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stringent quality guarantees attached to the large project responsibilities improved
clients’ satisfaction as well as Infosys’s profit margins. In addition, its ability to manage
and successfully execute large projects positioned it as a long-term service provider to
its clients. The client list swelled to 350, with more than 85% repeat business.
Software Maintenance: Infosys’s early offerings in this field included maintaining
legacy systems. Later it developed expertise in updating the systems to keep pace with
the changes in the marketplace. Especially for its US-based clients, the 11-hour time
difference between India and the United States helped it update the systems while they
were idle at night.
Y2K Technologies: One of the earliest areas of growth for the Indian IT industry,
Y2K technologies helped Infosys as much as it did any other software company. But
Infosys was prudent enough to realize the short-term nature of this domain and to
consciously reduce its revenue dependence on Y2K-related businesses. Much before
the deadline of the year 2000, Infosys gradually detached resources from Y2K-related
projects and allocated them to long-term projects.
Software Reengineering: Infosys helped its customers graduate to new technolo-
gies without abandoning the existing ones. The company, for example, developed
software solutions to help clients shift from a mainframe-based system to client/server-
based system or from a simple database to a relational database.
ERP and E-commerce: Infosys’s management was visionary enough to have
anticipated an increase in global business opportunities on these two fronts. Before
stepping into ERP domain, Infosys implemented SAP for its own operations gaining
valuable expertise in the process. Beginning with ERP consulting, the company started
offering customized ERP solutions to suit clients’ needs. A simultaneous initiative
gained ground in the field of Internet-related services, especially e-commerce, and Web
services. Infosys developed a comprehensive range of services targeted at start-ups as
well mature e-commerce operations, and e-commerce slowly emerged as one of the
highest revenue generators for the company.
Scalability Strategy
Back in 1990s when the founders formulated their corporate strategy, they realized
that to succeed on a global level would require them to create a positive image among
global companies. As Murthy mentioned, “When in the early ’90s we went to the US to
sell our services, most CIOs didn’t believe that an Indian company could build the large
applications they needed. The CIOs were very nice to us, of course. They offered us tea,
listened to what we had to say and then said, ‘Look, don’t call us, we’ll call you.’ We
realized a huge gap in our perceptions. We wanted a situation where if you ask CEOs in
the US, Europe, or Japan, ‘Which is the company you want to outsource software to?’
We wanted them to say, ‘Infosys.’”
To realize this dream, Infosys started crafting a corporate strategy with a focus on
building a high-growth, high-margin, and low-risk company. The management had a mix
of completely opposite objectives at hand. They had to maximize profits while reducing
risk. They had to choose sustainable sources of revenue and yet remain responsive to
new market trends. They had to maintain excellent quality while cutting costs and project
delivery times. These opposing sets of objectives required the resource clout of a