that offer higher margins.

Recently, Infosys co-chairman Nandan Nilekani, after stepping down as CEO, said he would now be based in the USA and spend more time working out new business models, negotiating for projects with higher rates and more high-margin deals around Infosys Consulting. TCS, Wipro and Satyam Computer Services are all increasing their on-site efforts through deployment of additional manpower.

In the recently announced results, TCS global head of human resources S. Padmanabhan said the company added about 1,000 employees across all its global subsidiaries, which number about 150, and a majority of them would be groomed to be the “face of the company”.

Infosys, through its global internship programme, has trained a couple of batches of 200 workers from different countries who will be groomed to undertake different roles in their respective locales.

"Deploying manpower on on-site locations is not something new, but projects with good margins are increasingly a mix of onsite and offshore," says Ram Mynampati, board member and president, commercial and healthcare business of Satyam.

Industry experts believe that as Indian IT majors have aspirations to be global consulting companies, then it is crucial to have a diversified workforce and a lot of times with nationals who are familiar with market conditions. "Earlier, if a company outsourced work to Indian companies, it was not basic run-of-the-mill stuff. Now, as Indian companies are looking to move up the value chain, with higher billing, companies want to have a touch-point in their respective locations," says William McArter, president of Mastek's US operations.

Recently, all IT majors have offered wage hikes for employees who are deployed on-site and are asking them to service more than a single client. "Earlier, if an employee was servicing a single client, now two employees are being asked to service three clients," says Pradeep Mukerjee of Tholons, an offshore advisory firm. Analysts also see this increase in employee productivity as a move to counter international software companies such as IBM, EDS and Accenture who score higher on this front.

Q&A: 'Reservations alone can't equip students to face competition'

Infosys Technologies with the Indian Institute of Information Technology, Bangalore, has just concluded the first course of a Special Training Programme (STP) for SC, ST students aimed at enhancing their employability.

T V Mohandas Pai, director, human resources, Infosys, spoke to Dhanya Krishnakumar about the programme:


Are you looking at expanding this programme beyond Karnataka?

Ideally, there should be a similar effort in every state. Currently, we plan to conduct pilots in five other states, including Maharashtra, Rajasthan and Orissa. A successful pilot will convince state governments of its need and feasibility. In Pune, we are collaborating with the Symbiosis Institute for a pilot in September. We are talking to two other institutions and we'll finalise things soon.

How did the idea for such a programme come about?

During a meeting with Narayana Murthy, Union minister for social justice and empowerment Meira Kumar asked him to come up with a programme to empower students from the socially disadvantaged classes. We believe that reservation alone cannot equip students for a sound future. The basic premise of STP is to equip these students who have done well in their engineering courses, but lack of resources or opportunities have not been able to get access to good quality higher education.

What are the skills imparted and how are students selected?

Anybody who has finished her engineering a year or two ago and belongs to SC/ST is eligible. We worked with the department of social welfare, government of Karnataka to come up with a list of candidates who would qualify for the pilot project. The training process is similar to the one we provide to those who join Infosys. Our usual process takes about five months, but the STP course is seven months.

We also train them in personality development, confidence building, articulation and communication because often people from socially disadvantaged backgrounds suffer from low esteem and it's essential to change that. The average perfor-mance of the STP batch was comparable to a typical batch at Infosys.

What about placements post this training?

From our first batch of 90, close to 76 got placed in companies like IBM, EDS, HP, MindTree, Wipro and Infosys itself. We made 23 offers, but only 15-16 joined us which shows the power of this programme. It made them competitive enough to have choices. Placement is based purely on merit.

What's the investment in this programme?

For the pilot, we invested Rs 3 crore. Starting with the next session, we are looking at Rs 1 crore with a 50-50 partnership with the state government. The government has the funds but lacks the capability to plan and execute something like this. That's where we come in. We also got support from our partners like HP, Canara Bank and some other corporate houses.

Saturday, July 21, 2007

Rising rupee: IT, BPO employees may have to work longer

The appreciation of the Indian rupee against some currencies, especially the US dollar, has come as good news for many, but for those in the BPO and IT sector, it is means no more Saturday night partying.

Several IT and BPO firms in Bangalore have decided that their employees will have to work on Saturdays too in order to counter the negative impact of the appreciating rupee.

While IT firms are toying with the idea of working on Saturdays, those working in the business process outsourcing sector may have to put in an hour extra everyday at work.

