Posts Tagged ‘Infosys’

Wipro spending $200 million on building next generation platforms

December 16th, 2014

Wipro is spending more than $200 million annually on building next generation platforms that focus on disruptive technologies including cognitive technologies, automation and machine-to-machine learning as the country’s third-largest software firm seeks to edge out competition in winning large deals. Outsourcing10

Over the past two years, the company has ploughed $400 million in developing about ten intelligent solutions, some of which it has started using internally and a few it is using for customers, said a senior executive. “Wipro has significantly stepped up its funding of the R&D projects in the last couple of years,” said chief technology officer RK Sanjiv.

“This is to not just ensure that we become the next generation services firm of future, but also to be future-ready for our customers,” said Sanjiv, declining to put a number. But he said the company invests more than the industry average in these initiatives.

This focus on building intelligent platforms coincides with the stint of Rishad Premji, son of chairman Azim Premji, as head of strategy, making some believe the younger Premji could be potentially driving this change at the Bengaluru based company.

Incidentally, it was Azim Premji who brought Tata Consultancy Services veteran Satishchandra Doreswamy, now chief business operations officer at Wipro, in 2011 to help transform the company by putting together a team of engineers to focus on these technological platforms. Wipro’s thrust on building internal intellectual property-led platforms comes at a time when cross-town rival Infosys, under new chief executive Vishal Sikka, too is aggressively talking about building platforms.

Homegrown technology companies invest on an average 2-3% of revenue on building platforms. Wipro’s revenue for the fiscal through March 2014 was $6.7 billion, and if it invests more than the industry average, it is putting in $200 million every year in new solutions.

Wipro is now a team of “hundreds of engineers and research scien tists”, according to Sanjiv. His mandate is to focus on three key themes: cognitive technology, machine-to-machine learning and in building smart devices.

According to some experts, information technology companies are investing internally in building these solutions because of the desire to win large outsourcing deals as every customer is looking to its IT vendor to bring in more valuegeneration business rather than merely maintaining the back-end technology infrastructure.

Doreswamy last month told ET that Wipro’s energy and utilities vertical managed to bag its $1.2 billion, 10-year outsourcing deal with Canadian utilities firm ATCO on account of the “transformational benefits” it could help offer.

“(Two other) examples of Wipro’s solutions are Base and Fixomatic suite of tools,” said Tom Reuner of London-based IT research firm Ovum. “The direction of this journey is to protect margins by automating low-level tasks while hiring and retaining talent for value-creating activities.”

Reuner and other experts said the focus of software exporters on intelligent solutions is also driven by their desire to increase revenue without increasing headcount.

In September, ET reported about Wipro’s plans to start with its most ambitious reorganization exercise, under which it aims to become a leaner 1,00,000-strong company from the current levels of 1,52,000 in three years.

The company plans to do this without resorting to mass layoffs but by “selectively filling” in roles of executives who leave.

As Wipro seeks to embrace automation and artificial intelligence, the company can do away with engineers who are currently doing basic-level repetitive work. Already, Wipro has started using, internally, a cognitive platform for its help desk system, thereby simplifying work process for employees. One other intelligent technology platform which the company has started work on for its retail clients is “Wipro Sight.”

Source:http://timesofindia.indiatimes.com/tech/tech-news/Wipro-spending-200-million-on-building-next-generation-platforms/articleshow/45523422.cms

Wipro, Infosys outpacing each other to meet demands in unfavourable global environment

December 9th, 2014

Battling to regain lost glory, Wipro and Infosys are stepping up their age-old rivalry, this time to out-innovate each other as the two Bengaluru-based software exporters invest in disruptive technologies pegged to artificial intelligence and design thinking to bring greater efficiencies for themselves and their customers.Outsourcing11

Infosys Chief Executive Vishal Sikka, at an analyst event in Pune on Thursday, said some of his company’s rivals were imitating it and went as far as labeling their moves proverbially as “imitation is the best form of flattery”. While he did not name any rival, for veteran watchers of Bengaluru’s software scene, the company he was referring to was clear: cross-town rival Wipro, which, on its part, claims to be investing “heavily” since 2012 in building data analytics and other next-generation platforms to help customers in the retail and healthcare space to improve their businesses.

