Global Delivery Model is the most successful outsourcing model amongst all the other

models. Its a combination of onsite model and offshore model. In the global delivery model
the service provider has its offshore development centers spread out across the entire globe.
The service provider need not have their own offshore development centers across the globe
but they can use the resources of their partners located around the globe, and thus follow a
global delivery model. This provides the client with a large working team with varied
qualities and expertise in different fields

Some of the factors that compelled Infosys to develop its own model:-

1 Requirements Definition

95% of project delays and cost overruns were directly related to their inability to accurately
capture business requirements. Too often, organizations do a poor job of defining
requirements, then go off and do a terrific job of developing the wrong solution. Look for a
vendor that has a defined process regarding Requirements Definition. Once the business
requirements have been defined, the vendor must be able to validate them.

2 - On site presence

During any project, there are tasks that need to be accomplished on site at your location(s).
These tasks include requirements definition, project management and reporting, high level
design, and coordination of off site resources. Vendors commonly refer to these customer
facing functions as knowledge intensive tasks.

3 - Delivery capability

Just as there are clear knowledge intensive or on site functions within any project, so, too,
are there labor intensives tasks. These include such things as detailed design, coding, and
various levels of testing. These labor intensive activities are the best candidates to be
conducted off site, and it is in these areas where you can expect to gain the most cost savings.

4 - Communication plan

Clear communication is a critical success factor in any distributed delivery engagement. In a

distributed environment, communications issues range from production support calls to data
security issues. Choose a vendor that recognizes this fact and demonstrates logical paths of
communication.

5 - Project Status Visibility

Wherever possible, the vendor should utilize technology to communicate up to the minute
project status. Insist that your chosen vendor demonstrate their tool to your satisfaction.
6 - Geographic Sanity

Businesses today are facing increased governmental and consumer pressure regarding
offshore initiatives. Data security requirements, questions about employee screening, and
concerns regarding a pending labor shortage are causing many organizations to look for
alternative delivery vehicles. A few vendors are now offering domestic alternatives. Often,
the best solution may be a combination of domestic and international delivery functions.

Infosys Global delivery Model

For an offshore development project a team from Infosys visits the client in order to
determine their requirements. After agreeing the specifications some of the team members
remain with the client to co-ordinate and manage any changes while the project manager
returned to the Global development centre (GDC).

The work is then distributed to Proximity development centres (PDC) and offshore
development centres (ODC). At the GDC's project manager supervises a large number of IT
professional's who developed and implemented solutions as required by the client. Every
meeting are conducted and a status report prepared to access progress. The weekly meetings
are conducted in real-time meetings with key personnel from the client and Infosys
participating through audio conference facility. Status reports are circulated both to the client
and also to all members involved in the project in the PDC's and ODC's.

To ensure seamless communication between the development centres and the clients, Infosys
uses the services of several service providers along with a mix of satellite and fiber optic
links. Video conferencing is used for executive level discussions and training. Infosys also
established a business continuity and disaster recovery centre in Mauritius.

In order to avoid the risk of pricing by its competitors, Infosys has been trying to move up the
value chain by offering high end services like enterprise solutions and independent testing.
After establishing itself in backend tasks like code writing and system integration it then
moved itself into consultancy. In April 2004 it established Infosys Consulting Inc in Texas in
order to gain more involvement in its client's projects and build brand differentiation. Global
delivery model is preferred where the client requires that the job be done in a quick manner,
which is made possible by the number of offshore teams working together towards the
completion of the task. Also where the project is very big requiring sufficient skilled
manpower to complete the task this is the only model, which provides solution in such cases.
The level of risk involved is also minimum since even if any of the offshore development
centers face any disaster the project work will not be stopped, as the work can be transferred
immediately and continued by the remaining offshore development centers.

Advantages of Global Delivery Model

Lower Risks: In case of any disaster/emergency at one of the offshore centers, the work
continues at or is transferred to other offshore development centers. So the risk involved is
low.

Round-the-Clock Productivity: 24*7 work cycle becomes possible because of the time-
zone difference.

Best Results: Accomplishment of high quality work is possible, as the client will get the
benefit of skilled manpower spread out across the globe.

