it major increases salary by 17%, Sets Aside $11 M for Expansion

Infosys Plays Down Competition

Posted: 2004-04-16 00:00:00+05:30 IST
Updated: Apr 16, 2004 at 0000 hrs IST

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New Delhi: Playing down the emerging competition from American software services firms like Accenture and EDS, Infosys Technologies managing director Nandan Nilekani said that his competitors were facing an ‘anti-incumbency’ factor in the US market.

He also said that Infosys was much better-placed to become a complete (from consulting to back-end) service provider as compared to its global competitors.

“There is an anti-incumbency factor working in the market because the customer companies are looking at better value of their investments,” Mr Nilekani said. “We are much better placed as we have to go up the value chain to complete the service portfolio. They (US-based competitors) will have to go down the chain, which is quite difficult looking at issues like realigning corporate culture and costs,” he added.

Infosys, however, has decided to hike the salaries of its employees by an average of 17 per cent for this fiscal to retain talent in the face of increasing competition for skilled workers.

... To Focus On Europe, Apac For Growth

PRACHI VERMA

New Delhi: Infosys Technologies is eyeing Europe and Asia Pacific region for a larger presence. The company, which has recently acquired a company in Australia called Expert Information Services, is also looking at acquisition route to expand in these regions.
“We will continue to grow organically and inorganically. We are open to acquisitions and will look at geographical expansion once we find a suitable company in these regions,” Infosys chief executive officer, managing director and president Nandan Nilekani told eFE. He added, there are several locations in Europe and Asia Pacific that are still untapped.
The company is also planning to strengthen its intellectual property rights (IPR) offering.
“We are looking at creating intellectual property within software,” he said. The two key drivers for Infosys future acquisitions will be the need for additional specialised skills and expansion in new geographies.
Further, Infosys is looking at increasing the headcount across all its operations by 8,000 to 10,000 people in this fiscal. The company is also looking at ramping up its centres in Hyderabad, Bangalore, Pune, Chennai and Mangalore. “Most of the new recruitment will happen in the same cities where we are planning ramp-ups,” Mr Nilekani said.
Observing that the billing rates have stabilised since the last two to three quarters, he said, “We expect the billing rates to remain stable for the next couple of years as well.”

Mr Nilekani said that the company believed in developing a global delivery model (offering end-to-end solution through mulitple global presence). “It is not just about cost, offshoring or India. It’s an innovative method of doing business in the global market,” he said.

Mr Nilekani said that Infosys would invest $11 million in working towards developing a global delivery model this fiscal. The company will scale up its subsidiary in China, strengthen its banking software products and expand its newly set-up US consulting firm.

“For this year, we expect our topline to be around 31 per cent and earnings to be around 27 per cent in dollar terms. The difference between the two will be invested in these initiatives across the globe,” Mr Nilekani said.

The company is looking at a headcount of 500 people in its US consulting firm in the next three years. It is also looking at a total employee base of 200 people for its China subsidiary in the next two years with an outlay of $5 million.

Infosys has also approached Reserve Bank of India for allowing more freedom in hedging its foreign exchange risks. “We are in discussions with RBI to allow us greater freedom in hedging. Currently we are allowed to hedge up to 50 per cent of the previous year’s revenues but that is not enough.

If regulations allow we can hedge our net foreign exchange for the entire year. But regulations in India do not allow that,” he said.

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