COMPANY PROFILE This chapter is divided into two parts. In part 1, an attempt is made to present the profile of IT Industry WIPRO and in part 2, the profile of INFOSYS is presented. PROFILE OF WIPRO Wipro Limited (Wipro) is a global information technology (IT) services company. Wipro provides outsourced research and development, infrastructure outsourcing, business process outsourcing (BPO) and business consulting services. The Company operates in three segments: IT Services, IT Products, Consumer Care and Lighting. The IT Services segment provides IT and IT enabled services to customers. The IT Products segment sells a range of Wipro personal desktop computers, Wipro servers and Wipro notebooks. The Company is also a value added reseller of desktops, servers, notebooks, storage products, networking solutions and packaged software. The Consumer Care and Lighting segment manufactures, distributes and sells personal care products, baby care products, lighting products and hydrogenated cooking oils in the Indian and Asian markets. On June 10, 2011, the Company acquired the Commercial Business Services Business Unit of Science Applications International Corporation (SAIC) 1. Wipro Technologies is a global services provider delivering technologydriven business solutions that meet the strategic objectives of its clients. Wipro has 55+ Centers of Excellence that create solutions around specific needs of industries. Wipro delivers unmatched business value to customers through a combination of process excellence, quality frameworks and service delivery innovation. Wipro is the World's first CMMi Level 5 certified software services 35
company and the first outside USA to receive the IEEE Software Process Award 2. Within the Indian market, Wipro is the leader in providing IT solutions and services for the corporate segment. It offers Systems Integration, Network Integration, Software Solutions and IT services. Wipro Limited is a $5 billion Indian conglomerate. It is one of the top IT industries in India. Wipro Ltd has interests varying from information technology, consumer care, lighting, engineering and healthcare businesses. Billionaire Azim Premji leads the group. GENESIS OF WIPRO Wipro started as a vegetable oil trading company in 1947 from an old mill founded by Azim Premji's father. When his father died in 1966, Azim, a graduate in Electrical Engineering from Stanford University, took on the leadership of the company at the age 21. He repositioned it and transformed Wipro (Western India Vegetable Products Ltd) into a consumer goods company that produced hydrogenated cooking oils/fat company, laundry soap, wax and tin containers and later set up Wipro Fluid Power to manufacture hydraulic and pneumatic cylinders in 1975. At that time, it was valued at $2 million. In 1977, when IBM was asked to leave India, Wipro entered the information technology sector. In 1979, Wipro began developing its own computers and in 1981, started selling the finished product. This was the first in a string of products that would make Wipro one of India's first computer makers. The company licensed technology from Sentinel Computers in the United States and began building India's first mini-computers. Wipro hired managers who were computer savvy, and strong on business experience. 36
In 1980 Wipro moved in software development and started developing customized software packages for their hardware customers. This expanded their IT business and subsequently developed the first Indian 8086 chip. Since 1992 Wipro began to grow its roots off shore in United States and by 2000 Wipro Ltd ADRs (American Depositary Receipts) were listed on the New York Stock Exchange. The company's revenue grew by 450% from 2002 to 2007. This success has led to higher salaries (wages have been growing by more than 14% per year since 2005), which puts pressure on the company's margins VISION OF WIPRO The Vision of WIPRO is to contribute for global e-society, where a wide range of information is being exchanged beyond time and space over global networks, which breaks down the boundaries among countries, regions and cultures, allowing individuals to take part in various social activities in an impartial, secure way. To do continuous effort to enhance people's lifestyle and quality by means of developing new technology in wireless communication. MISSION The Mission of WIPRO is to be a RF System Solution Provider, through its innovative research and design works for a new world of broadband wireless communications. 37
