Focusing On: Software Application TCO

Software Magazine, Feb, 2000

Infosys' rigorous approach to development, combined with its Global Delivery Model, skillfully balances competing requirements to achieve maximum value for customers

Balancing the objectives of time to market, software quality, and staying within a budget is today a trickier black art than ever before. However, interviews with industry analysts and experts suggest that the critical components of software application total cost of ownership (TCO) include:

* Making the architecture open and getting it right;

* Having a strong requirements management process;

* Having a global delivery system that can leverage competitive labor rates; and

* Having a high quality and thus low defect rate.

One IT services company in particular that emphasizes these four components of software application TCO is Infosys Technologies Ltd. Founded by seven software professionals in 1981 in Bangalore, India, Infosys has become the Indian version of a successful Silicon Valley startup. After a series of economic reforms were achieved in India in 1991, Infosys moved at a fast pace, creating an employee stock option plan and going public on three of the nine Indian stock exchanges in 1993. Infosys also became the first company ever to list on a U.S. stock exchange (Nasdaq: INFY) in March of 1999, and as of mid-February 2000, enjoyed a market cap of over $20 billion. The company is ISO9001 certified and in 1999 was also assessed at Level 5 of the Capability Maturity Model (CMM), developed by the Software Engineering Institute (SEI). That is the highest level of software development discipline that the SEI model recognizes.

"We concentrate on a lower total cost of ownership of software applications for our clients," said Phaneesh Murthy, senior vice president of worldwide sales and marketing for Infosys, with its U.S. headquarters in Fremont, Calif. The Level 5 rating by the SET's CMM reflects the superior practices around code quality, architecture, and requirements management achieved by the company.

To optimize the cost of labor, Infosys uses a unique model of collaborative software development on a global basis, called the Global Delivery Model.

"When you do global software development, you need very strong project management skills," said Nandan Nilekani, Infosys managing director, president, and COO. "You have to have strong processes in place and a strong focus on both quality and defect prevention. Our Global Delivery Model requires us to have a lot of discipline and order in our software engineering. As a result, we're able to deliver good quality software on a timely basis to our customers."

Using this model, Infosys can deal with a scenario where requirements are done at a customer's site in New York City, the software development can be done in Bangalore, and deployment may take place in Thailand, for example.

"Because we can bring resources into this model wherever they are in the world, we don't have to physically relocate them," said Nilekani.

Moreover, different geographic locations let Infosys utilize time differences. By combining the prime time of their customers' staff in the U.S. and other markers with its staff in India, Infosys can run relays in problem solving and provide 24-hour productive days.

Infosys can reduce total cost of ownership by developing most of the software in India. In a typical project, about 20 to 30 percent of the work is delivered from the customer site, and 70 to 80 percent is delivered from India. "Because the cost of operation in India is lower, our cost structure is lower," said Narayana Murthy, Infosys chairman and CEO. "As a result, we can give better value for their money to our customers."

A NIMBLE AND FLEXIBLE ORGANIZATION

Infosys has a vast talent pool skilled in using the major application development platforms and products.

On engagements, lead Infosys architects work with the customer through the project lifecycle, helping on issues such as performance and scalability. Large-scale benchmarks are run to stress test the application and database servers before deployment. The Infosys teams build and re-use architectural component libraries on the popular platforms that provide the basic services required in any application. Development processes are tuned around the platforms and selected tools provide for build management, code generation, and standards-checking.

Infosys builds flexibility into its systems and thus anticipates change. For example, teams work on bleeding-edge technology in Infosys' labs so they are ready to phase them into customer engagements when required. "This makes the architecture framework evolve and adapt to the dynamically changing technology world," said D. Padmanabhan, an Infosys senior project manager and architecture expert.

From the point of view of one financial analyst who follows Infosys, the company is differentiating itself with its business model. "Technology is becoming the basis on which businesses compete today. It is core to the strategy of business and is no longer a supporting role. Infosys has a reputation for world-class quality. So having a partner like Infosys can be a key to success," said Bob Austrian, senior software analyst with Banc of America Securities, San Francisco.