BITC PROJECT REPORT GDM-INFOSYS

Global Delivery Model The term Global Delivery Model is typically associated with companies engaged in IT consulting and services delivery business and using a model of executing a technology project using a team that is distributed globally. While the commonly understood meaning of the term implies globally distributed resources, the term itself has acquired a broader definition. Gartner, for example, defines global delivery model to encompass a "focus on the technical skills, process rigor, tools, methodologies, overall structure and strategies for seamlessly delivering IT-enabled services from global locations" Most IT services and consulting firms worldwide make a reference to this model of delivery to signify one or more of the following value propositions they bring to their customers: A global presence ensures an understanding of the local language and culture wherever they may be present, which is seen to be an advantage when trying to understand customer requirements. A global presence implies that the organization has access to resources of varying costs that allows it to deliver services to its customers at an optimal cost, typically a mix of costlier 'on-site' resources combined with cheaper 'offshore' resources. A global delivery model implies that potentially, a firm can work round the clock for its customer, handing off work from one location to another at the end of the 'day shift' ('follow the sun' model) - thus providing twice or even three times the capacity they would have if they worked in a single location/ time-zone only. Global locations also provide some degree of 'risk-proofing' a customer from natural or manmade disasters such as flooding, earthquake or political unrest - causing disruption in one place. In case of such events, a global company could presumably transfer work to another location where the situation is normal, thus ensuring that work did not get delayed for the client.

INTRODUCTION "The Global Delivery Model that has been at the heart of our execution is more than just a way of getting work done offshore. It is a genuine business innovation that delivers a superior value proposition at higher quality and lower cost. By leveraging global resources and global strengths, it creates a new degree of freedom." - Nandan Nilekani, President, CEO and Managing Director, Infosys, in 2006.

"Infosys can obtain skilled labour at better rates than its customers can in their own region and the focus of the GDM is maximizing skill while minimizing cost."2 - ZapThink, Massachusetts-based IT Market Intelligence Firm, in 2005.

In February 2006, Gartner3, a research firm focused on technology industries, published its 'Magic Quadrant for Offshore Application Services, 2006'. This report assessed 30 leading offshore application service providers. For its magic quadrant, Gartner evaluated service providers on the basis of parameters such as completeness of vision and their ability to execute4.

India-based Infosys Technologies (Infosys) was placed in the 'leaders' quadrant, signifying clear vision of the market direction and building competencies to sustain its leadership position in the market. Gartner's magic quadrant analyzed the competencies of the service providers based on their Global Delivery Model (GDM). Gartner said that Infosys' 'strong management capability relative to the other pure-play offshore providers' was one of the key demonstrated capabilities of the company. S. Gopalakrishnan (Gopalakrishnan), Chief Operating Officer and Deputy Managing Director of Infosys, said, "I am happy to see Infosys being recognized as a leader in this Offshore Application Services Magic Quadrant, the first time that Gartner has published one to focus on this area. This is an important indicator for the mainstream acceptance of GDM by clients."5 GDM provided a superior value proposition at higher quality and lower cost. The companies adopting this model leveraged their own global resources and strengths to achieve higher profitability.

Infosys used GDM as a strategic outsourcing tool; using it, the company could take the work to the place where it could be best performed at lowest cost with minimum risk. For a GDM to be efficient, the work had to be broken into logical components and distributed to locations where they could generate maximum value. By using GDM, Infosys delivered the highest process and quality standards, while leveraging differences in cost, quality and skill sets of manpower in different locations. The ultimate objective was to pass on these benefits to its clients.

The major part of Infosys' revenues was derived from GDM based application services. The company had decided to enhance its GDM capabilities by applying it to new services and adding in new global delivery locations. Commenting on the GDM, Manjari Raman, a Boston based management writer said, "What made Infosys' GDM disruptive was its framework for distributed project management - the ability to deploy multi-location, multi-time-zone teams to execute projects efficiently and at low cost. Background Note Infosys was incorporated as Infosys Consultants Private Limited7 on July 02, 1981 by a group of seven professionals8. From the beginning, Infosys relied heavily on overseas projects. One of the founders, Narayana Murthy, stayed in India, while the others went to the US to carry out onsite programming for corporate clients. One of Infosys' first clients was the US-based sports shoe manufacturer Reebok. Infosys hired its first set of employees in 1982 from the Indian Institute of Technology, Chennai. These employees were provided training and were sent abroad for onsite projects. The Global Delivery Model In the GDM, large scale software development projects were divided into different categories. Falling under the first category were the tasks that were to be carried out at the location of the client. Under the second category were the tasks, which needed to be carried out closer to the client. The third category consisted of tasks that could be done in remote locations, where process-driven technology centers with highly skilled manpower were easily available (Refer Exhibit IV for details of the tasks carried out onsite, near-site and at offshore locations). The work on projects was carried out 24 hours a day, with teams located at different locations across the world, working round-the-clock on the project. Nandan Nilekani, President, CEO and Managing Director of Infosys, commented, "The work can be moved anywhere. This allows for a degree of freedom in the way a business is conducted. The work can be moved depending on where it would be cheaper to do so, or to a place that has unutilized capacity, or special skills. This is the kind of innovation (GDM) for which we are taking credit for."

