european markets b. g. srinivas vice president and head – european practice b. g. srinivas vice...

European marketsEuropean marketsB. G. Srinivas

Vice President and Head – European PracticeB. G. Srinivas

Vice President and Head – European Practice

© Infosys Technologies Limited 2004-2005 Analyst Meet 2004 | New Game. New Rules.

Safe HarborSafe Harbor

Certain statements made in this Analyst Meet concerning our future growth prospects are forward-looking statements, which involve a number of risks and uncertainties that could cause actual results to differ materially from those in such forward-looking statements. The risks and uncertainties relating to these statements include, but are not limited to, risks and uncertainties regarding fluctuations in earnings, our ability to manage growth, intense competition in IT services including those factors which may affect our cost advantage, wage increases in India, our ability to attract and retain highly skilled professionals, time and cost overruns on fixed-price, fixed-time frame contracts, client concentration, restrictions on immigration, industry segment concentration, our ability to manage our international operations, reduced demand for technology in our key focus areas, disruptions in telecommunication networks or system failures, our ability to successfully complete and integrate potential acquisitions, liability for damages on our service contracts, the success of the companies in which Infosys has made strategic investments, withdrawal of governmental fiscal incentives, political instability and regional conflicts, legal restrictions on raising capital or acquiring companies outside India, and unauthorized use of our intellectual property and general economic conditions affecting our industry. Additional risks that could affect our future operating results are more fully described in our United States Securities and Exchange Commission filings including our Annual Report on Form 20-F for the fiscal year ended March 31, 2004 and quarterly report on Form 6-K for the quarter ended June 30, 2004. These filings are available at www.sec.gov. Infosys may, from time to time, make additional written and oral forward-looking statements, including statements contained in the company's filings with the Securities and Exchange Commission and our reports to shareholders. The company does not undertake to update any forward-looking statements that may be made from time to time by or on behalf of the company.

Slide 2


AgendaAgenda

» Infosys in Europe

» A brief historical perspective on Europe

» The Market Place

» Market overview - the fastest growing segments

» Market characteristics

» What Sells

» A profile of services

» Strategy for growth

» Core principles for the next phase of growth

Slide 3


Europe : A key engine of growth for InfosysEurope : A key engine of growth for Infosys

» Infosys serves Europe clients in all verticals – BFSI, Telecom, Manufacturing, Retail and Others

1130

78

108

133

204

238

9%

15%

19%18%

21%19%19%

0

50

100

150

200

250

FY 99 FY 00 FY 01 FY 02 FY 03 FY 04 LTM June04

Year

Re

ve

nu

es

($

m)

0%

5%

10%

15%

20%

25%

% o

f In

fos

ys

' re

ve

nu

es

CAGR = 80%

CAGR = 80%

Slide 4


Infosys Europe : a historical perspectiveInfosys Europe : a historical perspective

UK was the firstInfosys office inEurope

UK Office

France Office

Germany Office

Benelux Office

Nordic Office

Opened in 1996

Opened in1999

2001 Paris office established

1999 - Belgium

2001 - Office in Sweden

Swiss Office 2002 - Office opened in Zurich

Grow

th

Continuous investment in Europe has led to accelerated growth

Slide 5


Local presence in EuropeLocal presence in Europe

» Service capability in 14 countries» Belgium, Czech Republic, Denmark,

Finland, France, Germany, Ireland, Italy, Netherlands, Norway, Spain, Sweden, Switzerland and UK

» Serviced by 9 sales offices and one Development Centre

» Amsterdam (Netherlands)» Brussels (Belgium)» Milano (Italy) » London (UK) – HQ & Development

Centre» Frankfurt (Germany)» Stuttgart (Germany)» Paris (France)» Stockholm (Sweden) » Zurich (Switzerland)

» Strategy of direct marketing through dedicated offices and local presence, delivers growth and differentiation

Slide 6


AgendaAgenda



» The Market Place



» What Sells




Slide 7


European IT services market – considerable room for growthEuropean IT services market – considerable room for growth

TPI reports a surge in outsourcing deals signed in H1 04 as compared to H2 03

1910 124

44

32

23

1910 124

44

34

24

1911 134

48

36

27

20

11 144

51

39

31

20

12 155

55

42

34

0

20

40

60

80

100

120

140

160

180

200

2001 2002 2003 2004 2005

Europe IT Services-Segment ($ Bn)