GOALS OF WIPRO To support customers who rely on our ability as an advanced RF System Solution Provider To build up core competencies through collaboration with technological partners contribute to the Ubiquitous Networking Society by providing chip level RF system solutions SPIRIT OF WIPRO Intensity to win Act with sensitivity Unyielding integrity CORE VALUES OF WIPRO Outstanding Teamwork Challenge Spirit CORPORATE CULTURE Everyday at Wipro is challenging and thought provoking. What is tested is drive, enthusiasm and initiative. New ideas are appreciated and innovation is encouraged. Necessary support is given to transform a good plan into action. NATURE OF BUSINESSES OF WIPRO IT Services: Wipro provides complete range of IT Services to the organization. The range of services extends from Enterprise Application Services (CRM, ERP, e-procurement and SCM) to e-business solutions. 38
Wipro's enterprise solutions serve a host of industries such as Energy and Utilities, Finance, Telecom, and Media and Entertainment. Product Engineering Solutions: Wipro is the largest independent provider of R&D services in the world. Using "Extended Engineering" model for leveraging R&D investment and accessing new knowledge and experience across the globe, people and technical infrastructure, Wipro enables firms to introduce new products rapidly. Technology Infrastructure Service: Wipro's Technology Infrastructure Services (TIS) is the largest Indian IT infrastructure service provider in terms of revenue, people and customers with more than 200 customers in US, Europe, Japan and over 650 customers in India. Business Process Outsourcing: Wipro provides business process outsourcing services in areas Finance & Accounting, Procurement, HR Services, Loyalty Services and Knowledge Services. In 2002, Wipro acquiring Spectramind and became one of the largest BPO service players. Consulting Services: Wipro offers services in Business Consulting, Process Consulting, Quality Consulting, and Technology Consulting. FINANCIAL RESULTS Wipro reported a 61% rise in third-quarter profit as it added new clients and made improvements in its pricing structure. Net income under U.S. accounting rules rose to 4.27 billion rupees ($98 million) in the three months ended Dec. 31, from 2.66 billion rupees ($61 billion) a year earlier, slightly higher than analysts expected. Revenues rose 34 percent in the period. Wipro said it was able to charge new clients more for higher-margin services. The company added 26 clients in the quarter at the unit serving 39
customers outside Asia-Pacific, boosting sales to 20.9 billion rupees ($479 million) from 15.6 billion rupees ($357 million) a year earlier. However, gains from price increases were offset by increasing salaries and a huge turnover in staff in its business process outsourcing (BPO) division. The company continues to use currency hedging to offset the rising rupee but said the rupee's rise against the dollar remains a challenge. "Looking forward, the environment we see is one of strong volume growth with prices moving in a narrow band," Wipro Chairman Azim Premji said. The rupee appreciation will pose an additional challenge in sustaining profitability. Wipro expects fourth-quarter revenue to rise to $370 million from last quarter's $367 million. Wipro added 2,274 employees at the unit serving customers outside Asia-Pacific in the quarter, bringing its total workforce to 39,337. Wipro s larger rivals Tata Consultancy and Infosys this month both reported profit gains of more than 50 percent for the quarter. Tata Consultancy's net income rose 54 percent on sales 38 percent higher. Infosys said profit rose 52 percent from a year earlier as sales gained 49 percent to 18.8 billion rupees. The two companies together added about 4,800 workers in the quarter 40
QUATERLY RESULTS(IN Rs) June2009 [1 Quarter] March2009[ 4 Quarter] June2008 [1 Quarter] Sales Turnover 52879.00 52989.00 47046.00 Other Income 955.00 977.00 1028.00 Total Income 53834.00 53966.00 48074.00 Total Expenditure 39350.00 41290.00 39347.00 Operating Profit 14484.00 12676.00 8727.00 Interest -442.00 1297.00 672.00 Gross Profit 14926.00 11379.00 8055.00 Depreciation 1364.00 1427.00 1248.00 Tax 1583.00 1531.00 1347.00 Reported PAT 11979.00 8421.00 5460.00 Equity Capital 2931.00 2930.00 2924.00 Extra Ordinary Items 0.00 0.00 0.00 Adjusted Profit After Extra Ordinary Item 11979.00 8421.00 5460.00 Book Value 85.38 85.38 0.00 EPS 8.17 5.75 3.73 Dividend 0.00 0.00 0.00 41
