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Infosys to expand its geographical presence
By siliconindia
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Friday, 29 October 2010, 22:19 IST
Bangalore:Infosys Consulting, plans to hire 40 per cent more this fiscal, and is looking at acquisition to expand its geographical presence.
Infosys Consulting Chief Executive Officer and Managing Director, Mr Stephen R. Pratt said, "The future is very clear to us. Geographic expansion is a key to our future. We want to expand throughout Europe, South America and throughout Asia,"
Mr Pratt said the trick for an acquisition is to be accretive for a company which is growing very fast and that means there has to be synergy for acquisition.
"That's tough when the bar is so high. It is a trade off on what we think is best for the company and the shareholders," he said.
He said at present there are about 16,000 employees in consulting and package implementation. Without stating the actual number of people the consulting arm plans to hire, Mr Pratt said last year, too, they added 40 per cent more employees in keeping with the growth numbers for the company.
This year, too, the company would continue to do so. "It is not in our DNA to slow down. We want to keep growing as fast as possible. We should be growing faster than the Infosys average which means faster levels of hiring."
Mr Pratt said Infosys Consulting brought in a new model of business which combines strategy consulting with implementation.
"We probably have the purest model of new generation of consulting. The new generation of consulting combines very good strategy consulting with implementation throughout the project which is done in a highly distributed manner," he said.
He pointed that 10 years ago, all work was done on site. If one had to implement a project, the client would fly down all the people (to the client location) and they would stay in expensive hotels and the prices would be exorbitant.
"When we started Infosys Consulting, our biggest nightmare was to recreate our old firms, create another version of an outdated model of consulting," he said. But now, the new model is far better than what others have, and while the consulting market is growing at about 5-7 per cent, Infosys Consulting is growing at 40 per cent and "therefore we are taking the market share aggressively."
Mr Pratt said as far pricing is concerned, I think our goal is to provide more business value to the client at a lower cost. It is important to distinguish between the cost of a project and the rates we charge on a project. The largest determiner of the price of a project is where do we the work, he said.
He said if the project is carried out in India, the rates go down but in the US, it is as much as those of the competition.
The reason why we charge at a higher rate is because we want to retain and attract the best people.
Mr Pratt said as a subsidiary, Infosys Consulting has been profitable for four years now, but from a statutory perspective, it has been profitable for a year-and-a-half.
"The profitability of a consulting led business transformation project is higher than the Infosys average on a net margin basis. So it is a very profitable business."