In the past few years, both Infosys and Wipro have lost quite a bit of their sheen as they struggled to adjust with changing customer demand in an uncertain global business environment, leaving Mumbai-based bigger rival Tata Consultancy Services record phenomenal numbers since 2011. The original posterboys of India’s IT sector are trying cover the ground lost – by investing in technologies that can shake up the industry by disrupting the existing order and processes that are customer-focused – and their initiatives pit them against each other more than ever in the past.

The unfazed response of Wipro to Sikka’s comments was a testimony to the increased rivalry between the two. “I can say that we have a competitive edge,” said Satishchandra Doreswamy, chief business operations officer at Wipro. “We have been investing heavily in building the next-generation platforms for over two years with a focus on AAA (automation, artificial intelligence and analytics).

Platforms such as ServiceNXT, CloudCLM have started delivering value for some of key clients,” said Doreswamy, who was hired by Chairman Azim Premji three years ago to help transform Wipro by bringing in some of these advanced technologies. Although Doreswamy declined to quantify the impact of these disruptive technologies in Wipro’s growth, he said the range of productivity improvement differed from client to client. The former TCS veteran also said Wipro had over the last 24 months seen a “20-30% efficiency improvement” in the application development, maintenance and infrastructure management space.

Sikka, ever since he took the role of the first non-founder CEO at Infosys on August 1, has outlined a strategy of “building a new Infosys” by making fresh investments in bringing machineto-machine and automation platforms to the company’s traditional approach of delivering outsourcing services to customers. Sikka, who earlier this week completed four months at the company, said in Thursday’s analyst meet that he would share more details of what it was doing in this area in April next year.

For now, Infosys is training its software engineers on design thinking – a creative and systematic approach to problem-solving by placing the user at the centre of the experience – and is also in the process of launching an online training module on artificial intelligence for its employees. Doreswamy said Wipro has already brought in the customercentric approach and its overall net promoter score – a tool to gauge customer loyalty – has improved 30 percentage points.

Some experts, including Tom Reuner of London-based IT research firm Ovum said some of the next-generation service-delivery methods are still in nascent state and IT outsourcers are coy to talk in public as the full impact is still not fully understood. “(Nonetheless) Indian providers are at the forefront of this development as part of their push on nonlinear models,” said Reuner.

“Providers like TCS or Wipro have invested significantly in proprietary tools. The key to a broader adoption of robotic process is to build out robust cognitive engines (RPA) and artificial intelligence. These will be the conduit to moving RPA to the core of service delivery backbones.” Doreswamy said the immediate target for the company remains to adopt these disruptive technologies for at least 50% of customers. He declined to share further details.

Both companies are also looking to engage with startups to get access to new technologies. Wipro, after making minority investments last year in data analytics firm Opera Solutions and machine-to-machine learning-focused Axeda – although it exited Axeda this year – is setting up a corporate venture arm to be spearheaded by Rishad Premji that will initially invest up to $100 million (Rs 619 crore) in startups. Infosys too has set aside $100 million and is actively scouting the San Francisco Bay Area to find potential startups which could help the company with the missing innovation strand.

The focus of both companies is to win back the lost glory as rivals TCS and Nasdaq-listed Cognizant consistently outpaced them, and the industry, in revenue growth. Infosys, which was once the bellwether of the country’s information technology and commanded a premium in pricing compared with rivals, has been struggling to expand revenue in the last three years – it reported below-industry growth numbers for two years and was even forced to call founder Narayana Murthy back from retirement to steer the company last year.

In the last one year, Infosys even conceded to the fact of bidding for projects at prices which the company would not have done a few years earlier. Wipro has also been reporting disappointing growth numbers. Since the appointed TK Kurien as the CEO in January 2011, Wipro’s sequential quarterly revenue growth rate has not crossed 3% since the September 2012 quarter, making analyst Viju George of JP Morgan call Wipro’s situation as “a Curate’s egg”: good in parts but it must get multiple engines firing in tandem for it to qualify as a secular pick.