The BPO firms work all seven days of the week. On an average, BPO employees put in 40 hours every week. However, now with revised working hours, an employee would have to put in 50 hours a week.

Whether the employees would start the shift early or end late has not yet been decided.

BPO employees are, however, not happy with the idea and say that this will only add to work pressure. They argue that this move is unfair as they were not allowed to relax when the rupee was not so strong.

Says Santhosh Sharma, a BPO employee, "It seems as though we would have to put in extra working hours at the end of the shift as starting early will make no sense."

The IT and BPO sector, however, says that this is inevitable and employees will have no choice to put in extra working hours. Infosys Technologies' [Get Quote] chief mentor N R Narayana Murthy said that the currency changes are beyond the control of the IT industry and the industry has to look at ways to increase productivity.

A source said that most IT and BPO firms are in discussion with their clients to rework billing rates. This would have to be reworked to accommodate every extra hour put in by the service provider.

Sharat Kapadia, an IT consultant, said that currently there are five working days for the employees in the IT sector. However, now that could change. Employees may have to work at least 10 hours on weekdays and six hours on Saturdays.

The employees will surely be paid extra, he added.

Life lessons from Narayana Murthy








N R Narayana Murthy, chief mentor and chairman of the board, Infosys Technologies, delivered a pre-commencement lecture at the New York University (Stern School of Business) on May 9. It is a scintillating speech, Murthy speaks about the lessons he learnt from his life and career. We present it for our readers:

Dean Cooley, faculty, staff, distinguished guests, and, most importantly, the graduating class of 2007, it is a great privilege to speak at your commencement ceremonies.

I thank Dean Cooley and Prof Marti Subrahmanyam for their kind invitation. I am exhilarated to be part of such a joyous occasion. Congratulations to you, the class of 2007, on completing an important milestone in your life journey.

After some thought, I have decided to share with you some of my life lessons. I learned these lessons in the context of my early career struggles, a life lived under the influence of sometimes unplanned events which were the crucibles that tempered my character and reshaped my future.

I would like first to share some of these key life events with you, in the hope that these may help you understand my struggles and how chance events and unplanned encounters with influential persons shaped my life and career.

Later, I will share the deeper life lessons that I have learned. My sincere hope is that this sharing will help you see your own trials and tribulations for the hidden blessings they can be.

The first event occurred when I was a graduate student in Control Theory at IIT, Kanpur, in India. At breakfast on a bright Sunday morning in 1968, I had a chance encounter with a famous computer scientist on sabbatical from a well-known US university.

He was discussing exciting new developments in the field of computer science with a large group of students and how such developments would alter our future. He was articulate, passionate and quite convincing. I was hooked. I went straight from breakfast to the library, read four or five papers he had suggested, and left the library determined to study computer science.

Friends, when I look back today at that pivotal meeting, I marvel at how one role model can alter for the better the future of a young student. This experience taught me that valuable advice can sometimes come from an unexpected source, and chance events can sometimes open new doors.

The next event that left an indelible mark on me occurred in 1974. The location: Nis, a border town between former Yugoslavia, now Serbia, and Bulgaria. I was hitchhiking from Paris back to Mysore, India, my home town.

By the time a kind driver dropped me at Nis railway station at 9 p.m. on a Saturday night, the restaurant was closed. So was the bank the next morning, and I could not eat because I had no local money. I slept on the railway platform until 8.30 pm in the night when the Sofia Express pulled in.

The only passengers in my compartment were a girl and a boy. I struck a conversation in French with the young girl. She talked about the travails of living in an iron curtain country, until we were roughly interrupted by some policemen who, I later gathered, were summoned by the young man who thought we were criticising the communist government of Bulgaria.

The girl was led away; my backpack and sleeping bag were confiscated. I was dragged along the platform into a small 8x8 foot room with a cold stone floor and a hole in one corner by way of toilet facilities. I was held in that bitterly cold room without food or water for over 72 hours.

I had lost all hope of ever seeing the outside world again, when the door opened. I was again dragged out unceremoniously, locked up in the guard's compartment on a departing freight train and told that I would be released 20 hours later upon reaching Istanbul. The guard's final words still ring in my ears -- "You are from a friendly country called India and that is why we are letting you go!"

The journey to Istanbul was lonely, and I was starving. This long, lonely, cold journey forced me to deeply rethink my convictions about Communism. Early on a dark Thursday morning, after being hungry for 108 hours, I was purged of any last vestiges of affinity for the Left.