QUATERLY RESULTS (IN %) % Change over % Change over March, 2009 June, 2008 Sales Turnover -0.21 12.40 Other Income -2.25-7.10 Total Income -0.24 11.98 Total Expenditure -4.70 0.01 Operating Profit 14.26 65.97 Interest -134.08-165.77 Gross Profit 31.17 85.30 Depreciation -4.41 9.29 Tax 3.40 17.52 Reported PAT 42.25 119.40 Equity Capital 0.03 0.24 Extra Ordinary Items 0.00 0.00 Adjusted Profit After Extra Ordinary Item 42.25 119.40 Book Value 0.00 0.00 EPS 42.09 119.03 Dividend 0.00 0.00 42
Financial Snapshot (Rs. in millions) ----------------------------------------------------------------------------------------------------------- Mkt. Cap 674642.32 P/E * Div EPS (TTM) * 18.61 200.00 24.74 Book Value 85.38 Debt Equity Ratio 0.40 Return On Networth 23.76 Current Ratio 1.83 Quick Ratio 1.76 ----------------------------------------------------------------------------------------------------------- --------------------------------------------------------------------------------------------------------- NET 2009June 2009March 2008December 2008September --------------------------------------------------------------------------------------------------------- Sales 52879.00 52989.00 53970.00 54050.00 Profit1 4926.00 11379.00 10079.00 11302.00 43
Knowledge Management in WIPRO: Since its inception, Wipro, with its open culture, has believed in cultivating knowledge and with its business expanding, it has become all the more critical to get knowledge intensive, and implement an enterprise wide KM system. Since there is no accepted standard framework for KM, Wipro has evolved a framework in accordance with its needs, to achieve its business vision. It has been designed to build on the existing efforts in the organization and enhance the culture of knowledge sharing and utilization. To build and sustain a KM system, a cultural change in the propensity to share knowledge is fundamental, which is the most difficult part of knowledge management. An organization should be able to induce the requisite behavioural change among people who are the contributors and users of knowledge. It requires strong leadership to bring in cultural changes, set the right direction, and continuously monitor progress. Using appropriate rewards and recognition programmes is also necessary. This framework encourages both bottom-up and top-down approaches to accelerate the culture change. Objectives Knowledge Management in Wipro organization. Mature the organization to a competency based and knowledge driven opportunities. Enable new technology/practices adoption for diversification and growth. Develop competency extension framework to create new business Knowledge Management of WIPRO The Wipro KM framework has three main frameworks: 44
LEARNING KEEP (Knowledge Enhancement, Extraction and Practice) CARE (Competency Augmentation with Research Excellence). Achievements of Wipro: First Indian IT Service Provider to be awarded Gold-Level Status in Microsoft's Windows Embedded Partner Program. World's largest independent R&D Services Provider. World's 1st PCMM Level 5 software company. World's 1st IT Services Company to use Six Sigma. The first to get the BS15000 certification for its Global Command Centre. Among the top 3 offshore BPO service providers in the world. Only Indian company to be ranked among the 'Top 10 Global Outsourcing Providers' in the IAOP-Fortune Global 100 listings. First company in the world to be certified in BS 7799 (2002) security standards. Wipro s KM Practices Wipro follows meticulous KM practices in order to excel in its ITeS business. Some of the best practices followed by Wipro Technologies are: KM servers are maintained for each and every individual development centre, which integrates with Wipro s main KM server. Each and every individual employee will have read only access to this database and authors will have the read/write permissions for their respective articles. Each and every team is having KM lead who administers the team s KM database. KM leads collects the information from all members of the team and are responsible for editing them and uploading them into central KM database of Wipro. Weekly KM meetings are held by each and every team. Apart from trainings given to freshers; various discussions and brain storming sessions are conducted 45
