Analyst Meet

August 27, 2002

Living up to the promise
Business transformation through
technology
U. B. Pravin Rao
Analyst Meet
August 27, 2002
Slide 1
IT Is a Powerful Enabler As Well as A Driver to Unlock
Business Value
Case
Study
Business Value
Created
Technology
Driver/ Enabler
Dell
Greater
Organisation
flexibility
Internet based
value chain
collaboration
GE
Inter Enterprise
Cost
Rationalisation Marketplace
Capital one
Innovation (new
products)
Data Warehousing
and Mining
Walmart
Process
flexibility
Multi tier EDI,
Data Warehouse,
EPOS
SKF
Increase Scope
of
Service Remote Sensing
AT&T
Increased
Employee
Productivity VPN
Pfizer
Improved
Partner
Productivity
Knowledge
Management
Tools
NHS
Improve Quality
of Service
Knowledge
Management
Tools
Technology
Maturity
B
u
s
i
n
e
s
s

V
a
l
u
e

C
r
e
a
t
e
d

Dell
CapitalOne
NHS Pfizer
GE
AT&
T
Walmart
SKF
Source: Corporate websites, Economist, Infosys Analysis
Low
Low
High
High
Analyst Meet
August 27, 2002
Slide 2
Elements

Focus

Architecture
and built on
Fundamentals
Values
Company
/ Core

Open Governance
Performance-Ethic
Talent Magnet
Breadth
& Depth
of
Integrated
Service
lines

( Meeting
Clients
full service
Needs )

One Firm
Execution

( Global
scale,
single
Face )

GDM

( Core
Value
Driver )

Trust
Based
Senior
Relation-
ship

( Building
comfort
Factor )

Domain
Expertise

( What
clients
value
the most )

Technology
Excellence

( In sync
with the
latest,
at par
with the
best )

Prime &
Partner-
ship

( Single
point
accounta -
bility while
leveraging
partner
web )
Go-to-market
position
Client

Transforming business
through integrated technology
solutions. Absolutely, Positively!
(Emphasis on Value, Execution & Comfort
factor)
executed
through
Integrated
Capabilities
Competencies

And Such Business transformation Through Technology is the
Center of Infosys Go-to-Market Position Today
Analyst Meet
August 27, 2002
Living up to the promise

1 Manufacturing
2 Telco
3 Retail
4 Retail
5 Insurance

Analyst Meet
August 27, 2002
Slide 4
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

Analyst Meet
August 27, 2002
Slide 5
Define & prioritize initiatives to streamline the supply chain
processes and create an implementation roadmap
As-Is state for key
supply chain processes
Inventory and
description of identified
initiatives
Benchmarking of
supply chain e-maturity
against industry peers
SCM pain points and value
creation opportunities
Key SCM trends & B2B focus areas
Prioritized initiatives and Quick Wins
High level IT architecture
Business case analysis
& payback calculations
Phased implementation
roadmap including
time, cost and resource
budgets
High Level IT Architecture
Identify Quick Wins
Review As
Is Supply
Chain and
Initiatives
Define
eBusines
s
roadmap
Assess SCM
Pain/
Opportunity
Points
Identify and
Prioritize
Initiatives
Analysis
Synthesis Diagnosis
The Approach
Analyst Meet
August 27, 2002
Slide 6
Implement prioritized initiatives and build supporting
architecture in phases
Production
Scheduling
B2B with
Suppliers
Finished Goods
Movement
B2B with
Transporters
Enterprise
Application
Integration
B2
B
Suppliers
Order to
cash
Client
Supply Demand
Transpor
t Planner
Transport
Plan
Client
B2
B
Transporters
Order to
cash
Applications
EAI
Extranet
Territory
Forecast
& Plan
Production
Scheduling
Application
Producti
on Plan
Demand
Salesman
Applications identified
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
Analyst Meet
August 27, 2002
Slide 7
Resulting in Over $ 2.5 M of annual benefits for $ 3.4 M of one-time
investments
NPV 12.50%
3 Year 1123.2
5 Year 4024.1
Payback Period 2.2
NPV
NPV
(Discount factor) Projected Cashflows
1196
3390
2864
2773
2681
2536
629
629
629
629
0
1000
2000
3000
4000
2001 2002 2003 2004 2005
Year
V
a
l
u
e

