INFOSYS TECHNOLOGIES

LTD GROWING SHARE OF A

CUSTOMER

Prairie Four Square Insurance Proposal

Presentation to Prairie Four Square Insurance to Implement
Arabia e-Procurement System

Presented by:

Aditi Sharma - 08PGDM-PT 04

Amandeep Singh - 09PGDM-PT 02
Ashwini Sinha - 09PGDM-PT 10
Divay Makkad - 09PGDM-PT 16
Prashant Akhawat - 09PGDM-PT 28
Background

 Company: Infosys Technologies Limited

 Year of Formation: 1981
 Business: IT and Consulting Services
 Employee Strength : 17000
 Geographical Presence: 8 Dev. Centers and 24 Marketing offices
 Annual Sales : $ 750 million.
 Net Profits : $200 million
 BCP/DR Facility: Mauritius
 Chairman: Narayana Murthy
 Vision: “To be a globally respected corporation that provides best-of-
breed business solutions, leveraging technology, delivered by best-in-
class people.”
 Mission: “To achieve our objectives in an environment of fairness,
honesty, and courtesy towards our clients, employees, vendors and
society at large.”
 Often termed as “Microsoft of India”.

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Prairie Four Square Insurance

 Total IT Spend of PFS : 1 billion USD

 Current Revenue of Infosys by PFS: $ 30 million
 Total Project at of Infosys at PFS: 65
 PFS is leading providers of individual life, group life, medical, dental, and
long term care and disability insurance in the US.
 Mission statement: to provide reasonably priced, reliable, long term shelter
and security for families.
 Customer perception: fair prices, personalized, friendly service, reliable in
the time of need.

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Five Year Track Records

Projects Cost Savings ($)

Reengineering Projects Assignment 33,600,000

Data Corruption Prevention Subroutine 518,060

Record Comparison Algorithm 43,200

Reduction in Disability Claims Reserves $2,800,000.00

 Total Cost Saving 36,961,260

Total Saving of 37 million USD in 5 years.

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Saving to PFS from re-engineering Projects
Total
Costs of Project
No. of FTTE Cost if the
Projec ($)/month project
t for No. of Total Project personnel
Perso project FTE No. of Cost in are divided
nnel Costs of staff workin FTE client in US and
Requir FTTE based in g in working country/pm India/ pm Savings/m Annual
Year ed ($)/month India the US in India ($) ($) onth ($) Savings ($)
1                  
2 250 8,000 3,200 250 0 2,000,000 2,000,000 0 0
3 250 8,000 3,200 75 250 2,000,000 1,400,000 600,000 7,200,000
4 250 8,000 3,200 75 100 2,000,000 920,000 1,080,000 12,960,000
5 250 8,000 3,200 75 100 2,000,000 920,000 1,080,000 12,960,000
          150        
Total
Savings
in Four
                Years 33,120,000
Savings
to other
PFS
                projects 480,000
                  33,600,000

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Savings to PSF Data Corruption Prevention Subroutine

No. of incidences
Time of corruption per
Cost Heads Number (hours) FTE ($) annum Cost ($)
Programmers 3 4 45 24 12,960

Technical Support
Person 1 1 40 24 960

Idled employees 125 4 42 24 504,000

Reconstitution of the
corrupted data
(seconds) 1 15 0.39 24 140
          518,060

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Summary of Savings to PSF as a result of maintaining a small
Disability Claims Reserves & Records Comp. Algorithm

Disability Claims Cost of

Year Reserve Capital Total Savings
1 14000000 10% $1,400,000.00
2 14000000 10% $1,400,000.00
Total
    Savings $2,800,000.00

Saving of PSF due to Record Comparison Algorithm

Cost Heads Number Amount ($)

Penalty for non-compliance to Insurance Commission
norms 1 360,000
Expected payoff   43,200

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Average Performance Metrics on Maintenance Projects – 5 yrs