in order to generate new ideas. All the KM meeting discussion MOM s (minutes of meeting) are sent by KM leads of the team. Wipro strives to continuously improve its KM practices by recognizing the best practices across the organisation and encouraging its employees to innovate best KM practices. Wipro annually recognises the Best KM lead, Best KM practice and Best KM Team across Wipro. Wipro annually conducts and celebrates an event for knowledge management recognition. PROFILE OF INFOSYS LTD. INTRODUCTION Infosys Ltd.,is a global technology services company. Infosys provides business consulting, technology, engineering and outsourcing services to help clients in over 30 countries. Infosys s end-to-end business solutions leverage technology for its clients. Its suite of business solutions includes business and technology consulting, custom application development, infrastructure management services, maintenance and production support, package enabled consulting and implementation including enterprise solutions, product engineering and lifecycle solutions, systems integration, validation solutions and cloud-based solutions and services. The Company also provides software products to the banking industry. Through Infosys business process outsourcing (BPO), it provides business process management services, such as offsite customer relationship management, finance and accounting, and administration and sales order processing. Infosys defines, designs and delivers technology-enabled business solutions that help Global 2000 companies win in a Flat World. Infosys also provides a complete range of services by leveraging our domain and business expertise and strategic alliances with leading technology providers 3. 46
Infosys Technologies Limited (BSE: 500209, NASDAQ: INFY) is a multinational information technology services company headquartered in Bangalore, India. It is one of India's largest IT companies with 103,905 professionals (including subsidiaries) as of Jun 30, 2009. It has offices in 22 countries and development centers in India, China, Australia, UK, Canada and Japan. Infosys International Inc. has a solid reputation as a business and information technology consulting company. GENESIS OF THE COMPANY INFOSYS Infosys was founded on July 2, 1981 in Pune by N. R. Narayana Murthy and six others: Nandan Nilekani, N. S. Raghavan, Kris Gopalakrishnan, S. D. Shibulal, K. Dinesh and Ashok Arora, with Raghavan officially being the first employee of the company. Murthy started the company by borrowing INR 10,000 from his wife Sudha Murthy. The company was incorporated as "Infosys Consultants Pvt Ltd.", with Raghavan's house in Model Colony, north-central Pune as the registered office. headquarters. In 1982, Infosys opened an office in Bangalore which soon became its Infosys went public in 1993. Interestingly, Infosys IPO was undersubscribed but it was "bailed out" by US investment banker Morgan Stanley which picked up 13% of equity at the offer price of Rs. 95 per share. The share price surged to Rs. 8,100 by 1999 making it the costliest share on the market at the time. At that time, Infosys was among the 20 biggest companies by market capitalization on the Nasdaq well ahead of Adobe Systems, Novell and Lycos. 47
According to Forbes magazine, since listing on the Bombay Stock Exchange till the year 2000, Infosys' sales and earnings compounded at more than 70% a year. In the year 2000, President of the United States Bill Clinton complimented India on its achievements in high technology areas citing the example of Infosys. In 2001, it was rated Best Employer in India by Business Today. Infosys won the Global MAKE (Most Admired Knowledge Enterprises) award, for the years 2003, 2004 and 2005, being the only Indian company to win this award and is inducted into the Global Hall of Fame for the same. Infosys was rated best employer to work for in 2000, 2001, and 2002 by Hewitt Associates. In 2007, Infosys received over 1.3 million applications and hired less than 3% of applicants. Business Week reported that Infosys, along with Wipro and Tata