Sign up for Equitymaster's free daily newsletter, The 5 Minute WrapUp and get access to our latest Multibagger guide (2017 Edition) on picking money-making stocks.

This is an entirely free service. No payments are to be made.

Download Now Subscribe to our free daily e-letter, The 5 Minute WrapUp and get this complimentary report.
We hate spam as much as you do. Check out our Privacy Policy and Terms Of Use.
Software: Delivering India advantage - Views on News from Equitymaster
  • E-MAIL
  • A  A  A
  • Jul 2, 2003

    Software: Delivering India advantage

    ‘The only thing more powerful than a great idea, is a great idea powerfully executed,’ said William Blake. In this respect, there is one aspect of Indian software companies’ execution capabilities that has gained global recognition – the Global Delivery Model. Whether it is Infosys, or Wipro, or Satyam, their delivery models have evolved over the years. In this article, we try to explain what the typical global delivery model is, and how has it benefited the cause of these companies and of the Indian software sector as a whole.

    What exactly is it?
    It is basically a framework within which a project is distributed and teams work from various locations coherently. As per this framework, project teams perform in a coordinated way through seamless communication and clearly defined process guidelines. For simplifying the explanation further, we take the example of Infosys’ delivery model.

    As per the Infosys’ model, in an offshore development project, teams of IT professionals are assigned visits to a client’s side to determine the scope and requirements of the project. Once the initial specifications of the project have been established, the project managers return to the relevant global development centre (Infosys has 17 offshore development centres with 16 in India). This is in order to supervise a larger team of IT professionals dedicated to the development or implementation of the solution as required by the client. A small team, however, remains at the client’s side to manage project coordination and address changes in requirements as the project processes.

    To the extent required, a dedicated team provides ongoing maintenance from Infosys’ global development centres. The client’s systems are linked to Infosys’ facilities enabling simultaneous processing in its global development centres. The model thus ensures that project managers remain in control of execution throughout the life of the project regardless of location.

    Global Delivery Model: A representation

    Source: Infosys

    India advantage?
    The benefits accruing to clients as they make use of Indian software companies’ delivery model are immense. The measurable benefits of outsourcing extend from 35% cost reduction, to 75% time-to-market, to 10% productivity-enhancements. Over that, there are benefits to clients on account of access to highly skilled IT manpower. Indian software majors then have customized their delivery models as per clients’ requirements, and this brings in more flexibility in the way a particular project is executed.

    How do investors benefit?
    As per NASSCOM, over 50% of Fortune 500 companies have incorporated offshore outsourcing into their strategies, and around 80% of these (203 companies) use India as their development base. While Fortune 500 companies have been outsourcing to India, the contracts that are coming in have been small in size. Indian software companies like Infosys and Wipro, however, continue to invest in enhancing their models through continuous investment in people and branding and distribution infrastructure. This is likely to translate into bigger contracts in the long-term. And investors will realize the benefits progressively going forward.



    Equitymaster requests your view! Post a comment on "Software: Delivering India advantage". Click here!


    More Views on News

    Tech Mahindra: Our Revised View (Quarterly Results Update - Detailed)

    Aug 2, 2017

    A better than expected turnaround in performance results in a change in view.

    Wipro: A Decent Start to the Year (Quarterly Results Update - Detailed)

    Jul 27, 2017

    Digital services drive growth for Wipro in 1QFY18.

    Infosys: A Decent Start to FY18 (Quarterly Results Update - Detailed)

    Jul 14, 2017

    Infosys starts FY18 on an encouraging note with a stable performance.

    Ankit Shah's First Five Insider Recommendations (The 5 Minute Wrapup)

    Aug 5, 2017

    How to get exclusive insider recommendations from Ankit Shah.

    TCS: Currency Volatility Plays Spoilsport (Quarterly Results Update - Detailed)

    Jul 14, 2017

    TCS starts FY18 decently despite an adverse currency impact.

    More Views on News

    Most Popular

    This Small Cap Can Drive Chinese Players Out of India (and Make a Fortune in the Process)(The 5 Minute Wrapup)

    Aug 17, 2017

    A small-cap Indian company with high-return potential and blue-chip-like stability is set to supplant the Chinese players in this niche segment.

    The Most Important Innovation in Finance Since Gold Coins(Vivek Kaul's Diary)

    Aug 10, 2017

    Bill connects the dots...between money and growth, real money and real resources, gold and cryptocurrencies...and between gold, cryptocurrencies, and time.

    It's the Best Time to Buy IT Stocks(Daily Profit Hunter)

    Aug 16, 2017

    The IT Sector could be in an uptrend till February 2019. Are you prepared to ride the trend?

    Bitcoin Continues Stellar Rise(Chart Of The Day)

    Aug 10, 2017

    Bitcoin hits an all-time high, is there more upside left?

    5 Steps To Become Financially Independent(Outside View)

    Aug 16, 2017

    Ensure your financial Independence, and pledge to start the journey towards financial freedom today!

    Copyright © Equitymaster Agora Research Private Limited. All rights reserved.
    Any act of copying, reproducing or distributing this newsletter whether wholly or in part, for any purpose without the permission of Equitymaster is strictly prohibited and shall be deemed to be copyright infringement.

    LEGAL DISCLAIMER: Equitymaster Agora Research Private Limited (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. Information herein should be regarded as a resource only and should be used at one's own risk. This is not an offer to sell or solicitation to buy any securities and Equitymaster will not be liable for any losses incurred or investment(s) made or decisions taken/or not taken based on the information provided herein. Information contained herein does not constitute investment advice or a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual subscribers. Before acting on any recommendation, subscribers should consider whether it is suitable for their particular circumstances and, if necessary, seek an independent professional advice. This is not directed for access or use by anyone in a country, especially, USA or Canada, where such use or access is unlawful or which may subject Equitymaster or its affiliates to any registration or licensing requirement. All content and information is provided on an 'As Is' basis by Equitymaster. Information herein is believed to be reliable but Equitymaster does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind, whether express or implied. Equitymaster may hold shares in the company/ies discussed herein. As a condition to accessing Equitymaster content and website, you agree to our Terms and Conditions of Use, available here. The performance data quoted represents past performance and does not guarantee future results.

    SEBI (Research Analysts) Regulations 2014, Registration No. INH000000537.

    Equitymaster Agora Research Private Limited. 103, Regent Chambers, Above Status Restaurant, Nariman Point, Mumbai - 400 021. India.
    Telephone: +91-22-61434055. Fax: +91-22-22028550. Email: info@equitymaster.com. Website: www.equitymaster.com. CIN:U74999MH2007PTC175407

    Become A Smarter Investor In
    Just 5 Minutes

    Multibagger Stocks Guide 2017
    Get our special report, Multibagger Stocks Guide (2017 Edition) Now!
    We will never sell or rent your email id.
    Please read our Terms

    S&P BSE IT

    Aug 23, 2017 01:51 PM