Source:http://economictimes.indiatimes.com/tech/ites/wipro-infosys-outpacing-each-other-to-meet-demands-in-unfavourable-global-environment/articleshow/45423814.cms

Infosys Plunges on Promoters’ Share Sale News: Where is a Hundred Billion Dollar to be Invested?

December 8th, 2014

Infosys Ltd saw its shares fall 4% on Monday on news that its co-founders are set to sell shares worth almost $1.1billion.Outsourcing11

The sale, said to involve four of its co-founders and their families, are to offer 32.6 million shares in the IT outsourcing firm for a fixed price of ₹1,988 ($32) each, a 4% discount to Friday’s close.

Narayana Murthy, Nandan Nilekani, S.D.Shibulal and K.Dinesh, have been named as those offloading the shares.

Deutsche Bank is the sole book runner for the issue and the books were covered just after launch, according to IFR, a Thomson Reuters publication.

As of September 2014, the founders and their families hold about 16% of shares outstanding.

Infosys launched a 1:1 bonus share issue earlier this month. The shares being offloaded could be the the pre-bonus equity stake.

In June, Vishal Sikka was chosen as the tech major’s CEO, breaking a trend of the founding members heading the organisation for more than three decades. The last few years had seen the company flounder, while its counterparts did roaring business.

Founder-Members Investment Profile

Narayana Murthy’s Catamaran Ventures has a strategic partnership with global retail giant, Amazon, for its India business. Murthy is also known to invest in various realty projects across the country. His other interests include FMCG and education.

Shibulal’s family office, Innovations Investment Management (IIM), manages investments in hospitality, property management, project management, investment portfolio management, plantations, farms and education. The company also owns an 800-apartment block in Seattle, USA.

Nandan Nilekani and his wife Rohini together are worth ₹7,700 crore, with 80% of it tied to their combined ownership of 2.75% in Infosys Ltd. They are well known philantrophists.

K.Dinesh, who resigned from the board in 2011, has been devoting his time to social work in the areas of health care, education and governance.

At the time of reporting, information on what the promoters seek to do with the funds is unavailable.

Source:http://www.ibtimes.co.in/infosys-plunges-promoters-share-sale-news-where-hundred-billion-dollar-be-invested-616432

Infosys unit’s overbilling Apple led to exit of top executives: sources

November 21st, 2014

Indian outsourcing major Infosys Ltd’s back-office services unit was overcharging Apple Inc, leading to the exit of top executives, two senior Infosys people said on Thursday.Outsourcing6

Infosys, India’s second-largest IT services exporter, said on Tuesday it had fired Abraham Mathews, chief financial officer of its Infosys BPO unit, for failure to comply with the company’s code of conduct.

Infosys BPO chief executive officer Gautam Thakkar resigned on “moral grounds” and would leave the company on Nov. 30, Infosys said. It did not give details about the charges against Mathews.

Infosys spokeswoman Sarah Gideon said the company would not comment further on the confidential investigations.

“The financial irregularities are not material in nature and the company has already made required disclosures. The company has taken disciplinary action on employees,” she said in an email.

Apple did not immediately respond to an email sent outside business hours seeking comment.

The irregularities in Infosys BPO’s dealings with Apple came out during an internal audit, said one of the people at Infosys, who declined to be named as he was not authorized to speak to the media.

Though the audit showed that the financial impact of the wrongdoing on the company was minimal, Infosys decided to take a tough stance to demonstrate its “zero-tolerance policy for any improper conduct,” he said.

The Economic Times newspaper on Thursday said Infosys would soon fire at least six more employees at the unit, after investigations revealed that they had produced inflated invoices and allegedly overbilled Apple for many months.

Infosys earlier this year brought in Vishal Sikka as its new CEO to chart a new strategy for the company, once a trend-setter for India’s more than $100 billion IT outsourcing industry. Infosys has struggled in recent years to retain staff and market share.