I concluded that entrepreneurship, resulting in large-scale job creation, was the only viable mechanism for eradicating poverty in societies.

Deep in my heart, I always thank the Bulgarian guards for transforming me from a confused Leftist into a determined, compassionate capitalist! Inevitably, this sequence of events led to the eventual founding of Infosys in 1981.

While these first two events were rather fortuitous, the next two, both concerning the Infosys journey, were more planned and profoundly influenced my career trajectory.

On a chilly Saturday morning in winter 1990, five of the seven founders of Infosys met in our small office in a leafy Bangalore suburb. The decision at hand was the possible sale of Infosys for the enticing sum of $1 million. After nine years of toil in the then business-unfriendly India, we were quite happy at the prospect of seeing at least some money.

I let my younger colleagues talk about their future plans. Discussions about the travails of our journey thus far and our future challenges went on for about four hours. I had not yet spoken a word.

Finally, it was my turn. I spoke about our journey from a small Mumbai apartment in 1981 that had been beset with many challenges, but also of how I believed we were at the darkest hour before the dawn. I then took an audacious step. If they were all bent upon selling the company, I said, I would buy out all my colleagues, though I did not have a cent in my pocket.

There was a stunned silence in the room. My colleagues wondered aloud about my foolhardiness. But I remained silent. However, after an hour of my arguments, my colleagues changed their minds to my way of thinking. I urged them that if we wanted to create a great company, we should be optimistic and confident. They have more than lived up to their promise of that day.

In the seventeen years since that day, Infosys has grown to revenues in excess of $3.0 billion, a net income of more than $800 million and a market capitalisation of more than $28 billion, 28,000 times richer than the offer of $1 million on that day.

In the process, Infosys has created more than 70,000 well-paying jobs, 2,000-plus dollar-millionaires and 20,000-plus rupee millionaires.

A final story: On a hot summer morning in 1995, a Fortune-10 corporation had sequestered all their Indian software vendors, including Infosys, in different rooms at the Taj Residency hotel in Bangalore so that the vendors could not communicate with one another. This customer's propensity for tough negotiations was well-known. Our team was very nervous.

First of all, with revenues of only around $5 million, we were minnows compared to the customer.

Second, this customer contributed fully 25% of our revenues. The loss of this business would potentially devastate our recently-listed company.

Third, the customer's negotiation style was very aggressive. The customer team would go from room to room, get the best terms out of each vendor and then pit one vendor against the other. This went on for several rounds. Our various arguments why a fair price -- one that allowed us to invest in good people, R&D, infrastructure, technology and training -- was actually in their interest failed to cut any ice with the customer.

By 5 p.m. on the last day, we had to make a decision right on the spot whether to accept the customer's terms or to walk out.

All eyes were on me as I mulled over the decision. I closed my eyes, and reflected upon our journey until then. Through many a tough call, we had always thought about the long-term interests of Infosys. I communicated clearly to the customer team that we could not accept their terms, since it could well lead us to letting them down later. But I promised a smooth, professional transition to a vendor of customer's choice.

This was a turning point for Infosys.

Subsequently, we created a Risk Mitigation Council which ensured that we would never again depend too much on any one client, technology, country, application area or key employee. The crisis was a blessing in disguise. Today, Infosys has a sound de-risking strategy that has stabilised its revenues and profits.

I want to share with you, next, the life lessons these events have taught me.

1. I will begin with the importance of learning from experience. It is less important, I believe, where you start. It is more important how and what you learn. If the quality of the learning is high, the development gradient is steep, and, given time, you can find yourself in a previously unattainable place. I believe the Infosys story is living proof of this.

Learning from experience, however, can be complicated. It can be much more difficult to learn from success than from failure. If we fail, we think carefully about the precise cause. Success can indiscriminately reinforce all our prior actions.

2. A second theme concerns the power of chance events. As I think across a wide variety of settings in my life, I am struck by the incredible role played by the interplay of chance events with intentional choices. While the turning points themselves are indeed often fortuitous, how we respond to them is anything but so. It is this very quality of how we respond systematically to chance events that is crucial.

3. Of course, the mindset one works with is also quite critical. As recent work by the psychologist, Carol Dweck, has shown, it matters greatly whether one believes in ability as inherent or that it can be developed. Put simply, the former view, a fixed mindset, creates a tendency to avoid challenges, to ignore useful negative feedback and leads such people to plateau early and not achieve their full potential.

The latter view, a growth mindset, leads to a tendency to embrace challenges, to learn from criticism and such people reach ever higher levels of achievement (Krakovsky, 2007: page 48).

