Best in France Project

1. Best in France Project Infosys Technologies, Ltd. Group EJ9 Kunju Tsai, Richard Abbiss, Arnaud Jacotin, Tomokiyo Yoshikawa, Andrea Girard June 2005

2. Contents • Infosys in France • Clients in France • Client Expectations • Why France? • Approach to International Expansion • Adaptations in France • Employee Integration • Challenges • The Costs of coming to France • Key benefits of French location • The Future for Infosys in France • References Best in France: Group EJ9

3. Infosys in France • Infosys is an Indian-based provider of consulting and Information Technology services to clients globally (36,000 employees world-wide) • Infosys offers its full range of information technology services in France, including: • Outsourced application and infrastructure services • Consulting services • Packaged application installation (including SAP, Oracle, APS, PeopleSoft. ERP offerings are particularly strong in the French market) • Systems integration services • Product R&D Services Best in France: Group EJ9

4. Infosys is evolving its offerings to the French market, • making them more industry-specific, • tailoring them towards more in-depth solutions for more specific areas of the market (for example, in the Finance sector, for developments related to compliance with the US Sarbanes-Oxley legislation) • For more information, please refer to the web site: www.infosys.com Best in France: Group EJ9

5. Clients in France • Infosys currently has 10-12 active clients in France • The Paris office of Infosys currently has clients in the Finance, Retail, Hi-Tech, and Manufacturing industry sectors Best in France: Group EJ9

6. Examples of work being done with French clients: • Development of international IT strategy for Cardif, an insurance subsidiary of BNP Paribas • Reengineered of business processes • Improved IT system • Deployed software worldwide • Development of an end-to-end supply chain management solution for a distributor of footwear • SAP implementation for a large manufacturing CAC 40 company • Assisted a major insurance firm with the rollout of a customer management system • Implemented an automotive manufacturing payroll systems • Set up a Bangalore-based R&D center with Alstom Power for the development of engineering solutions Best in France: Group EJ9

7. Client Expectations • The managers interviewed covered France, Benelux, the Nordic countries, and also had experience with the US and Hong Kong markets • Expectations are vastly different for French clients • More is expected ‘up front’– there is an expectation of meticulous planning before beginning projects, with a high stress placed on attention to detail • Project timeframes are longer, and testing periods themselves tend to be longer than in other countries • French customers take time to approve new business partners aiming to have long term relationships. • The decision to partner is usually taken by a team, and not just by the CEO or CIO Best in France: Group EJ9

8. Why France? • The French market for IT services has grown significantly in the last 5-10 years • Infosys has a desire to be a major player in the European market, and France represents the 3rd largest market • Infosys has ‘historical’ connections to France – its once largest client in the early 80s was based in France, and it has maintained an operational presence here ever since • Infosys opened sales offices in France in 2000 • Infoys showed growth in sales 100% every year and expect 60% sales growth for 2006. Best in France: Group EJ9

9. Approach to International Expansion Why? • Infosys has a long-term objective to increase revenues from Europe, in order to decrease its dependence on the US (which currently provides 2/3rds of revenues) • In 1998, European revenues were only 7%, now they are 23% Best in France: Group EJ9

10. How? • Upfront , one sales person explores the new market, meets key clients and makes 3-5 business plans • When the new business in France was opened: • Infosys partnered with E&Y for legal and administrative services • HR Central office in Germany was used for resourcing; HR was outsourced to headhunters for senior positions • Infosys continued to build awareness through advertising, breakfast meetings, fairs and other events Best in France: Group EJ9

11. Adaptations in France • Infosys believes there are no fundamental value differences between the company and French clients • Indeed, in general the two cultures are a very good fit: • France has a strong tradition of academic excellence, attention to detail, and technical and engineering savvy • Infosys also has a reputation for these same values, as such this ‘cultural technical’ focus matches very well Best in France: Group EJ9

12. Infosys uses translation services where necessary to solve the language issue (however they feel they do not yet have access to 90% of the French market due to the lack of French speakers) • Infoys want to hire more French speaking people • For example, it created a large software development and delivery center with 100 people in Mauritius in 2003, mostly with the goal of building up its francophone ability • Infosys has created some offerings specifically to address the needs of the French market Best in France: Group EJ9

13. Employee Integration • Most local hires are managed by Indian or French managers, or Indian managers who have been in France for 10-12 years • There are differences in the way people work at Infosys (typically a lot of remote work via e-mail and telephone), compared to the more traditional way of doing business in France (face-to-face meetings, for example). • This did not pose major problems, however, and the common ‘tech-savvy’ cultures overcame these issues Best in France: Group EJ9

