The Hindu Business Line : Global delivery model is working fine for Infosys

INFOSYS Technologies is banking on the global delivery model to continue to deliver as it gears up for the next phase of growth, according to Mr Nandan Nilekani, CEO and Managing Director.

For a company, which is on the threshold of becoming a billion dollar company this fiscal, the next phase of growth is expected to present a whole host of challenges.

"The first is managing scale, the second managing risk, the third managing growth with differentiation, the fourth, the whole process of becoming more multicultural and diverse and the fifth is the outsourcing challenge. Lot of these complex issues have to be managed and we have to navigate through all that," he outlined.

Reposing faith in the global delivery model, Mr. Nilekani said, "this is a model which leverages on the power of modern technology such as broadband to reengineer value chains from a local activity to a global activity, from a local resource pool to a global resource pool and local capacity utilisation to a global capacity utilisation."

Infosys is also attempting to integrate different parts of the world into the model, for which it has the basic architecture. "Today we have 600 employees from more than 30 nationalities across the world. Half of them have come through the expert acquisition in Australia and the other half from organic recruitment."

Responding to a question on competition from multinational vendors such as IBM and Accenture, he pointed out that their model was a shrinking revenue model, where they will have to rework their internal organisation and invest their sales, general and administrative expenses on lower revenue. For the Indian players, the challenge of adding more service lines is accretive in nature, as they are building on the existing global delivery model. For Infosys, which has grown from $ 121 million in revenues in 1999 to a billion dollar firm this fiscal, Mr Nilekani conceded that the company would face the challenge of employee productivity, responsiveness to the marketplace, speed and bureaucracy. "Our smartness will come from figuring out ways and means to manage it and continue providing value," he added.

Asked about the prospect of client-employee acquisitions, he said, "We have done it before and we are open to it. The individual size will depend on the risk perception at that time or the business opportunity at that point." In a client-employee acquisition, a vendor such as Infosys takes over the employees of a client as a part of the outsourcing contract.