GDM - Making the Model Work For an offshore development project, a team from Infosys visited the client in order to determine the requirements of the project. After obtaining the required specifications, some of the team members stayed back with the client to coordinate and determine any changes that the client demanded in the project, while the project managers returned to the GDCs. At the clients' location, there was an on-site coordinator who communicated with the PDCs and ODCs regularly... Expanding GDM In 2003, Infosys launched GDM Plus, an enhanced service delivery model, a combination of more services and excellence in execution. Infosys defined GDM Plus as an integrated delivery model that encompassed vertical solutions, expanded vertical footprint and execution excellence. According to Infosys, GDM Plus was its strategic response to changing market conditions and the competitive landscape to deliver high volumes to customers. Execution excellence was to be achieved through business solutions, technology, domain expertise, quality, operational efficiency and people development The Benefits According to analysts, GDM was cited as one of the key factors behind the rapid growth of Infosys' revenues. In a span of 25 years, the company grew to generate revenues of US$ 2 billion in 2005-06. Infosys' revenues grew almost four-fold in the past four years (Refer Exhibit VII for five year revenues of Infosys). The company continued attracting a talented workforce in India and other countries. The number of employees of Infosys grew to 52,700 as of March 2006 against 10,700 in 2002. In the fiscal year 2005-06, Infosys derived more than 40% of its revenues through new GDM based services like package implementation, independent validation, business process management, infrastructure management and systems integration The Road Ahead Realizing the potential of GDM, several other Indian IT companies also began providing offshore services. Indian companies could charge a premium of 10-20% for their offshore services. But with these services becoming mainstream, there was competition among major players and customers became less willing to pay a premium. It was not long before multinationals also entered the fray. Several MNCs like Accenture , IBM Global Services , Electronic Data Systems , have started operating from India and began offering the same offshore rates as Indian companies. But Infosys remained confident that consultants and companies abroad could not match their manpower in their countries and hire equally talented employees in other locations with cost advantages. The multinationals would need to redesign their operations in order to replicate Infosys' GDM, which would be a very difficult task.

DETAILED EXPLANATION Infosys pioneered the Global Delivery Model (GDM) to ensure the distribution of application and business process lifecycle activities and resources, while ensuring their integration. The key drivers of our Global Delivery Model are: Processes Infosys relies on processes to consistently deliver high quality solutions while executing engagements from multiple locations. Our values, vision and policies form the first level of our three-tiered process architecture. They are implemented through process execution at the next level. These processes are defined by clear ownership using the Entry, Task, Verification, Exit (ETVX) paradigm along with clearly defined roles and responsibilities.

Quality System Documentation (QSD) Quality System Documentation (QSD) lists Infosys best practices in the form of processes. The QSD provides a vast repository of detailed procedures, templates, standards, guidelines and checklists. The QSD is updated every four months. Body of Knowledge (BOK) The Infosys Body of Knowledge (BOK) is a forum to share knowledge gained from experience. It is a central repository of experiential knowledge that can be tapped by peers at Infosys. Process Assets The repository of process assets facilitates the dissemination of "engagement learning" across

Infosys. A process asset is information gleaned from an engagement that can be reused during the future engagements. Process Database The Process Database is a software engineering database to study the processes at Infosys with respect to productivity and quality. Process Capability Baseline (PCB) Process Capability Baseline (PCB) maps out the performance of the process, i.e., what level of productivity and quality can be expected when following the process.

Tools Repository The Tools Repository is a centralized repository containing a list of tools that have been evaluated.

Quality

Quality is ensured across all our processes, interfaces and outputs in management, core and support processes. It helps us deliver long-term excellence, and ultimately, predictability of returns, through the Global Delivery Model (GDM), to all stakeholders. We improve "Execution Excellence" through continuous productivity improvement. We have continuously benchmarked our processes against world-class standards and models such as ISO 9001-TickIT, SEI-CMM / CMMI, ISO 20000, ISO 27000, AS 9100, TL 9000 and ISO 14001. Regular and rigorous assessments are conducted by reputed external assessors. Our process performance has emerged as better than that of our peers. Infosys has embarked on several strategic improvement initiatives:
y y y y y y

