May 9, 2005

Infosys - The Dell of the consulting world?

Wired magazine has named Infy as the 9th company in their annual Wired 40.

I quote:

The caricature of the Indian outsourcing industry as a voracious monster bent on devouring US jobs isn't just oversimplified, it's obsolete. Case in point: Infosys. The Indian coding shop, which garnered $1.1 billion in sales last year, is hiring 500 employees for Infosys Consulting, a $20 million foray into high-end IT advice based in - guess again - Fremont, California. Dirt-cheap outsourcing plus strategic guidance makes for a powerful combination - and one that moves jobs back to the US.
Challenge: Beware the rest of Asia. In the low-cost sweepstakes, China is to India as India is to Western economies.
Opportunity: Do to bloated US consultancies what Dell did to the PC industry.

On the same theme read Tom Rodenhauser's article on the same issue.

The Infosys idea is simple enough: marry a select group of posh partner-types from name-brand firms with an enormous, low-cost delivery backend. It wants to build a
consulting pyramid without the massive -- and expensive- middle section.

Infosys wants to combat this by flipping the model. Rather than populating its consultancy with scads of eager MBAs and six-figure types who look good in suits -- and are billed at 4x salary - the Indian company will conduct its analysis and development for pennies on the dollar. Selling, thought leadership and relationships will remain with the multi-national stars.
In theory, the concept wins high praise from cost-conscious buyers with demanding
expctations. But will consulting mimic the airline industry? And will Infosys be the first in a wave of "budget-conscious" consultants who seek to deliver high value at relatively modest prices?

Today's mega-consultancies face the same situation found in virtually every other industry -- clients expect first-class service at value prices.Infosys believes the only way to address the problem is by building a new model. It certainly challenges conventional wisdom.
And it also begs the question: would consultants fly business class if clients
refused to pay the bill?

Oh and it's not Infosys, even Wipro seems to be making quiet steps in that direction !