infy and the art of PR!

At 5.30 am, while working out at the gym, I saw few frequent Infosys ads on CNBC and I thought that it does merit a blog here.

Infy has relentlessly worked towards branding efforts - more than any other Indian service provider. The vision that the top management has is way ahead of its peers. No wonder their media hits are way higher than its peers in the Indian service provider business.

What drove them towards this obsession with branding?

Vision:
NRN's vision as conveyed to me by their Healthcare and Lifesciences chief during a campus presentation at CMU indicated that Infy wants to leverage its deep expertise that it develops at the grassroot levels in order to deliver business solutions. Also, I could practically experience this at one of our client engagements, where the management consultants who were brought in could not provide the most optimal solution due to lack of grassroot level knowledge. Most of them suffered lack of depth.

If one has good contextual knowledge for a client then one can provide a better solution -- there's no doubt about that. This is more relevant to complex transformations than simple best practices implementations for simple transformations.

Pressure to upsell:
In the GDM or Global Delivery Model, the revenues were primarily in USD and the costs were primarily in INR. With weakness in USD against INR, there is a huge pressure on their margins. This is forcing them to upsell.

Timing is right:
The timing of ads is right - with slowdown, US businesses will require more and more of outsourcing. The businesses cannot hold on to costly US-based resources if they want to stay competitive.

Lessons learnt:

Competing on price is not the silver bullet -
This reminds me of our lecture in International business by ex-chief economist of Gulf Oil (bought by Chevron in 1984). Sustainable business requires that one must compete on the quality and not on price. This came up during the Matsushita US market-entry strategy for a specific product.

Perception issues -
No matter what high-end services are delivered by Infy, they suffered from perception issue of being "cheap" or "inexpensive". Upselling the services is difficult once this happens. I remember doing a high end work that is delivered by some of the snobbish consulting firms and charged at 5-6 times.

Manage the forex actively-
Sound International finance principles need to be deployed if you want to be a true "global player." Infy lacked in this aspect. I remember the conversations I used to have with one of our Group Manager - Infy doesn't know how to handle forex and he used to have a popular perception that - ah, they are such a large firm, they must be having experts in place. Hell no! They didn't have experts until 07 in place. This was especially true with USD tanking more than 20% against INR in less than a year. Global players such as Merck have much more complex strategies in place for forex management. If Infy wants to become a true global player, they will have to increase the sophistication to mitigate this risk!