Business transformation through technology

1. Business transformation through technology U. B. Pravin Rao

2. High Dell CapitalOne GE Business Value Created Walmart SKF AT&T NHS Pfizer Low High Technology Maturity Low Source: Corporate websites, Economist, Infosys Analysis IT Is a Powerful Enabler As Well as A Driver to Unlock Business Value

3. Open Governance Talent Magnet Performance-Ethic … And Such Business transformation Through Technology is the Center of Infosys’ Go-to-Market Position Today Elements Focus Architecture Go-to-market position … Client “Transforming business through integrated technology solutions. Absolutely, Positively!” (Emphasis on Value, Execution & Comfort factor) …executed through Integrated Capabilities Competencies Breadth & Depth of Integrated Service lines ( Meeting Clients’ full service Needs ) Domain Expertise ( What clients value the most ) Technology Excellence ( “In sync with the latest, at par with the best ) GDM ( Core Value Driver ) Prime & Partner-ship ( Single point accounta - bility while leveraging “partner web” ) Trust Based Senior Relation-ship ( Building comfort Factor ) One Firm Execution ( Global scale, single Face ) …and built on Fundamentals Values Company / Core

4. 1 – Manufacturing 2 – Telco 3 – Retail 4 – Retail 5 – Insurance

5. Case Study # 1: Developing a Roadmap for Transformation of Supply Chain by Leveraging e-Business Technologies • The Client • The European subsidiary of a leading global manufacturer of food-grain and agricultural chemicals • The Challenge • Need to reduce supply chain costs • Reduce the costs “hidden” in the extended supply chain • Integrate business with technology to improve effectiveness of supply chain • Benchmark against “best-of-breed” in industry • Need to achieve maximum impact from limited e-Business budget • Identify Quick Wins with short payback • Leverage latest technologies for communication and e-Business to achieve greater integration with vendors, customers and logistics & transportation partners • Better integration among internal systems to support and streamline supply chain processes • Build internal consensus regarding future direction

6. Define & prioritize initiatives to streamline the supply chain processes and create an implementation roadmap The Approach Synthesis Diagnosis Analysis Identify Quick Wins Define eBusiness roadmap Review ‘As Is’ Supply Chain and Initiatives Assess SCM Pain/ Opportunity Points Identify and Prioritize Initiatives High Level IT Architecture • ‘As-Is’ state for key supply chain processes • Inventory and description of identified initiatives • Benchmarking of supply chain e-maturity against industry peers • Business case analysis & payback calculations • Phased implementation roadmap including time, cost and resource budgets • SCM “pain points” and value creation opportunities • Key SCM trends & B2B focus areas • Prioritized initiatives and Quick Wins • High level IT architecture

7. Applications EAI Implement prioritized initiatives and build supporting architecture in phases • eSupply Chain Within the Organization • Reduce supply chain costs • Attain supply chain excellence • eSupply Chain With Business Partners • Lay the foundations of future growth The Response Enterprise Application Integration Production Scheduling Finished Goods Movement B2B with Suppliers B2B with Transporters Supply Demand Salesman Client Client Demand Transport Planner Extranet Territory Forecast & Plan B2B B2B Order to cash Order to cash Transport Plan Production Scheduling Application Transporters Suppliers Production Plan Applications identified

8. Savings Investments Payback in 15 months (Discount factor) NPV NPV Resulting in Over $ 2.5 M of annual benefits for $ 3.4 M of one-time investments The Benefits Annual benefits of over $2.5 Million Client Testimonial – CIO “We has a long history of working with large traditional consulting firms. However, the way Infosys worked collaboratively with our people and crafted a unique solution on business and technology aspects appealed to the Leadership Team.The benefits delivered by Infosys were very tangible.”