4. The fourth theme is a cornerstone of the Indian spiritual tradition: self-knowledge. Indeed, the highest form of knowledge, it is said, is self-knowledge. I believe this greater awareness and knowledge of oneself is what ultimately helps develop a more grounded belief in oneself, courage, determination, and, above all, humility, all qualities which enable one to wear one's success with dignity and grace.

Based on my life experiences, I can assert that it is this belief in learning from experience, a growth mindset, the power of chance events, and self-reflection that have helped me grow to the present.

Back in the 1960s, the odds of my being in front of you today would have been zero. Yet here I stand before you! With every successive step, the odds kept changing in my favour, and it is these life lessons that made all the difference.

My young friends, I would like to end with some words of advice. Do you believe that your future is pre-ordained, and is already set? Or, do you believe that your future is yet to be written and that it will depend upon the sometimes fortuitous events?

Do you believe that these events can provide turning points to which you will respond with your energy and enthusiasm? Do you believe that you will learn from these events and that you will reflect on your setbacks? Do you believe that you will examine your successes with even greater care?

I hope you believe that the future will be shaped by several turning points with great learning opportunities. In fact, this is the path I have walked to much advantage.

A final word: When, one day, you have made your mark on the world, remember that, in the ultimate analysis, we are all mere temporary custodians of the wealth we generate, whether it be financial, intellectual, or emotional. The best use of all your wealth is to share it with those less fortunate.

I believe that we have all at some time eaten the fruit from trees that we did not plant. In the fullness of time, when it is our turn to give, it behooves us in turn to plant gardens that we may never eat the fruit of, which will largely benefit generations to come. I believe this is our sacred responsibility, one that I hope you will shoulder in time.

Thank you for your patience. Go forth and embrace your future with open arms, and pursue enthusiastically your own life journey of discovery!

Infosys to buy Philips' global finance BPO - UPDATE

BANGALORE - Infosys Technologies (nasdaq: INFY - news - people ) is set to acquire Royal Philips Electronics (other-otc: PHGZF.PK - news - people ) NV's global finance and accounts business process outsourcing unit for an assured revenue of 200 mln usd over five years, according to a report on the Business Standard website.

India's second-biggest software-maker will be taking over all the costs of this acquisition, similar to the manner in which rival Tata Consultancy Services bought the operations of UK's Pearl Group insurers, the website reported.

The acquisition will add to Infosys current BPO unit, which has close to 11,000 employees, providing the company with round-the-clock processing, the report added.

Philips has its finance and captive operations in Chennai, Warsaw and Bangkok with a total headcount of 1,500.

'We do not comment on market rumours,' said Infosys in a reply to an email.

Philips, on the other hand, said it could neither confirm nor deny the news regarding the possible takeover of its finance and accounts BPO.

It is too 'premature' for us to get into any specifics, Philips Electronics India's corporate communications director Moushumi Dutt said in response to an email asking for the company's expectations from the deal.

Infosys chief executive S Gopalakrishnan had recently said that on the BPO side, if the Indian rupee continued to appreciate the company would have to look at new markets.

He had also said: 'Any target company has to 'meet our criteria' and should want to be acquired.'

The company has a current cash reserve of 1.5 bln usd.

Infosys BPO, formerly Progeon, contributed to 36.7 pct of Infosys' quarterly revenues as on June 30.

Friday, July 20, 2007

TCS looks better than Infosys on valuation plank

One can build a case for out performance for TCS versus the rest, and not because of what they came out and said yesterday because I didn’t understand where the surprise was from TCS yesterday. The only surprise or the departure between TCS and Infosys was that Infosys gives full year guidance and TCS does not because the Infosys Q1 numbers were not bad at all, they were ahead of street expectations, they have done a reasonable job with their margins as did TCS and they did reasonable job with their topline as well. So if one compared the quarter numbers with TCS and Infosys, I think both came out with reasonable numbers, just that TCS never talks about full year numbers and Infosys came out and said they will revise their guidance downwards.

I don’t think there was any great reason for the market just on the evidence on quarterly numbers to say Infosys is bad and TCS is good. But I think there is a departure now on the valuation plank because if you just look at Infosys is trading at 24times expected even if you assume that they will do Rs 80-81 they are trading at 24 times current years earnings.

TCS assuming that they will do something between Rs 53-54 this year is trading at 21 times and that is 15% valuation gap between TCS and Infosys on similar kind of growth numbers which both are expected to clock.

