Software: Delivering India advantage - Views on News from Equitymaster

Helping You Build Wealth With Honest Research
Since 1996. Try Now

  • MyStocks


Login Failure
(Please do not use this option on a public machine)
  Sign Up | Forgot Password?  

Software: Delivering India advantage

Jul 2, 2003

‘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

Sorry! There are no related views on news for this company/sector.

Most Popular

How the 8-Year Cycle Can Help Identify Multibaggers (Fast Profits Daily)

Sep 11, 2020

This is how you can apply the greed and fear cycle in the market to pick stocks.

Why am I Recommending Caution? (Fast Profits Daily)

Sep 9, 2020

This is why I have changed my short-term view on the market.

This Could Be the Best September for Auto Stocks (Profit Hunter)

Sep 11, 2020

Here's why I think this month could be a great for auto stocks.

Why We Picked This Small-cap Stock for Our Hidden Treasure Subscribers (Profit Hunter)

Sep 17, 2020

This leading household brand will profit big time in a post covid world.


Covid-19 Proof
Multibagger Stocks

Covid19 Proof Multibaggers
Get this special report, authored by Equitymaster's top analysts now!
We will never sell or rent your email id.
Please read our Terms


Sep 21, 2020 09:01 AM