Biz ProcessMgt

ITManagement

Development& Integration

Education &Training

Consulting

SoftwareMaintenance

HardwareMaintenance

144147

158171

183

Source: Gartner

Slide 8


European IT services market by geography (Year 2005)European IT services market by geography (Year 2005)

48

34

27

1713

85 5

26

0

5

10

15

20

25

30

35

40

45

50IT

Sp

end

ing

($b

n)

UK

Ger

man

y

Fran

ce

Italy

Net

herla

nds

Sw

eden

Bel

gium

Sw

itzer

land

Oth

er

Source: Gartner

Slide 9


Our approach to EuropeOur approach to Europe

Today’s challenges

» Distinct streams of consumer behaviour across Europe

» Europe is highly regulated

» Cost is not the only driver for outsourcing in Europe

» The shift towards global sourcing presents a significant challenge in Europe

» Outsourcing is frequently associated with staff augmentation in Europe

Infosys’ Differentiators» Increased local presence, hiring local

talent, developing language skills, near-shore development centres

» Strict compliance with regulatory terms, proactive work with government bodies

» Providing a flexible, modular, value driven proposition, tailoring our services to European clients

» Providing an innovative modular sourcing solution, combined with proactive human resource re-deployment approach

» Infosys has shifted the paradigm in the market place away from “body-shopping” towards a more mature, managed services approach

Slide 10


AgendaAgenda



» The Market Place



» What Sells




Slide 11


A full spectrum of services for European clientsA full spectrum of services for European clients

Infosys Europe has matured its service offering to provide the full spectrum of capabilities to European clients

Enterprise Application Integration

Strategy & IT Consulting

Systems Integration

IT Outsourcing

Re-engineering and Maintenance

EnterpriseArchitecture

Definition

BusinessProcess

Reengineeringe-Businesse-Business

IntegratedRoadmap

m-Businessm-Business

Package Evaluation & Implementation

Custom Application Development

CRMCRM SCMSCM ERPERP E-ProcurementE-Procurement

DesignDesign DevelopDevelop TestTest DeployDeploy

Industry Specific Processes Cross-industry Processes

TOTAL

OUTSOURCING

SOLUTION

Business Process ManagementProgeon Ltd. – An Infosys subsidiary

Slide 12


Delivering tangible value to clients in RetailDelivering tangible value to clients in Retail

Challenge» A leading food and grocery retailer needed to transition the maintenance and

support of over 100 applications from several other IT vendors» Many of the applications were business critical» Had to be achieved in under 6 months, and without any impact on the service

levels to the end users

Solution» Infosys deployed tried and trusted transition methodologies» Providing 24 x 7 Production support, Maintenance, Enhancements and Bug

fixes, System Testing, Regression Testing, Performance Testing, Support for Integration Testing and Support for Production Implementation

Benefit» Improved service levels, with ‘Priority 1’ response time as low as 15 min» Freeing up key resources within the client, redeployed for business initiatives» Approximate saving of ₤ 1.9 m per annum» Flexibility to cope with fluctuating requirements at short notice

Slide 13


Delivering tangible value to clients in Financial ServicesDelivering tangible value to clients in Financial Services

Challenge» One of Europe’s largest Financial Services organizations» Retain and expand the customer base whilst continuously improving the quality

of service» Needed to improve the cost-to-income ratio

Solution» Engaged in application development/enhancement of core banking systems,

cards, payments and other retail systems, leveraging expertise in other areas like infrastructure management, business consulting and IT process consulting

» Working with the bank to help meet regulatory requirements including CP186 and Basel II compliance

Benefit» Delivered systems that enabled the bank to launch an offset banking product in

time to remain competitive in the market» Predictable delivery - 100% milestone adherence, zero budget variance» Cost benefits of up to 60% as compared to internal development

Slide 14


Delivering tangible value to Automotive clientsDelivering tangible value to Automotive clients

Challenge» A leading automobile manufacturer» Needed to extend its application support capability to encompass

diverse technologies for Sales and Marketing, Manufacturing and Dealers

» Includes highly critical and complex plant floor applications

Solution» Infosys leveraged its experience in manufacturing and sales

environment to provide an improved support service» Carried out system enhancements where necessary