So if one is comparing the two in difficult environment not knowing what the rupee will do and you still want to be in big IT, you would buy something at 21 times and not 24 times. If one is asking whether TCS has more cushion of comfort built-in, the answer is certainly yes. You can justify it at the end of year if the rupee goes really haywire, can stocks like TCS and Infosys trade at 25 times, it could at the end of the year in which case you can build a Rs 1,350 kind of scenario for TCS which is Rs 200 upside from current levels but Infosys is already there at 24 times and so even if it gets to 25, it doesn’t give you too much bank for the buck.

So relatively speaking between the two you could argue for TCS more than Infosys.

Capgemini denies consulting sale plan

PARIS: Capgemini, Europe's largest IT consultancy, said on Thursday that it was not planning to sell its IT consulting activities in financial services and retailing, denying a report in the Indian press.

In an internal note sent to staff in India and North America and obtained by Reuters, Chief Executive Paul Hermelin said "rumours had surfaced in the Indian press" that the group may consider selling these activities.

"I strongly deny this as unfounded speculation. Selling such an important activity is out of the question for the Capgemini group and has never been considered," he told staff in the note.

In April, Hermelin told Capgemini shareholders that the group's priorities were boosting profitability, expanding in Business Process Outsourcing (BPO) and integrating the purchase of Kanbay International. The purchase of Kanbay -- finalised in February - is aimed at accelerating Capgemini's growth in India and at bolstering its position in finance consulting and in North America.

Shares in Capgemini rose 4 per cent on Thursday after the Times of India reported that Indian software services exporter Infosys Technologies could strike a deal with Capgemini to acquire part of the group's consulting business.

Capgemini and Infosys had both declined to comment on the report on Thursday.

Last week Infosys, which has a market capitalisation of $27.6 billion, said speculation that it was in talks to buy certain European firms, such as Capgemini, was baseless at this point in time.

At 1318 GMT shares in Capgemini, which has a market value of $11.2 billion euros, were up 3.8 per cent at 57.03 euros, outperforming the Europea technology sector, which was up 2.04 percent. Nasdaq-listed Infosys has said it was looking for acquisitions in non-English speaking markets such as Germany, France and Japan to accelerate market penetration.

TCS, Infy, Wipro top employers in IT-ITeS

NEW DELHI: Tata Consultancy Services (TCS), Infosys Technologies and Wipro Technologies have emerged the top IT and ITeS employers in Nasscom’s top 20 employer rankings for financial year 2006-07 .

The top 20 companies collectively employ over 0.5 million people — or just over 31% — of the 1.6 million employed directly in the industry. The rankings are based on the India headcount of firms with IT-ITeS operations in India, as reported to Nasscom in its annual survey. Other companies to figure in the top ten, in the order they’re ranked, are HCL Technologies, Cognizant, Satyam, HP, Genpact, Oracle and Intelenet Global Services .

The IT-ITeS industry, the country’s largest employment generator in the organised sector, is projected to employ over 10 million people directly and indirectly by 2010, from over 7.5 million currently, according to Nasscom. The industry body has attributed the growth in employee base to factors like healthy growth environment, attractive remuneration, various employment opportunities based on varying skill sets, and availability of talent. “What we do need to work on is the quality factor to ensure we remain the highest employment generator and maintain our share of the global offshore IT and ITeS industry ,” said Nasscom president Kiran Karnik.

Tuesday, July 17, 2007

Infosys to buy Philips Global's finance BPO

Aravind Gowda, Bibhu Mishra & G Balachandar / Bangalore/Chennai July 17, 2007

IT major Infosys Technologies is set to acquire Philips Global’s finance and accounts BPO for an assured revenue of $200 million spread over five years.

Infosys will be taking over the subsidiary along with all the costs in the similar manner that TCS had acquired the operations of the Pearl Group in the UK.

According to informed sources, once the takeover is completed, Infosys will bring down costs and restructure operations to make it a paying proposition.

This will be Infosys’ second acquisition in its 25-year history, after it had acquired Expert Information Services in Australia for around Rs 104 crore ($22.9 million) in 2003.

The acquisition of Philips will bolster the capabilities and reach of Infosys’ BPO, enabling it to deliver round-the-clock. Philips’ F&A captive has operations in Chennai, Warsaw (Poland) and Bangkok. The global staff strength of the captive is around 1,500 with 500 employees working out of the Chennai centre, which was set up in 2004.