i
n

'
0
0
0

U
S
$
Payback in 15 months
Investments
Savings
Annual
benefits of
over $2.5
Million
The Benefits
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.
Analyst Meet
August 27, 2002
Slide 8
Case Study # 2 : A large Telco spent $300-400M
1
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 Budget
2
)
1 Does not include Operations, Infrastructure, Internal IT staff costs
2 Current IT Delivery & Maintenance Budget excluding spend on Redundant applications $891 M
Development
$0
$100
$200
$300
$400
$500
$600
$700
$800
$900
$1,000
Telco Best

M
i
l
l
i
o
n

A
U
D

Maintenance
These estimates of expected overspend are based on IT
Effectiveness and not on any unit cost differentials
Analyst Meet
August 27, 2002
Slide 9
And faced the risk of being caught in a vicious circle of
poor IT effectiveness due to continued business pressures
Likely Telco response
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
Cut in
discretionary
IT Expenditure
Reduction in
investment
spend
Arbitrary cuts in
budgeted
expenditure
Analyst Meet
August 27, 2002
Slide 10
We proposed a 3 - phased transformation program that would help
Telco launch, consolidate and sustain improvements in IT effectiveness
12 Weeks Medium Term (6 - 12 Months) Long Term (1 Year +)
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
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
Review IT budgets for next financial
year
Ensure adequate investment in
infrastructure elements
Institutionalize demand management
processes
Monitor returns and effectiveness
of prior investments
Application
Portfolio
Delivery
Process
People and
Governanc
e
Investment
Planning
Launch & Enable Evangelize & Consolidate Rollout & Sustain
Analyst Meet
August 27, 2002
Slide 11
-50
50
150
250
350
3 6 12 24 36
Months
M
i
l
l
i
o
n

$

Savings Investments
The solution needs a cumulative investment of $50-80M over three years and
can potentially yield annual benefits of $300-400M
1
by the third year
Launch & Enable
Evangelize & Consolidate
Rollout & Sustain
Investment yields positive
returns within one year
1
Assuming that current annual spend will continue every year for baseline estimates
Represent self-financing investments that
yield benefits within the same period
Analyst Meet
August 27, 2002
Slide 12
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 worlds 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
Analyst Meet
August 27, 2002
Slide 13
The Approach
Migrate to the To-Be state
Product Flow
Information Flow
Suppliers
Inbound
Logistics
Warehousing Retailers Customer Design
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 3
rd
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
Outbound
Logistics
Analyst Meet
August 27, 2002
Slide 14
The Response
through implementing multiple initiatives
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
3
rd
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)
Analyst Meet
August 27, 2002
Slide 15
The Results
Recurring annual benefits of $24MM for one-time
investment of $25MM
Implementati
on Phase
Recurring
Annual
Benefits
One-Time
Investment
Pay Back
Period
Phase 1 $ 13 MM $ 11 MM 0.8 Year
Phase 2 & 3 $ 11 MM $ 14 MM 1.3 Year
TOTAL $ 24 MM $ 25 MM
Analyst Meet
August 27, 2002
Slide 16
Infosys Organizational Change Management
Methodology, training and documentation ensured a
successful transition
CFO
When I work with Infosys I dont have to worry about
them because they do not make promises that they cant
keep. They are committed to making us successful
CIO
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 Clients 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 USAs 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
Case Study # 4 : Flawless Execution To Install Complex
Financial System
Analyst Meet
August 27, 2002
Slide 17
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
USAs 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
Case Study # 5: Partner To Create Transactional Web Site
Analyst Meet
August 27, 2002
Slide 18
In Conclusion, Infosys Range Of Services From Strategy To Execution
Helps In Partnering On Such Transformation Initiatives
Build and
Integrate
Institute Operational
Excellence
Design for
transformation
Client Needs For
Business
Transformation
Consulting &
IT Services

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
Business
Process
Management
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
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
Technology
Product
Development
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
Analyst Meet
August 27, 2002
Living up to the promise
Thank You