9. $1,000 • $900 • $800 • $700 • $600 • Million AUD • $500 • $400 • $300 • $200 • $100 • $0 Telco • Best • Development • Maintenance Case Study # 2 : A large Telco spent $300-400M1 more annually due to poor IT effectiveness compared to best-in-class organizations High Level Approach • Based on the data available and stakeholder interviews, Telco was assessed between Levels 1 and 2 on the CMM Maturity scale • Telco IT effectiveness was conservatively equated to “Average in Class” on the Capers-Jones productivity benchmarks scale • Capers-Jones Productivity benchmarks for the “Best in Class” were used to arrive at the extra spend ( based on current IT Delivery & Maintenance Budget2 ) • These estimates of expected overspend are based on IT Effectiveness and not on any unit cost differentials 1 Does not include Operations, Infrastructure, Internal IT staff costs 2 Current IT Delivery & Maintenance Budget excluding spend on Redundant applications $891 M

10. Reduction in investment spend Arbitrary cuts in budgeted expenditure … And faced the risk of being caught in a vicious circle of poor IT effectiveness due to continued business pressures Implication: Lower IT Effectiveness • Lesser money to invest in application rationalization • Lower investment in crucial infrastructure projects (without immediate benefits) • Cutting back existing implementation plans will have cascading effect on IT efficiency • Compromise on lifecycle activities that will reduce delivery reliability Likely Telco response Cut in discretionary IT Expenditure

11. We proposed a 3 - phased transformation program that would help Telco launch, consolidate and sustain improvements in IT effectiveness Launch & Enable Evangelize & Consolidate Rollout & Sustain 12 Weeks Medium Term (6 - 12 Months) Long Term (1 Year +) Application Portfolio • Create Inventory • Migration plan • Partial Migration to a lower cost base • Decommissioning completed • Consolidation of applications kicked off • Clear migration roadmap for the entire Telco portfolio • Rationalized portfolio Delivery Process • Process Definitions for some Project types • Run Pilots • Rollout to all of IS • Process definitions for all project types • Estimation Model definition • Rollout across Telco • Automated process management • Formal capability assessment • Define Metrics, Skeletal Org Structure, Governance Mechanisms, KPIs • Process Capability Baseline, Dashboard • Rollout to all of IS; Launch training • Metrics-Inventory (IRM) integration • Communicate • Rollout across Telco • Communication & Training People and Governance Investment Planning • Review IT budgets for next financial year • Ensure adequate investment in infrastructure elements • Institutionalize demand management processes • Monitor returns and effectiveness of prior investments

12. 350 250 Million $ 150 50 -50 3 6 12 24 36 Months Savings Investments The solution needs a cumulative investment of $50-80M over three years and can potentially yield annual benefits of $300-400M1 by the third year Rollout & Sustain Investment yields positive returns within one year Evangelize & Consolidate Launch & Enable Represent self-financing investments that yield benefits within the same period 1 Assuming that current annual spend will continue every year for baseline estimates

13. Case Study # 3 : Developing a New Supply Chain Blueprint for a Leading Apparel Company The Client • A leading designer, marketer & distributor of premium lifestyle products • Four categories of products – apparel, home, furnishings & fragrances • Brand portfolio consists of some of the world’s most widely recognized brand names • Net sales of USD 2.2 billion in FY 2001 The Challenge • Need to improve inventory productivity • Reduce the cash to cash cycle time • Reduce the total inventory in the pipeline • Need to reduce supply chain operations costs • Reduce the transportation costs • Reduce the manpower costs • Reduce the inventory carrying costs

14. Information Flow Inbound Logistics Outbound Logistics Warehousing Retailers Customer Design Suppliers Product Flow Supply Chain Execution Design and Development • Product design and development closer to demand • Adherence to design calendar Vendor Management • Vendor managed inventory • 100% compliant vendors Logistics • Cross dock of shipments • Leverage 3rd party / suppliers and customers logistics network • Automated and Integrated transaction systems across the supply chain and business divisions • Visibility to logistics and inventory data across the supply chain and business divisions • Common pool of inventory across business divisions Supply Chain Planning • Automated forecasting and planning systems across departments – merchandize planning, sales planning, production / capacity planning, inventory planning and allocation • Forecasting and planning by door • Integrated sales and operations planning across departments The ApproachMigrate to the “To-Be” state …