Source:http://indiatoday.intoday.in/technology/story/infosys-units-overbilling-apple-led-to-exit-of-top-executives-sources/1/402812.html

Six more to be sacked at Infosys BPO for inflated invoices as probe reveals company overcharged Apple

November 20th, 2014

Infosys, which announced the firing of the finance chief of its back-office arm on Tuesday, is set to sack more employees at the unit to underline its intolerance for financial impropriety as it emerged that the episode which has put an unflattering spotlight on the firm involved one of its marquee clients, Apple. Sources familiar with the company’s thinking said at least six employees at one of Infosys BPO’s European subsidiaries will be asked to leave soon after internal investigations revealed that they had produced inflated invoices and purportedly overbilled Apple for many months.Outsourcing5

The sources insisted the amount involved was “financially insignificant”, but the company was taking harsh action nevertheless to make an example of the case that has become an unwelcome distraction for new CEO Vishal Sikka as he seeks to recapture the IT bellwether status for Infosys. On Tuesday, Infosys announced that the chief finance officer of Infosys BPO, Abraham Mathews, had been fired “for not complying with its code of conduct”. The unit’s CEO, Gautam Thakkar, also said he would quit, taking moral responsibility. “We have always adhered to the highest corporate governance standards,” said a senior executive at Infosys.

“In the particular case, although it was a financially insignificant amount, the CFO should have reported the incident. For reasons best known to him, he did not and so we were left with no option,” the Infosys executive said. Infosys declined comment on the identity of the client at the centre of the case or elaborate the reasons for its punitive actions.

A company spokeswoman said on Wednesday: “The financial irregularities are not material in nature and the company has already made required disclosures. The company has taken disciplinary action on employees. We will not be able to comment on client-specific matters or on investigation as they are confidential in nature.”

An email sent to Apple remained unanswered. Meanwhile, details emerged that Infosys first unearthed the case of financial impropriety in September, following which it set up a panel to investigate it.

One source familiar with the investigation said that in this particular case, a small team of executives appeared to have made inflated invoices for the support provided by Infosys BPO, although these inflated invoices may not have been sent to Apple. After a month-long investigation, on Tuesday, the company said it was terminating the services of Mathews while Thakkar, who is one of the 13 executive vice-presidents at Infosys, will leave the company at the end of the month.

Infosys has already announced their replacements, appointing company veteran and senior vicepresident Anup Uppadhayay as the unit’s CEO and Deepak Bhalla as the new chief financial officer. While the episode could bolster the country’s second-largest software exporter’s long-held reputation for adhering to the highest corporate governance standards, some experts believe this episode could make it vulnerable to some collateral damage, particularly if Cupertino-based Apple, the maker of iPads and iPhones, were to reconsider its decision to engage with the back-office support provided by Infosys BPO.

“Apple for long has been debating on engaging with Indian outsourcers and this incident will certainly not go down well,” said Pradeep Mukherji, president of Avasant, a Mumbai-based management consultant that helps companies choose outsourcing firms. “Apple may even want to reconsider its engagement with Infosys BPO.”

Nonetheless, Mukherji said the proactive steps taken by the company, including the change in leadership at its back-office division, should help the company limit any further damage.

“Organisations like Infosys have an effective mitigation strategy in place to contain the damage and not let it go out of control. So I don’t see why other clients will be worried.” Anil K Gupta, professor of global strategy and entrepreneurship at the Smith School of Business, The University of Maryland, said Vishal Sikka had done the right thing by cracking down hard.

“If you excuse one instance of fraud, especially at the senior executive level, then you’re going down a slippery slope. He had to act and he did the right thing. It also helps boost his credibility both internally and externally,” he said. While the episode and the attention it has generated could, according to some, leave employees and other clients anxious, Infosys officials maintain this is just an isolated case and there was no reason for its other clients need to be “jumpy”.

