Infosys is making a bold move into the U.S. business consulting market by acquiring major talent from established practices. This approach should enable Infosys Consulting to rapidly gain market credibility and presence.
On 8 April 2004, Infosys, one of the largest Indian-based IT services, announced plans to create a new U.S. subsidiary called Infosys Consulting, in a move designed to help Infosys expand its business consulting revenue, particularly in the United States.
The creation of a U.S.-based consulting company is a major step forward in Infosys' long-term strategy of presenting itself as a global service provider. Infosys' $20 million investment in this subsidiary is designed to send a clear signal to the marketplace that Infosys is differentiating itself from its Indian competitors, and intends to compete for business consulting services with the traditional consultancies.
Infosys has tried several times to establish this type of business consulting practice India, with only limited success. The way Infosys has approached the problem this time — acquiring a large number of recognized industry leaders from established consulting firms — will likely enable the new company to quickly establish brand identity and market credibility.
Infosys Consulting faces significant challenges, including the need to:
Rapidly hire the right mix of talent
Build methodologies that ensure tight alignment and seamless delivery between Infosys Consulting and the Infosys technology pool
Align with Infosys' industry teams and its recently reorganized practice area
Successfully integrate Infosys' legacy consulting expertise
Leverage Infosys' client base to quickly establish business relationships with a select group of high-profile clients
Quickly alter the company's established market perception as a pure-play IT services provider
Despite such challenges, Gartner believes many more offshore IT service providers will follow Infosys' lead. By the end of 2004, a number of offshore firms will seek to emulate the strategy of delivering a domestic consulting offering within the U.S. enterprise market (0.7 probability).
Recommendations: Infosys Consulting clients and prospects should leverage what is likely to be intense competition from the established U.S. consultancies. Clients who engage Infosys Consulting should demand more than the usual amount of attention from senior leadership as Infosys Consulting works to ensure early success in client engagements.
Analytical Sources: Frances Karamouzis and Lorrie Scardino, Gartner Research
Recommended Reading and Related Research
"Vendor Rating: Infosys Technologies" — To remain competitive, Infosys must differentiate itself, build brand equity and expand its geographic reach. By Frances Karamouzis and others
"The Impact of Offshore Sourcing on ESPs " — ESPs (external service providers) worldwide are responding to client demand for lower-cost offerings. By Frances Karamouzis
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