Infosys’ BPO has close to 11,000 employees and has posted a top line of around Rs 662 crore and a net profit of Rs 151 crore in FY07.

Infosys, the country’s second largest software services exporter, currently has cash reserves of $1.4 billion. No official comments were available from the company. Usually conservative in the M&A game, the company has grown to $3.5 billion and employs around 71,000 professionals.

In the recent past, it was rumoured to be bidding to acquire Capgemini. The company officials have predictably been non-committal and maintained that they will go ahead and acquire it, if it fits into the Infosys’ game-plan.

Cut red-tape for 8% growth, says Narayana Murthy

Infosys Chief Mentor NR Narayana Murthy on Friday said rupee appreciation was a macro economic issue and called upon corporates to become more efficient, productive and reduce costs.

"I am not worried about factors which are out of my control. It is a macro economic issue," he told reporters on the sidelines of the launch of the Abdul Latif Jamal Poverty Action Lab (J-Pal) in Chennai.

"We have to become more efficient, productive and reduce costs," he said. Earlier, speaking at the launch, he said the country had to go in for massive human resource development programme to eradicate poverty. Successful models should be scaled up and replicated to alleviate poverty.

India had to play a critical role in doing away with poverty. "If India can't do it, the world can't," he said adding organisations like J-Pal had tremendous responsibility on their shoulders in this regard.

He said economic reforms had created a strong middle class in the last 16 years, but there was an uneven flow of benefit and clear divide between the urban and rural economy.

Narayana Murthy, quoting a Goldman Sachs report that India can sustain eight per cent growth till 2020, said, "It will be possible only if we cut the red-tape in the country."

He called for more transparency in the public administration system. "The government should support education and healthcare and organisations like J-Pal provide transparent and efficient database on policies," he said. "Such ventures should scale up faster and should be replicated," he added.

Sunday, July 15, 2007

Infosys-enabled Etihad Airways Website A Hit In The Gulf

The website of the United Arab Emirates' (UAE) airline Etihad Airways, revamped by Infosys Technologies Ltd, has witnessed a dramatic boost in traffic, with the number of visitors increasing by almost 95 percent.

According to a statement from the Bangalore-based IT firm here Saturday, the website became a hit in the Gulf region for its customer friendliness, business strategy and design in the first 60 days of its re-launch.

'The average duration per visit on the new website has been slashed by 30 percent compared to the time spent on the old website, illustrating the simplified navigation of the new site,' Etihad e-commerce manager Tehmton Cooper said.

At the annual Pan Arab Awards event, held in Dubai early this week, Etihad bagged the best 'Online Strategy' and the 'Best International Standards Web Technology' awards for 2007.

The website was also awarded the prestigious Golden Award in the travel and tourism category.

'We engaged Infosys to re-develop our website to create a seamless experience for our customers,' Cooper said, adding that to receive so many prestigious industry awards, so soon after the site's re-launch, proved how impressive, dynamic and user-friendly the site now was as a result of its collaboration with Infosys.

Infosys also developed the multilingual capabilities of the website to increase Etihad's presence across the globe.

Jitin Goyal, sales head for EMEA, Infosys Technologies, said, 'It's an honour the new website has been well received by Etihad's customers and the industry alike. We look forward to doing more innovative and interesting projects for the Gulf airline in the near future.'

Etihad Airways is based in the UAE capital, Abu Dhabi. The airline offers flights to 43 destinations in the Middle East, Europe, North America, Africa and Asia.

No role for corporates in politics: Narayana Murthy

Press Trust of India / New Delhi July 13, 2007

Infosys Technologies' chief mentor N R Narayana Murthy today said he was not aware of his name doing the rounds for the post of Vice-President of the country.

"I am not aware of it. I have no idea about it," he said replying to a question by reporters on the sidelines of a function here.

He parried a question on the charges being levelled against the UPA candidate for the Presidential election, saying "I am not the right person to comment on it."

Earlier, speaking at the function, he said corporates should not have a role in politics. "Corporates should make themselves more relevant to their customers," he added.

When asked about rupee appreciation, he said it was a macro economic issue and called upon corporates to become more efficient, productive and reduce costs.

"I am not worried about factors which are out of my control... It is a macro economic issue," he said on the sidelines of the launch of J-Pal, which is a poverty action lab.

"We have to become more efficient, productive and reduce costs," he said.

Earlier, speaking at the launch, he said the country had to go for a massive human resource development programme to eradicate poverty. Successful models should be scaled up and replicated to alleviate poverty.