Benefit» Upgraded service to be available 24 X 7» Cost savings to date of over € 460,000

Slide 15


Delivering tangible value to clients in TelecomDelivering tangible value to clients in TelecomChallenge» A telecommunication company based in Europe, providing telephony, internet

and television services» In a highly competitive environment, the client wanted to improve back-end

systems to deliver competitive advantages and efficiency gains

Solution» Deployed web based operations support system, linked to online provisioning

and real-time technician allocation» Infosys handles maintenance, help desk, development, re-engineering and

package implementation work for the customer

Benefit» Reduced bad debt rate, improved collection process and eliminated data entry

of 100 paper contracts per day on an average» Online provisioning and real-time technician allocation reduced cycle time from

3-5 days to a few minutes» Automated back-office operations has enabled the customer to re-deploy nearly

10% of its resources to serve its expansion plans

Slide 16


AgendaAgenda



» The Market Place



» What Sells




Slide 17


Core principle 1 - Structured solutions approachCore principle 1 - Structured solutions approach

» Europe is a highly fragmented market. Legislation, changes in market dynamics and political change are pushing European companies to reduce fragmentation

» Strong pace of change makes Europe an ideal place to develop solutions

» There are some specific opportunities within Europe that Infosys has identified, built solutions for and successfully marketed.

» Solutions are being developed for horizontal & vertical market segments» In Financial Services

» Financial messaging

» Compliance – e.g. Basel II

» In Retail» RFID

» Distributed Order Management

» Lead Time Optimisation

» Across sectors, Infosys is developing solutions to deploy, migrate and integrate between technologies and versions of technologies

Slide 18


Core principle 2 - Deeper, targeted Alliance partnershipsCore principle 2 - Deeper, targeted Alliance partnerships

» Infosys Europe is deriving growth and differentiation through strategic relationships with key partners such as Microsoft, SAP, Informatica, Oracle and Yantra

» Joint business planning and joint go-to-market strategies with key alliance partners is resulting in rapid scaling and rapid result

» Joint solution development bring rapid benefits to clients from our solution delivery capabilities and our alliance partners’ technology solutions

» Treating alliance partners like we treat clients brings differentiation through jointly planning targets and replicating well honed skills

Slide 19


Core principle 3 - Strengthened focus on key verticalsCore principle 3 - Strengthened focus on key verticals

» Infosys has developed additional capabilities for distinct markets such as the Automotive and Telecommunications sectors

» Infosys has been able to penetrate into these sectors by developing the required specialist skill sets and applying Global Delivery Model methodologies

» Infosys is able to cross sell and up sell solutions, ensuring the market potential is maximised

» Capability and solutions are being developed for these markets

» CAD-CAM

» Finite element analysis

Slide 20


Core principle 4 - Focus on Consulting Core principle 4 - Focus on Consulting

» Consulting services provide a high value-add to our clients

» Such engagements generate larger downstream opportunities, and provide a valuable insight into the business of our clients

» Consulting in Europe mixes a local talent pool with the power of the Global Delivery Model to provide superior services

» Strong differentiator for Infosys against its competitors

» Providing a mix of on-site and offshore consulting capability

» Bringing rich mix of consulting skill and delivery resource, managing the risk of offshore deployments for clients, resulting in rapid scaling and mitigating the risk of failure

Slide 21


Core principle 5 - Portfolio approach to managing Europe

Core principle 5 - Portfolio approach to managing Europe

Invest

» Growth markets include Financial Services, Retail, Manufacturing, Automotive & Aerospace, Telecom

» More aggressive localisation plans» Near shore options» Solutions and alliances orientated

towards these markets

Sustain» Sustaining business levels in

selected geographies» Apply best practices from ‘Invest’

markets» Focus on maintaining revenue

streams and profitability

Others» Pursue opportunities in new

geographies, new verticals» Start-up in potentially lucrative new

markets and treat according to segment

Regenerate

» Utilities, Pharma» Develop specialized services» Kick-start through alternate

strategies, then build incrementally

Slide 22


Open to questions…Open to questions…

Slide 23

Thank youThank you

european markets b. g. srinivas vice president and head – european practice b. g. srinivas vice...

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