Shorter Lead-Time: Shorter project completion time as the work is completed by a number
of offshore development centers working together with the same target.

Cost benefits: The cost saving benefits for the client resulting from offshore outsourcing is
also appreciable.

No New Employee Additions Required: The service provider can provide the client with a
large working team with varied skill set, which the client may not be able to employ for just
the task at hand.

No Possibility of Communication Gap: Onsite team, which will be in direct contact with
the client, is able to understand the clients needs in a better way. So no chance of
misunderstanding the clients needs.

Faster Response: Because of onsite teams presence response to changes in clients

requirements is fast.

In Global Delivery Model (GDM) projects are divided into components and are executed
independently and concurrently, partly at the client site and the rest at the development
centres. The components are then integrated into high quality robust solutions.

The Disadvantages are:-

Customer Concentration. Although the company has about 590 active customers, its top
clients account for a large part of total revenue, with the top customer accounting for 8% and
9% of revenue in 2008 and 2007, respectively, and its top five customers accounting for 20%
of revenue in 2008 and 21% in 2007. This customer concentration is high for a company of
this size and maturity, and while it speaks to the strength of Infosys services, it poses a
significant risk should any large customer cut its IT spending or switch to a competing
offshore provider. In an economic downturn the loss of any large customer is unlikely to be
offset by greater revenue from the base.The companys largest customer (British Telecom
[BT $17.40]) cut a significant number of projects across multiple vendors including
Infosys.They were heavily dependent on business from US-based companies. The IT
spending of US companies were decreasing and this meant that the company would be in a
difficult situation.

Poor Project Management and Delivery. While Infosys has a solid reputation among its
customers, if the company fails to meet customer expectations and deliverables, it could face
the risk of prolonged legal issues and customer attrition.

Competitive Environment. Infosys participates in a highly competitive market where basic

IT services are rapidly commoditized. In addition, given the companys move toward higher
value added services and software license/subscription revenue, the competitive pressure is
likely to increase, as Infosys now faces challenges from software companies as well as
systems integrators and IT outsourcers. Even in a business with recurring revenue from long-
term contracts, companies that do not deliver expected service levels will lose existing
customers and fail to attract new ones. Infosys faced growing competition from countries like
China and Philippines which were putting up a strong challenge to Indian companies by
offering lower wages and more facilities.These companies would provide with low cost and
high value added custom-built services, organisation specific solutions and global delivery
networks that would optimize cost and quality,providing maximum benefits to clients.

Limited Levers for Margin Expansion. While Infosys has done an excellent job of
increasing volume and pricing as well as operating levers (e.g., offshore mix and utilization)
to offset wage inflation and rupee appreciation in 2008, the operating margin has been
relatively flat. The company has few operating levers available to expand margins. Given the
current economic environment, the price increases are unlikely and that Infosys, along with
the other Indian providers, may face pricing pressure as customers try to control costs.

Implementation of a successful global delivery model is not an easy task, but it is achievable.
When selecting a vendor partner, be sure that the organization has a local office in your area.
Be comfortable with their ability to staff the on site tasks with appropriate, long term
resources. Also, be sure that all knowledge intensive tasks will be conducted on site, not
remotely. Ensure that they have a process for accurately capturing and validating business
requirements. For the off site, labor intensive tasks look for employee based centers that
follow a proven delivery methodology. The vendor should be able to provide simple yet
complete communications plans that address the myriad of issues inherent in global delivery
engagements. Finally, ensure that the proposed geographic delivery solution is one that fits
the dynamics of the business problem, and not a one size fits all solution.

At the core, the creation of a widely respected meritocracy combining engineering

excellence with a relentless customer orientation
A no nonsense approach: speed and frugality
 A sincere and acute focus on employee satisfaction and skills development

Agility: in a highly competitive environment, adapting constantly and anticipating the

future through on-going business process innovation.

With this approach Infosys will be able to meet the changing business environment in future.
 Exhibit 1

Exhibit 2- Infosys revenue growth 1994-2003

Exhibit 3- Infosys Global Delivery Model

Exhibit 4- Global Delivery Model