accounted for nearly 80% of the [H-1B] visa petitions approved in 2007 for the top 10 participants in the program. In April 2009, Forbes rated Infosys among the 5 best performing companies in the software and services sector in the world. In 2009, Infosys was considered one of the Business Week s 50 Most Innovative Companies. From December 2008 till April 2009, Infosys has fired over 2500 employees on account of bad performance. The company has been hit hard by lower revenue from a crisis hit European and North American market. On Aril 15, 2009 Infosys reported its first ever sequential fall in its revenue in a decade during the March 2009 quarter 48
VISION OF INFOSYS solutions. To help our clients meet their goals through our people, services and MISSION Infosys International Inc. is dedicated to providing the people, services and solutions clients need to meet their information technology challenges and business goals. Work to understand the needs and requirements of clients before proposing a solution Develop responsive proposals that provide cost-effective solutions to Client needs Deploy the right mix of people and products to deliver value-added services and solutions to clients Follow-up on the quality of services and solutions to clients Appreciate the trust that clients put in us as we work with them to improve their business and information technology. About Infosys Infosys Technologies Limited Type Public BSE: 500209 NASDAQ: INFY Founded July 2, 1981 Headquarters Bangalore, IndiaElectronics City, Hosur Road Key people N.R. Narayana Murthy(Chairman and Chief Mentor) Kris Gopalakrishnan (Chief Executive Officer and Managing Director) S. D. Shibulal (Chief Operating Officer and 49
Director) Industry Software services Products Finacle (a universal bankingproduct) Services Information technologyconsulting services and solutions Revenue Rs. 21,693 crore ($4.66 billion) (FY 2008-09) [ Net income Rs. 5,988 crore ($1.28 billion) (FY 2008-09) [1] Employees 103,905 [2] Subsidiaries Infosys BPO Infosys Consulting Infosys Australia Infosys Mexico Infosys Sweden Infosys China Website www.infosys.com Source:www.infosys.com Infosys Technologies Limited is an information technology Services Company headquartered in Bangalore, India. Infosys is one of the largest IT companies in India with 104,850 professionals (including subsidiaries) as of Dec 21, 2009. It has offices in 22 countries and development centers in India, China, Australia, UK, Canada and Japan. EVOLUTION OF INFOSYS Infosys was founded on July 2, 1981 in Pune by N. R. Narayana Murthy and seven others: Kris Gopalakrishnan, Nandan Nilekani,N. S. Raghavan, S. D. Shibulal, Ashok Arora and K. Dinesh, with N. S. Raghavan officially being the first employee of the company. Murthy started the company by borrowing INR 10,000 from his wife Sudha Murthy. The company was incorporated as "Infosys Consultants Pvt Ltd.", with Raghavan's house in Model Colony, north-central Bengaluru as the registered office. headquarters. In 1982, Infosys opened an office in Bangalore which soon became its 50
Infosys went public in 1993. Interestingly, Infosys IPO was undersubscribed but it was "bailed out" by US investment banker Morgan Stanley which picked up 13% of equity at the offer price of Rs. 95 per share. The share price surged to Rs. 8,100 by 1999 making it the costliest share on the market at the time. According to Forbes magazine, since listing on the Bombay Stock Exchange till the year 2000, Infosys' sales and earnings compounded at more than 70% a year. In the year 2000, President of the United States Bill Clinton complimented India on its achievements in high technology areas citing the example of Infosys. In 2001, it was rated Best Employer in India by Business Today. Infosys won the Global MAKE (Most Admired Knowledge Enterprises) award, for the years 2003, 2004 and 2005, being the only Indian company to win this award and is inducted into the Global Hall of Fame for the same. Infosys was rated best employer to work for in 2000, 2001, and 2002 by Hewitt Associates. In 2007, Infosys received over 1.3 million applications and hired fewer than 3% of applicants. Business Week reported that Infosys, along with Wipro and Tata accounted for nearly 80% of the [H-1B] visa petitions approved in 2007 for the top 10 participants in the program. INITIATIVES In 1996, Infosys created the Infosys Foundation in the state of Karnataka, operating in the areas of health care, social rehabilitation and rural uplift, education, arts and culture. Since then, this foundation has spread to the Indian 51
