Financial Daily from THE HINDU group of publications
Friday, Apr 09, 2004
Info-Tech - Software
Infosys plans to recruit 500 in US Floats consulting subsidiary in Texas
Mr N.R. Narayana Murthy, Chief Mentor, Infosys, and Mr Romil Bahl, MD, Infosys Consulting Inc, at a meet in Bangalore on Thursday. -- G.R.N. Somashekar
Bangalore , April 8
SOFTWARE major Infosys Technologies Ltd, which on Thursday announced it has floated its US consulting subsidiary, plans to recruit 500 professionals in the US over three years.
It feels such job creations would defuse outsourcing backlash to some extent. The company will invest $20 million initially in Infosys Consulting Inc and add 75 professionals in the first year.
Buoyed by $1 billion sales, Infosys aims to match its bigger rivals like Accenture and Cap Gemini Ernst and Young in the mature US market with a front-end consulting arm.
Infosys Consulting will help Infosys cut into the big ticket deals and compete directly with the likes of Accenture, EDS on a "surer footing", analysts said. ``We think, Infosys was losing out on several large deals due the lack of business consulting skill, when pitched against with the likes of Accenture. With this front-end, it is going to be a revenue booster,'' an analyst with a foreign brokerage said.
``We have taken a somewhat unconventional approach to build our consulting capabilities. Having witnessed numerous failed mergers and acquisitions in the industry, we are instead assembling a dream team of top consultants from all major firms,'' said Mr S. Gopalakrishnan, Chairperson of Infosys Consulting Inc and COO of Infosys Technologies.
The founding officers of Infosys Consulting include Mr Stephen Pratt, one of the top 25 consultants in the world voted by Consulting Magazine and till recently with Deloitte Consulting; Mr Romil Bahl, former leader of EDS' 5,000 person consulting practice, Mr Paul Cole, former head of global operations at Cap Gemini Ernst and Young; and Mr Raj Joshi, former CEO of Deloitte Offshore.
Mr Pratt, CEO of Infosys Consulting Inc, expects Infosys to act as ``magnet'' for talent as the consulting labour market in the US is undergoing a restructuring. Infosys is also likely to look into buy-out options to grow its consulting practice, Mr Gopalakrishnan said.
Commenting on offshore advantage, Mr Gopalakrishnan said, ``philosophically'' the company would try to "push as much work" to remote locations. The offshoring of certain projects would help to bring down the cost of entire consulting efforts and the clients would be able to save cost through such deals, Mr Pratt added.
``This is a wake-up call to our industry: we will offer clients more competitively priced projects, practical ways to increase competitiveness and a much higher return on their consulting dollar,'' Mr Pratt said.
On the Infosys Consulting model, Mr Pratt said while the first part of the model would focus on the client's needs onsite, the second part would deal with business preparation onsite and the third part would work on business solutions offshore. ``The consulting engine integrates with Infosys' global delivery model,'' Mr Pratt said.
It can be noted that top global consulting firms like Accenture, Ernst and Young are scaling up offshore facilities in India now to depress their cost curves, while software services vendor like Infosys, who had been developing solutions offshore for last 23 years, is likely to have a "first mover advantage" in this integrated consulting space, an analyst with a domestic brokerage said.
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