14. There are just under 100 employees working from Paris for Infosys (not including expatriate consultants) • The French Infosys workforce is made up of about 60% local hires and 40% Indian hires • For Indian employees transferred to France, while they are subject to a convention collective, they have a tendency to work longer hours than their French colleagues • Thus there can be different management expectations for the Indian and French employees Best in France: Group EJ9

15. Infosys offers extremely competitive pay-rates to its French-based employees, since it applies its global compensation policy consistently (calculating salary from a base pay which is a function of local cost of living, with an added fixed-percentage savings goal on top). • Infosys has not found it difficult at all to find highly qualified local talent to meet its hiring goals Best in France: Group EJ9

16. Of all of the managers hired locally, about 20% do not integrate • Difficulty in adjustment usually results from the different working model (the fact that the bulk of work is done in India, with contact via e-mail or phone) • Some managers have had difficulty adjusting to remote work and as such have not been able to succeed at Infosys Best in France: Group EJ9

17. Communication in France is mostly face to face • Infosys is global company present in several time zones; oral communication is minimized, most is through e-mail. There is not so much informal personal interaction • In India, the organization is more hierarchical, in France the internal structure tends to be more informal • Training and regular team building conventions are held in India Best in France: Group EJ9

18. Challenges in setting up an office in France • Difficulties did not arise around the administrative / legal aspects of set up • Infosys found extremely capable local firms able to assist with administration, tax, and infrastructure set-up issues • The greatest challenge was in fact the difficulty of generating new business in France • It was challenging for a foreign company to establish a strong foothold in France, with a relatively conservative marketplace Best in France: Group EJ9

19. Information Technology services is a highly competitive sector – with 3000 existing IT services firms operating in France (e.g. Altran) • It was difficult to convince potential clients to trust a newcomer, and to risk change • It required sales effort and resources to promote the Infosys image and commitment • Infosys had to Handle with care the human relationship with new customer and build the trust • Infosys used personal contacts to established new relationship Best in France: Group EJ9

20. Techniques used to overcome this challenge were: • build awareness – discussions, meetings, PR campaigns, use small customers for references to larger clients • target international rather than francophone subsidiaries of potential clients – e.g. banking, did not approach retail level, but national • focus on international companies which might be more amenable to new technology consulting services Best in France: Group EJ9

21. However, even this approach has difficulties: • The focus on international accounts, which sounds great in theory, can be problematic in practice • It can be difficult to penetrate a French subsidiary of an international company, even if Infosys has existing relationships with its US parent • This is especially true for large companies which have grown organically through acquisition • As an example, take Schneider Electric (which has 30% of its business in France, 30% in the US, and 40% in other countries). Its information systems are not integrated internationally, so having relations with the US does not really help in developing business with France Best in France: Group EJ9

22. The Costs of coming to France • The costs to Infosys of French employees is indeed higher than many other countries • Other organizational costs (travel, real estate) are comparable to other western countries • There have been no real extra costs associated with language adaptation since most of the projects have been developed in English • Overhead costs tend to be high (to use external services for administration, for example) Best in France: Group EJ9

23. Key benefits of French location • Transport and infrastructure • Time zone • Quality of life • Employee satisfaction • Market potential Best in France: Group EJ9

24. Advice for companies considering entering France • It is important that company management be aligned as to the realities of the French market, and that it sets its expectations appropriately (and not necessarily compared to other western markets) • Management must be aware that timelines need to be longer to establish business and growth, and that the investment is for the long-term • … this can also be the advantage – once business is won, it is likely to be long-lasting Best in France: Group EJ9

25. Thoughts on Infosys’ future in France • French companies are being forced more and more to compete on the international scene in order to grow (LVMH in Japan for example) • They will need cost-efficient technology services, such as those offered by Infosys, to be able to compete effectively • As such, Infosys is optimistic about growth in the French market • Growth has already been over 90% per year, and this is expected to increase markedly this year Best in France: Group EJ9

26. Managers Interviewed • Prakash Chellam (European Business Development Manager) 12 Avenue de l'Arche 92419 Courbevoie Cedex Paris , France Phone: +33 (1) 46 91 84 56 Email: prakash_chellam@infosys.com • Pascal Beignon (Client Manager for France) 12, Avenue de l’Arche 92419  Courbevoie  Cedex Direct +33 (0) 1 46 91 84 76 Email: pascal_beignon@infosys.com Best in France: Group EJ9