Infosys plans offshore model to lessen H1, L1 dependency

By siliconindia   |   Tuesday, 31 August 2010, 03:22 Hrs   |    3 Comments
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Infosys plans offshore model to lessen H1, L1 dependency
Bangalore: At a time when the clampdown on visas by the U.S. has become a growing concern for the IT services companies, Infosys is planning an 'extreme offshoring' model to lessen dependence on H1 and L1 visas, reports Bibhu Ranjan Mishra of Business Standards.

Infosys' onsite revenue were around 10,461.32 crore (46.7 percent) and offshore revenues were 12,121.5 crore, (53.3 percent) for the year ended on 31 March, 2010. According to the company, it is capable of increasing its offshore utilisation capabilities to 95 percent. The intention was to prepare the company to face an extreme situation should negative sentiment brewing in the US intensify further, said the company.

Infosys has already conducted pilot programmes with a couple of clients in the U.S. with which it has proven the model, which is expected to have a far-reaching impact on the delivery of IT services. By sitting at remote offshore locations, the company successfully transitioned outsourced projects to India.

The U.S/ border security legislation will double the visa application fee, and is seen as targeted the Indian IT services industry. Unless there are further laws passed in the U.S. that completely halt outsourcing, U.S. companies have no reason to stop shipping work to India.

Despite offshoring being at the forefront of the delivery roadmap, the IT industry used to send people to the U.S. on H1 and L1 visas on a temporary basis to transition clients' work to India. This process requires gathering first-hand information about a client's business requirements and readying the framework before shifting work offshore.

According to the company, the number of visa renewals has fallen 80 percent in the last three years. Infosys today employs around 13,000 people in the U.S., of which the approximate number of H-1B visa holders is 8,900 and L-1 visas around 1,800.

Over the last couple of quarters, Infosys has increased its offshore ratio a few percentage points. According to S D Shibulal, COO, Infosys Technologies, the company has many clients who are pushing it to reduce onsite work further.

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