states of Tamil Nadu, Andhra Pradesh, Maharashtra, Kerala, Orissa and Punjab. The Infosys Foundation is headed by Mrs. Sudha Murthy, wife of Founder Cum Chief Mentor Narayana Murthy who is fondly called "NRN" by all his staffs and contemporaries. Since 2004, Infosys has embarked on a series of initiatives to consolidate and formalize its academic relationships worldwide under the umbrella of a program called AcE - Academic Entente. Through case study writing, participation in academic conferences and university events, research collaborations, hosting study trips to Infosys Development Centers and running the Instep Global Internship Program, the company communicates with important[peacock term]stakeholders in the academia. Infosys' Global Internship Program, known as In Step, is one of the key components of the Academic Entente initiative. It offers live projects to interns from the universities around the world. Instep recruits undergraduate, graduate and PhD students from business, technology, and liberal arts universities to take part in an 8 to 24 week internship at one of Infosys' global offices. In Step interns are also provided career opportunities with Infosys. In 1997 Infosys started the "Catch them Young Programme", to expose the urban youth to the world of Information Technology by conducting a summer vacation programme. The programme is aimed at developing an interest and understanding of computer science and information technology. This programme is targeted at students in Grade IX level. In 2002, the Wharton Business School of the University of Pennsylvania and Infosys started the Wharton Infosys Business Transformation Award. This technology award recognizes enterprises and individuals who have transformed their businesses and the society leveraging information technology. Past winners include Samsung, Amazon.com, Capital One, RBS and ING Direct. 52
Infosys also has the largest training center for a private sector organization in Asia. The training center is located in Mysore, Karnataka. It currently accommodates 4,500 trainees each year. In 2009 a new training center has been opened which accommodates 10,000 trainee software professionals. This new center is also located in Mysore. In 2008, Infosys along with National Institute of Advanced Studies created 'Infosys Mathematics Prize' for excellence in Mathematics research 4. Global offices Asia Pacific India - Bangalore, Pune-Maharashtra, Bhubaneswar, Chandigarh, Chennai, Gurgaon, Hyderabad, Jaipur, Mangalore, Mumbai, Mysore, New Delhi, Thiruvananthapuram,[18] Australia - Melbourne, Sydney and China - Beijing, Shanghai, Hong Kong - Hong Kong, Japan - Tokyo, Mauritius - Mauritius, New Zealand - Wellington, UAE - Sharjah, Philippines - Taguig City,Fiji Island - Suva, Rajasthan - Bikaner and Thailand - Bangkok North America Canada - Toronto, USA - Atlanta (GA), Bellevue (WA), Bridgewater (NJ), Charlotte (NC), Southfield (MI), Fremont (CA), Houston (TX), Glastonbury (CT), Lake Forest (CA), Lisle (IL), New York, Phoenix (AZ), Plano (TX), Quincy (MA), Reston (VA) and Mexico - Monterrey Europe Belgium - Brussels, Denmark - Copenhagen, Finland - Helsinki, France - Paris, Germany - Frankfurt, Stuttgart, Italy - Milano, Norway - Oslo, Poland - Łódź, The Netherlands - Utrecht, Spain - Madrid, Burgos, Sweden - Stockholm, 53
Switzerland - Zürich,Geneva and UK - Canary Wharf, London South America, Brazil - Belo Horizonte Financial Summary (LTM Dec 09) IFRS Revenues: Net Income after taxes: Earnings per ADS: Total assets: Cash and cash equivalents: US$ 4,629 million US$ 1,285 million US$ 2.25 (basic) US$ 5,578 million US$ 3,105 million Indian GAAP (consolidated) Total Income : Net profit after taxes : Earnings per share (Rs. 5) : Total assets : Cash and cash equivalents : Source: www.infosys.org Rs. 22,433 crore Rs. 6,262 crore Rs. 109.69 (basic) Rs. 22,408 crore Rs. 14,449 crore References: 1. http://in.reuters.com/finance/stocks/companyprofile?symbol=wipr.bo 2. http://ubiquesystems.co.in/technical_partner.asp 3. www.infosys.com/newsroom/press-releases/pages/opens-first-office-nz.aspx 4. www.infosys.org 54