Baldrige-based assessment of units for business excellence Organization-wide reuse and tools initiatives for productivity improvement Patent application filed for PROSO, our project scheduling model Program management framework to enable execution of large deals Proactive risk assessment model and approach to mitigate execution risks eSCM Level 4 certification of Infosys BPO by the IT Services Qualification Center (ITSqc) at Carnegie Mellon University Internal quality certification to equip our team members with required skill sets quickly

Tools

The practice project management philosophy of Infosys is bolstered by the use of robust tools. We keep the largest and most complex projects on track with the following tools: Integrated Project Management

Integrated Project Management (IPM) is Infosys web-based tool for engagement management. It facilitates efficient and effective project management and addresses the functionality of a typical professional services automation framework. IPM supports the Infosys Global Delivery Model and SEI CMM Level 5 processes. Process Database The process database captures all project performance related metrics at Infosys. This data is used as a framework to construct the organization's process-capability baseline, which is used by project leaders to estimate effort, schedule tasks and predict defect levels during the engagementplanning phase. InFlux InFlux is the Infosys methodology used to define effective IT solutions for enterprise initiatives. It maps the business-process view for all IT initiatives, making it possible to understand the impact of IT on specific processes. Its framework is based on the digital concept of an extended organization that includes suppliers, customers and partners. InFlux allows you to study the roles of different systems and entities and how they function. PRISM Project Reviews by Infosys Senior Management (PRISM) is a web-based Intranet tool to automate the workflow for reviews, in line with engagement schedules and plans. The PRISM tool is a review mechanism that offers a clear picture of the engagement risks involved for a client as well as Infosys. It also drives process improvement and sharing of best practices.

Knowledge Management Infosys provides end-to-end workforce collaboration and knowledge management services including Knowledge Management Process Consulting, Collaboration and Knowledge

Management Applications, Portals, Content Management, Document Management, Enterprise Application Integration, Security and Workflow. Our Knowledge Management Services help you assess your needs, evaluate technologies and recommend solutions in the context of your business problems. We are at the forefront of introducing new methodologies and practices of knowledge-sharing and adoption. We have launched blogs and customized Wiki solutions to enable communities to collaborate across geographical, time and project boundaries. Our central knowledge repository hosts over 75,000 knowledge assets, most of which are experiential documents derived from different facets of our business, formal customer deliverables and process-mandated artifacts. Experts from Infosys Knowledge Management group have authored the book Ten Steps to Maturity in Knowledge Management: Lessons in Economy. It focuses on Knowledge Management from a practitioners viewpoint and covers all aspects of planning, design, implementation and assessment of knowledge management.

Program Management

The project management processes followed by Infosys are in line with the SEI CMM Level 5 requirements. These processes address key aspects of a project across the project life cycle, including:
y y y y y y y

Project planning Project monitoring, reporting procedure and review mechanisms Project risk management Configuration management Change management Issue escalation and resolution Intra-engagement communication with client managers At the outset of every engagement, our robust planning and estimation processes delineate all aspects of the project, including: Project profile Project processes related to life-cycle, change management, requirements traceability, process tailoring, etc. Deliverables and effort estimates Goals and milestones

y y

y y

y y y y

Project tracking: Tasks, issues, quality, client feedback, reviews, reporting, escalation Defect estimates and defect prevention Project team roles, skills, key personnel, training Risks and mitigation plan Our project management and project quality processes are strengthened by the use of a variety of custom-built as well as third party tools, which help us manage the complexities of the Global Delivery Model (GDM).

Risk Mitigation

At Infosys, a detailed plan for risk identification, monitoring and mitigation is a part of project planning. It covers risk identification, prioritization and mitigation options. Our business continuity plans are focused on: Infrastructure
y y y y y y

Well-defined business continuity and disaster recovery plans at the organization and client level De-risked global development centers State-of-the-art, fail-safe network connectivity with multiple fall-back options Interoperability to ensure seamless relocation Locations set away from potentially conflict-ridden zones Fully-equipped Offsite Disaster Recovery Facility in Mauritius Security Stringent physical security and network security Secure human resources practices Regular external audits to ensure compliance and cover blind spots Confidentiality and Privacy Access restrictions and controls for all information assets Context-dependent security measures including physical isolation of projects, if needed Legal agreements with employees to ensure compliance Agreements under relevant jurisdiction for the client People Built-in redundancies for key personnel Back-up of project artifacts and experiential repositories Infosys undertook an organization-wide Risk Self-Identification (RSI) exercise. It covered all business units, verticals, service offerings, support groups and subsidiaries. The results offered a

y y y

y y y y

y y

deeper, more diverse and quantified feedback on risks. The results of the RSI were collated and categorized and the probability and impact-magnitude assessment was completed. Using the Basic Risk Inventory, we have identified primary risk categories that form the Infosys enterprisewide Risk Management (IRM) framework. This enables us address actual and potential risk events in a systematic manner.