Source:http://economictimes.indiatimes.com/tech/ites/six-more-to-be-sacked-at-infosys-bpo-for-inflated-invoices-as-probe-reveals-company-overcharged-apple/articleshow/45210347.cms

Infosys’ outsourcing unit CFO sacked; chief quits

November 19th, 2014

Infosys on Tuesday announced the termination of the services of Abraham Mathews, chief financial officer (CFO) of its business process outsourcing (BPO) subsidiary, for non-compliance with the model code of conduct. The company also said Gautam Thakkar, chief executive officer of Infosys BPO, had quit, taking moral responsibility for the incident.Outsourcing

While Infosys did not elaborate on the said violation, sources close to the development said Mathews had failed to bring to the company’s notice financial irregularities at one of its BPO centres. They added Mathews wasn’t directly involved in the irregularities, but had failed to report the incident.

The company is learnt to have dismissed the executive directly involved with the irregularities, termed “immaterial”.

“The board of Infosys BPO Ltd announced the separation of Abraham Mathews, its chief financial officer, from the services of the company for not complying with its code of conduct. The departure is in keeping with the company’s goal of setting the highest standards of corporate governance and adhering to the letter and spirit of the code of conduct,” the company said in a late night BSE filing.

Mathews had taken charge as CFO of Infosys BPO in December 2003.

The company has announced the appointment of Anup Uppadhayay, senior vice-president, global head of delivery for financial services and an Infosys veteran of 21 years, as Infosys BPO Ltd’s new chief executive and managing director, and Deepak Bhalla, associate vice-president and head of its corporate accounting group, as the new CFO.

Bhalla had joined the company in 1998.

“BPO is of fundamental and strategic importance to our company. Our endeavour is to transform BPO with process innovation, automation and artificial intelligence to deliver exceptional efficiency and business value to our clients,” Vishal Sikka, managing director and chief executive of Infosys, said.

For 2013-14, Infosys BPO had reported revenue of Rs 3,278 crore and a net profit of Rs 578 crore.

Source:http://www.business-standard.com/article/companies/infosys-outsourcing-unit-cfo-sacked-chief-quits-114111900013_1.html

New IT Jobs Set to Fall by 50% in Four Years: Crisil

November 10th, 2014

New hirings in the IT sector are likely to drop by 50 per cent over the next four years, according to a report by Crisil. The prediction is extremely negative for lakhs of engineering students across the country as the IT sector has traditionally been the biggest employer in the private sector.Outsourcing24

More than 7 lakh engineering students graduate every year. In fiscal 2013-14, Crisil estimates IT hiring at 1.05 lakh and says the number could come down to a mere 55,000 by 2017-18. The IT sector currently employs 31 lakh people or 24 per cent of total private sector jobs in the organised sector. The sharp slowdown will therefore impact the overall hiring sentiment in the economy.

IT jobs growth is slowing down because margins in the $118 billion outsourcing industry are under pressure. Frontline IT companies such as TCS, Infosys and Wipro earn nearly three fourth revenues from North America and Europe, where growth is still anemic. As a result, clients are asking companies to cut costs.

Since employee salaries account for the biggest cost component for IT companies, domestic outsourcers are reducing bench strength, improving employee utilisation rates and reducing other operational costs, Crisil says. In 2013-14, employee cost accounted for over 60 per cent of total cost of IT companies.

“Companies will run very tight ships because of which incremental employment will be curbed,” Crisil says.

The report says Indian companies are increasingly looking to maintain a leaner bench by adopting just-in-time hiring to improve utilisation rates. The current utilisation (or productivity) rate stands at 80 per cent and Crisil expects it to go up by 500 basis points in the medium term. A 100-basis-point improvement in utilisation impacts the employee growth by 105 basis points, the report says.

Companies are gradually migrating towards fixed price contracts, which eliminate the need for maintaining a large workforce for billing purposes. Such contracts weigh on hiring as revenue per employee goes up, Crisil notes.

Finally, Indian companies are planning strategies to move further up the value chain towards services such as consulting and software products, Crisil says. These services are currently dominated by global majors (such as Accenture, IBM), who have higher revenue per employee despite comparable employee bases.

Source:http://profit.ndtv.com/news/industries/article-new-it-jobs-set-to-fall-by-50-in-four-years-crisil-691206

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