15. In-Process Initiatives • Moving from FOB to LDP/DDP • Vendor Compliance • Redesigning of Corporate Calendar • Web based ASN Capture Phase 1 Initiatives • Licensee VMI • Forecasting & Planning - Wholesale • Cross-Dock – Retail • VMI Stage I • 3rd Party Fulfillment • Key Performance Indicators • Logistics and Inventory Visibility Solution • Standardizing WMS Solutions across DCs • Forecasting & Planning – Retail Phase 2 / 3 Initiatives • Price Optimization Solution • VMI Stage II • Inventory Visibility and Order Processing at Stores • Streamlining Markdown Planning and Execution • Global Production Planning System • Transportation Optimization Tool • Global QA Module • KPI System Development • Corporate-wide Costing System(Product costing being evaluated to be moved to Phase 1) The Response … through implementing multiple initiatives …

16. The ResultsRecurring annual benefits of $24MM for one-time investment of $25MM

17. Case Study # 4 : Flawless Execution To Install Complex Financial System • Flawless Execution of Oracle Financials • Replace outdated financial system and build a foundation for future growth. • Increase flexibility & back-office efficiencies • Foundation for better controls and rules • More manageable chart of accounts • Greater reporting flexibility • A key milestone in Client’s business transformation • Foundation for integration with Retail Inventory and Merchandising systems • Relying on knowledge and expertise from 10-year old relationship to minimize business impact of the program. • One Of USA’s Leading Fashion Specialty Retailer • Over 100 years in business • 132 US Stores, located in 25 states • 23 International Boutiques, primarily in Europe • Online presence and direct mail catalogs “When I work with Infosys I don’t have to worry about them because they do not make promises that they can’t keep. They are committed to making us successful” CIO “Infosys’ Organizational Change Management Methodology, training and documentation ensured a successful transition” CFO

18. Case Study # 5: Partner To Create Transactional Web Site • USA’s leading provider of individual life insurance • Named by Fortune as the Most admired company in the world, in its category. • Providers of annuities, mutual funds, long-term care insurance, and disability income insurance. • Develop & launch an online funds transfer option • For variable life and annuity policy holders • Driven by business needs • 24x7 customer self-service facility • Lower reliance on customer service call centers • Extremely aggressive timeframe • Prototype development • Chosen based on prior experience of Infosys delivering high quality results on time and within budget • End-to-end Partnership • From design to building of the site • Delivered to extremely aggressive timeframe • Infosys originally hired in 1996 • Relationship started with Y2K initiatives • Extended to all IT projects “Infosys’ technological expertise and excellent execution were exactly what we needed to provide our customers the convenience of self-service and online confirmation of important transactions.” Vice President, Information Systems

19. Design For A Constantly Changing Business & Technology Environment Build Future-Proof Solutions That Enable A Continuous Evolution Of The Enterprise Leverage Current Investments in People & IT Infrastructure In Conclusion, Infosys’ Range Of Services From “Strategy To Execution” Helps In Partnering On Such Transformation Initiatives Client Needs For Business Transformation Design for transformation Institute Operational Excellence Build and Integrate Consulting Services Business & technology alignment Architecture & roadmap definition Enterprise IT Solutions Package and systems integration Custom software solutions IT Operations Management Applications management IT Outsourcing & maintenance Consulting & IT Services Technology Product Development Product Strategy Consulting Architecture & roadmap definition Feasibility and prototyping Product engineering Software development & integration Development & testing labs Product Support Outsourcing Product support centers Custom product enhancements Business Process Consulting Process modeling and redesign Continuous process improvement Process Change Implementation Process & IT reengineering Change management Business Process Management Outsourced process centers Shared services Business Process Management

20. Thank You