Posts Tagged ‘Infosys’

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

Infosys to hire 2,100 in US to spur growth

November 7th, 2014

Global software major Infosys Ltd. will hire 2,100 people, including 600 graduate engineers, in the US over the next 12 months to support its business growth and enhance its capabilities.Outsourcing20

“We are hiring this fiscal (2014-15) 1,500 professionals for consulting, sales and delivery and 600 graduates with Bachelor’s and Master’s degrees from US universities over the next 12 months,” the company said in a statement on Thursday.

The fresh hiring will enable the outsourcing firm to ramp up its expertise in client relationship management, consulting and technical delivery.

“The recruitment drive will enable us provide clients local market insights, industry-leading expertise and timely responsiveness to critical issues,” company’s human resources head in Americas Peggy Tayloe said in the statement.

Source:http://freepressjournal.in/infosys-to-hire-2100-in-us-to-spur-growth/

Infosys to hire over 2,100 in US, including 600 graduates

November 6th, 2014

Infosys, a global leader in consulting, technology, outsourcing and next-generation services, today announced a major recruitment drive in the US to support the growth of its business and enhance its capabilities. The company plans to hire 1,500 professionals for consulting, sales and delivery during the current financial year. In addition, it will hire close to 600 bachelors and masters graduates from US Universities over the next twelve months.Outsourcing20

With this program, Infosys will bolster its expertise in client relationship management, consulting and technical delivery. The addition of these employees will help Infosys provide its clients local market insights, industry-leading technology expertise, and timely responsiveness to critical issues.

Infosys will recruit up to 300 management and technology graduates from leading US universities. They will work across multiple technology domains including digital, big data, analytics and cloud. Up to 180 graduates will be recruited into the Infosys consulting practice in the US. They will join existing teams advising clients on business and technology transformation strategies. Infosys will also continue its global recruitment program of hiring MBA graduates from leading business schools, and will recruit 100 Masters graduates for its sales teams under this initiative.

Speaking on the recruitment drive, Peggy Tayloe, head of human resources in Americas, Infosys said, ”We believe in hiring professionals who will help us build a next-generation services company. Technology is truly reshaping the world around us today. At Infosys, we offer the best opportunities to learn while working on exciting projects, pioneering the latest technologies for some of the world’s best corporations.”

Sandeep Dadlani, executive vice president, Head of Infosys Americas, Infosys added, added, ”We are particularly looking forward to bringing a large group of graduates into Infosys in the US. This is a terrific time for young, smart and talented leaders to be graduating from the best American schools and choosing a career in the technology industry.”

Shares of the company gained Rs 41.5, or 1.02%, to settle at Rs 4,126. The total volume of shares traded was 73,263 at the BSE (Wednesday).

Source:http://myiris.com/newsCentre/storyShow/20141106113030199/corporates/Corporate%20Stories/2014/11/06.html

Are Indian suppliers IBM Global Services’ biggest threat?

November 4th, 2014

India’s IT services industry has grown fast, but who would have thought that TCS is now IBM Global Services’ biggest threat.Outsourcing6

That’s what one management consultant told me last week. I was writing an article about talk of IBM reducing its workforce in India. IBM is one of the biggest IT services firms in India in terms of workforce and even if it is true that it will cut about 50,000 staff there, it will still be very big with about 100,000 people.

Read my article here. I have has quite a few emails from readers about this.

But the industry is changing and the provision of low cost full time equivalents is no longer the way to grow and profit for IT services firms. They want non-linear business models and they are doing this with less labour intensive services that harness cloud and automation technologies for example. At the same time customers want services using the latest technologies.

For example Scandinavian IT services firm Cygate has expanded its business without needing to recruit more staff by using automation software from IPSoft. In 2010, the company, which serves more than 1,000 customers including some of the biggest corporates in the Nordic region, was experiencing 20% growth in sales. This meant the company needed to add resources or risk service levels deteriorating. But just adding manpower would have reduced its margins.

So you would think the Indian suppliers who grew their businesses through offering highly skilled IT workers at a lower cost to Western corporates, would struggle the most. But it seems this is not the case. In fact it could be another phase of growth for these firms.

Mark Lewis, outsourcing lawyer at Berwin Leighton Paisner, says, “TCS, India’s biggest IT services supplier,  is achieving both linear and non-linear growth. It is still recruiting heavily in India and is building its global workforce at the same time,” said Lewis.

While IBM Global Services is always a default consideration businesses outsource IT it is not winning as many deals as it used to. Peter Schumacher, Value Leadership Group, said conversations with large corporates in Europe reveal that Indian suppliers are now  now IBM Global Services’s biggest competitor, and TCS is the biggest of these.

The Indian advantage of lower cost skills may have diminished overtime because western IT services firms have built huge offshore workforces of their own. At the same time wages in India have increased. But during the hay day of low cost IT services companies like TCS, Infosys, Wipro and HCL have build strong businesses and developed domain expertise, by moving beyond pure IT services to business services using IT.

The other interesting point is that western IT services forms have shot them in the
Have the western IT services firms let the foot by reducing the fear associated with offshoring. There was a time that offshoring IT was a brave and perhaps a risky strategy for a big business. But companies like IBM have used offshore staff and as a result made it the norm for outsourced service delivery.

Today service levels from offshore and western suppliers are little different and CIOs will make decisions based on the pure business value, rather than perceived risks.

“In Europe, TCS will add almost $1bn in new business in 2014, which underlines the enormous market momentum and customer confidence they now enjoy,” says Schumacher.

Source:http://www.computerweekly.com/blogs/outsourcing/2014/11/are-indian-suppliers-ibm-gloabl-services-biggest-threat.html

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