Infosys is India’s 2nd largest IT company and is also rated as 596th largest public company. It has built a reputation amongst its consumers and customers. Thus this makes us eager to know the business model of Infosys.
In this blog, we have given an in-depth study of the working business and revenue generation models of Infosys.
But, before we start with its business model let us know about Infosys as a company.
Infosys is an Indian multinational company that works mainly in the areas of information technology, business consultancy, outsourcing, and managed services. It was established in the year 1981 in Pune by a group of seven engineers, including Mr Narayan Murti. Today Infosys has its headquarter situated in Bangalore, Karnataka of India. Infosys is the 2nd largest Indian IT company after Tata Consultancy Services (TCS). The market capitalization of Infosys was $72.53 billion in March 2020.
Let us now dive into the business model of Infosys.
Business Model in Infosys
A business model helps a company in understanding its product segment, revenue model, etc which can help them get a wider idea about their business. Over the years Infosys has been the face of the Indian IT Sector. It’s Business Model carters 2 industries: IT Services & IT Consulting.
Let’s dive into some of those points which have made this business model of Infosys successful.
1. Initial business years
During the initial years, it only focused on the international market which was the US and Europe. It preferred to use the global delivery model(GDM). In the 1990s it only focused on a very small number of sectors like BFSI(Banking and financial services) and manufacturing.
It was able to grow so fast in the market only because it charged a lower premium than the other companies in the market like IBM and Accenture.
2. Continuous growth
It has been keeping its constant growth year after year in different ways like increasing the per capita revenue, visibility in the business, attracting the best clients, strategic investment, etc.
3. Products & Services segmentation of Infosys
- NIA is the Next Generation Integrated AI Platform.
- Infosys Consulting
- Infosys Analytics Platform
- EdgeVerve Systems which includes Finacle
- Panaya Cloud Suite
- Engineering Services
- Digital Marketing
4. Converting Clients to partners
It has been using a unique method to get quality partners that are turning its clients into partners. This has helped them grow their business in the long term. They have also been gaining large amounts of profits due to the remarkable investments made by their partners.
5. Infosys Worldwide presence
It has spread its branches all over the world making its services available in many different countries. It has its presence in different countries like United States, India, Europe, China, Australia, Japan, and the Middle East.
It has 116 development centres and 84 sales and marketing offices, 18 international offices making a massive existence of the company.
6. Brilliant Acquisitions
Finding opportunities and acquiring them at the right time is what Infosys is good at. It has acquired many companies which has lead to its growth. Some of which are Expert Information Services (Australia in 2003), McCamish Systems (Australia in 2009), Portland Group in (Switzerland in 2012), Skava (the USA in 2015), Panaya (Israel in 2015), and Brilliant Basics (the UK in 2017).
7. Revenue Model of Infosys
The Revenue Generation Model of Infosys is one of the leading and well-known IT development systems in the business. These are some of the revenue-generating activities:
- Improving Process – Saving time by incorporating new technologies and gathering data from external sources to benchmark Infosys’s performance against competitors. This is how they improve the process and generate more revenue.
- Driving more workforce – Shifting more work offshore acts as a powerful way to improve margins. In this way, they increase their revenue by driving more workforce.
- Increasing Reuse – With their ears of experience and knowledge management systems and Knowledge Currencies Units, Infosys has a higher edge against its competitors.
- Small Steps to Giant leaps – With their Center of Excellence(CEOs) within each of its business units, Infosys has funded projects of greater scale than within a single project.
- Quality Services – Infosys dealing with software services account for 95% of its revenues, its main assets are still its people who are the key element for their growth.
- Global Delivery Model – By excelling in strategic IT and professional consulting services, Infosys derives its 2/3rd revenue from the North American Market.
8. Key activities of Infosys
- Increase employee productivity by promoting reuse
- Use tools and methodology
- Develop new clients
- Offer new services to existing clients
- End-to-end service provider
In the study of the business model of Infosys, we have seen that it has a strong foundation in the market which it has achieved by using its initial business model methods. It also provides its clients with different services in the market. This helps it to grow in different fields. It has many different methods to earn revenue like driving more workforce, quality services, global delivery model, etc. Thus this makes us know that it has a large potential to grow in the market if it keeps improving in all its categories.
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