India had to play a critical role in doing away with poverty. "If India can't do it, the world can't...Organisations like J-Pal bear a tremendous responsibility," Murthy said.

He said economic reforms had created a strong middle class in the last 16 years, but there was an uneven flow of benefits and a clear divide between the urban and rural economy.

Quoting a Goldman Sachs report that India can sustain 8% growth till 2020, Murthy said: "it will be possible only if we cut the red-tape in the country."

He called for more transparency in the public administration system. "The government should support education and healthcare and organisations like J-Pal provide transparent and efficient database on policies," he said.

"Such ventures should scale up faster and should be replicated," Murthy added.

Worry about efficiency, not currency: Narayana Murthy

Chennai: “Why should we (the industry) worry about things that are not in our control? We need to worry about matters we can control such as how to become more relevant to the customer and improving work efficiency,” N.R. Narayana Murthy, Founder, Chairman of the board and Chief Mentor, Infosys, told press persons in response to whether the strong rupee meant the IT, ITES, BPO industry would have to reconcile to lower margins in future.

Instead of worrying over currency movement companies needed to improve their efficiency by reducing administrative red tape and adding more value to clients, he said. When asked if the industry should seek any Government intervention such as sops or other favourable measures to reduce the impact of the rising rupee value against the dollar, Murthy said he was personally never in favour of any sops or concessions from the Government.

Earlier today he addressed a gathering from the Abdul Latif Jameel Poverty Action Lab (J-PAL) and the Institute for Financial Management and Research (IFMR) on ways to eradicate poverty.

Income is the least of worries for poor people. They want opportunities for their children to participate in economic progress, Murthy said quoting a World Bank report.

India has about 300 million unemployed youth and if a third of them could earn about $600 (about Rs 25,000) a year, it would result in about $60 billion being added each year to the country’s GDP, he said. He stressed the Government and industry to jointly create opportunities to employ such youth.

J-PAL and IFMR have set up centre at IFMR funded by a grant from the Mulago Foundation. The Centre will work to improve the effectiveness of poverty alleviation programmes by providing policy makers with scientific results to help shape relevant policies.

J-PAL has been working with NGOs and the Indian Government for a decade

It is currently involved in the ‘Balsakhi’ programme that provides remedial education to children lagging behind in school.

Indian outsourcing sector focuses on efficiency and productivity

Indian outsourcing sector is faced with the biggest challenge ever. The rising Rupee against dollar makes it impossible to compete with cheap labor. The wages are rising fast in India. The dollar is getting cheaper even faster than that against Indian Rupee.

The outsourcing industry in India is fighting back tooth and nail. They are focusing on getting the same work done with less number of people. Productivity and efficiency have to chip in here, says some of Indian outsourcing managers.

Infosys chief mentor N R Narayana Murthy on Friday said rupee appreciation was a macro- economic issue and called upon corporates to become more efficient, productive and reduce costs.

"I am not worried about factors which are out of my control..it is a macro-economic issue," he told reporters on the sidelines of the launch of the Abdul Latif Jamal Poverty Action Lab (J-Pal) here.

"We have to become more efficient, productive and reduce costs," he said.

The only issue the Government of India has to worry about is that it can result is massive layoffs and very high unemployment among the people employed in the outsourcing sector.

Re-bitten Infy looking at rising India

12 Jul, 2007, 0341 hrs IST,Shelley Singh & N Shivapriya, TNN

NEW DELHI/MUMBAI: In a major departure from its earlier stance of not doing any domestic IT services work, technology leader Infosys Technologies said it would bid for projects in the domestic market on a case-to-case basis. "We will take that decision on a case-by-case basis, depending on the size of the deal, the value proposition and the kind of services," Infosys chief operating officer SD Shibulal told ET in an exclusive interview after its first quarter results.

So far Infosys has been in the Indian market only for its core banking product, Finnacle, and former CEO Nandan Nilekani, had stated as recently as April 2007 that the decision to stay focused on the high margin international software business was strategic one it planned to continue with. Among the reasons the company had cited for not entering domestic market was robust global demand for IT services and the not very attractive margins for Indian IT services. The taxes on domestic IT revenue were perceived as an additional disincentive.

The company's changed stance comes at a time when the rupee appreciation has dented its June 2007 quarter profitability and operating margins have fallen by 300 basis points. It's also a recognition of the growing clout of the Indian market that could be much bigger in the future.