Parameter Performance Dimension PFS Target Infosys Result

requests delivered with zero
Quality defects 90.00% 97.10%
delivered defects per 1000
person hours 4.9 3.2
requests delivered on time
Timeliness   91.00% 99.60%
efforts estimation accuracy
  83.00% 98.10%
Uptime on Infosys maintained
systems 94.00% 99.90%
Reliability Abnormal ending of program ratio
across Infosys maintained
systems 1.80% 0.20%

1. 56% Record comparison efficiency

2. Reduced processing time: Estimated to around $200 per workstation
3. Enhanced Productivity by additional processing of 18000 jobs
4. Streamlining and re-engineering claims submission process as well as claims payment
process leading to 10% reduction in cost of capital on the cash reserves.
5. Resource Reduction and no extra charge.

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Competitive Analysis

Strengths of Infosys Competitors - Excalibur and

Merrimac
Well versed with PFS Systems having worked Tendency to work on huge/grand projects
on more than 65 projects in last 5 years. which indicate that micro level details might
get overlooked.
Proven quality, reliability and timeliness. Non-competitive labor rates
Exposure in maintenance work will lead They have a tendency to avoid low value
shorter ‘learning curve’ thus leading to and low profit projects.
efficiency and productivity.
Recruitment of highly talented peoples from Apprehensions in mind of PFS people
the top consulting firms as well as from the top about low ball price quote from the 2
B-Schools worldwide. consulting firms.
Strategic move to strengthen skills of
consulting resources by in-house trainings to
secure higher value added and profit business.
Experience with Ariba project with an
achievement of cost saving of $100,000.

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Project Proposal

 Project to be implemented in multiple phases

 Purchasing Process Redesign
 Vendor Selection and Training
 Package Customizations
 Integration with PFS Enterprise Requirement Planning system.
 Installation and “burn-in”

Cost of Implementation : $2 million

Maintenance Per Annum : $18 million

Why Infosys ?

Infosys was able to provide benefit of 37 million USD in last 5 years to PFS
already and has proven itself in Cost, Quality, Reliability and Capabilities.

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Infosys benefits

 Infosys had initiated 3 end to end e-Procurement System Ariba projects

within an year (2 retailers and 1 healthcare).
 Incase of Healthcare Infosys was able to achieve saving of $100,000 per
year by switching the company’s change order procedures.
 Support from Infosys senior management by assigning team support
including Enterprise Solutions Group.
 Proven quality of Infosys at PFS.
 Experience in BPR with in-depth knowledge of micro level.
 Experience with Data Corruption Prevention and productivity improvement.
 Innovation and Business Process Understanding.
 Sole Sourcing benefits.
 Great leadership of Infosys.
 Elimination of non core activities
 Pool of knowledge workers and experts
 Improved quality due to process orientation
 Proven track records

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Value Analysis – 3 Strong Business Drivers

Reduce Operating Costs

Reduce Capital Investments

Cost
Key Cost Related Lesser Learning Curve and Experience with Arabia
Drivers Downsizing Requirements
Intelligence in Competitiveness

Focus on Core Business

Compentency Focus
Gain Access to technology and not in company
Customer Loyalty
Key Competency Gain Access to needed Skills
Related Drivers Create additional Capacity and backup capabilities.
Experience with Ariba e-Procurement Project
Aligh with Policy/philosophy/ culture

Increase flexibility and responsiveness

Increase Speed to market
Key Revenue
Revenue

Improve quality
Related Drivers Meeting SLA
Reduce customer response time
Revenue growth

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KT Time Cost Saving

The total knowledge transfer time that PFS can expect to save from sole sourcing the
Ariba e-procurement Systems project is as below:
 
No. of programmers required: 5
Time required to train programmers on Ariba e-Procurement system (installed by another
vendor): 3 months
Cost of hiring the programmers: $8000 per month (client location: Dallas, US rates
apply)
 
Total savings: 5 x 3 x 8000 = $120,000

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