"Systems integration, package implementation, consulting are some of the areas we will look at," said Mr Shibulal. Apart from the rupee appreciation that has impacted the topline to the extent of Rs 287 crore, visa costs and increased salaries have contributed to 7.3% sequential rise in expenditure. While visa costs are non-recurring, the company will feel the heat of the higher wage bill even in the coming quarters. "The first quarter of the fiscal, companies typically take a hit because of the salary hikes and visa costs," said Harit Shah, an analyst with Angel Broking.

However, Infosys has managed to show a 1% increase in revenue productivity in the June 2007 quarter and Mr Shibulal said the company would manage its portfolio of services and leverage services such as package implementation, testing and consulting that command higher rates. Interestingly, the company's consulting business has shown a substantial growth, increasing to 4.9% of its revenues or Rs 184 crore in the June 2007 quarter from 4.3% of its revenues in the March 2007 quarter.

The company doubled (from four to eight), the number of its $80 million dollar clients from the last quarter to the June 2007 quarter, Mr Shibulal said. One of the consulting deals it has won is an assignment from an audit firm for transforming its audit managing process, he said, declining to reveal its value.

The biggest hit the company has taken in the June 2007 quarter is on the BPO business. Here the margins have eroded from 21-22% to 16-17%. Because the BPO business is by definition almost entirely offshore, the impact of the rupee appreciation is felt most on this business. "Because the BPO is also a new business, re-negotiation for many of the contracts has not even started. But even here the new contracts we are signing have an upward bias," said Mr Shibulal. The company is also trying to add value to BPO clients by better value extraction, getting into knowledge management services and get benefits of scale.

In the IT business, newer contracts and existing contracts coming up for renewal are getting higher billing rates, which factor the stronger rupee.

Friday, July 13, 2007

Infosys: Is the worst over?

Big day for Infosys tomorrow. The Tech bellwether will announce its financial results. We delve why these may not be the best of times for Infy.

The rupee rose more than 6 percent; salaries swelled and so did visa costs. All that's expected to show on the tech company earnings in the June quarter. Infosys might report a net profit fall from the previous quarter and it might even miss its first quarter earnings per share or EPS guidance.

Bhavin Shah, JP Morgan, said, "The EPS will come in 5-7 percent below guidance in our view; they might even revise dollar guidance up but re guidance could be revised down in revenue terms by 1%, the EPs guidance by 3% so 17-19% so EPS guidance of below 80/share."

But will the earnings revision have an adverse impact on the stock? Most brokers feel the worst is over for the sector as it enters the strongest period of the year, though some feel Infosys will stick to its 80-rupee EPS guidance.

Sanju Verma, HDFC Securities, believes, "What a lot of people are accounting is the fact that the billing growth rate year on year is likely to be 5% odd and the utilization rate, the more imp parameter is likely to see a 2% growth and i think if they both come on track it will be a huge positive"

The consensus on the street is the worst is over. But if the Infosys management says it's confident of holding on to its original EPS guidance for this fiscal the sector could see a re-rating.

Global Infosys award coming

BANGALORE: Infosys Technologies will set up a global annual award for computing excellence with a cash prize of $150,000.

The award, proposed to be instituted through the Association for Computing Machinery (ACM), will dwarf the Turing Award, the existing highest recognition for computing in the world and referred to by some as the Nobel Prize for excellence in computing and technical research.

Infosys will offer a corpus of $4 million to ACM, the New York-based non-profit organisation of computing experts, researchers, scientists, innovators and educators. The award will be given out of the interest earned from the fund. The recognition, to be called Infosys Award, will be conferred on the global winner every year in Bangalore. Infosys declined to comment.

The Turing Award, funded by Intel Corporation, carries a cash prize of $100,000. Sources say with Infosys funding an award with a bigger cash bag, Intel may increase its funding so that ACM would be able to match the prize money of the Turing Award to that of the proposed Infosys Award.

"ACM will then have two prestigious global awards with prize money of $150,000 each to honour excellence in computing, research and technical innovations," said a source. For Infosys, the award is expected to help in brand building in the world of computing.

ACM instituted the Turing Award in 1947 in honour of Alan Mathison Turing, the British mathematician who contributed the mathematical foundation and limits of computing. Dabbala Rajagopal "Raj Reddy", a renowned researcher in artificial intelligence and robotics from Katoor in TN, is the only Indian to receive the Turing Award. Raj Reddy was the head of the Robotics and Artificial Intelligence Lab in Carnegie Mellon University, US.