Vendor assessments

Analyzes Unnisys' offerings and capabilities in virtual desktop services.

This NelsonHall Key Vendor Assessment of Infosys of 87 pages.

In 2011 Infosys completed a structural reorganization which gives the company a stronger vertical focus, and will continue the drive to:

• Increase its capabilities in IP-based and outcome-based service offerings such as the growing 'Infosys Edge' family
• Develop its ability to nurture client relationships and convince clients that it can bring innovation and business insights to their business.

The catalyst for this change has been to support its new positioning of a provider of solutions and services to clients based on "Building Tomorrow's Enterprise".

Elements of the reorganization included:

• Aligning by vertical to become closer to the client. Infosys is now organized into four Industry Sector Units which are the primary go-to-market.
• Consolidating the service offerings into three 'Service & Innovation Groups'.

Each Industry Sector Unit has a practice lead and embedded teams for each of the service line groups. The Units have sales and delivery capability and client ownership across Infosys offerings. As such this is a major evolution from a geographic and discrete service line focus.

The company has also changed its name from 'Infosys Technologies' to 'Infosys' to reflect its evolution from its foundations in technology services to being a business-led consulting and solutions provider.

There may be smallish acquisitions to bring in vertical domain capabilities and an established client base in these areas.

Having combined all the service lines into the Industry Sector Groups is enabling Infosys to go to market with more strongly integrated offerings, for example, bundling IT infrastructure management with application management (a bundling seen in the two $500m outsourcing deals signed in fiscal Q3 2012) or testing services with application development services.

This comprehensive NelsonHall Key Vendor Assessment for T-Systems consists of 54 pages.

T-Systems is included in the Deutsche Telekom AG group-wide 'Fix, Transform and Innovate' three-year strategy for 2010 to 2013.

T-Systems' priorities and financial targets in each phase include:

• Fix: sorting out execution problems on some major contracts, increasing profitability and defending the base business. Target: 7% EBIT margin
• Transform: winning additional contracts in cloud computing, mobility, collaboration, security & governance, and sustainability. Target: €2bn in new revenues
• Innovate: develop offerings around Deutsche Telekom's 'Intelligent Network Solutions' or "speed boat" areas in energy, health, 'connected car', and media & distribution. Target: €1bn in additional revenues by 2015

T-Systems' financial performance in 2011 indicates that, two years on, the company has made little progress:

• The company has yet to increase its profitability. Q1-Q3 2011 adjusted EBIT margin, was 1.9%, compared with 3.0% in the prior year period. In early 2010, T-Systems had guided on increasing its adjusted EBIT margin to 6.5% in 2011
• Revenue growth in Q1-Q3 2011 was 3.3%
• Guidance for 2012 includes marginal revenue growth and a stable EBITDA margin.
• The "speed boat" offerings represent <€100m in revenues, or ~1% of total revenue.

The failure of Deutsche Telekom to sell T-Mobile USA to AT&T (the intended sale, announced in January 2011, was expected to bring in $25bn in cash means that acquisitions are now unlikely.

Issues that T-Systems is looking to address by end 2013 include:

• Service quality
• Asset utilization
• Productivity
• Cost structure.

This NelsonHall Key Vendor Assessment for Steria consists of 74 pages.

By size, Steria is a second tier European IT services provider, However, following a number of large outsourcing wins in different service lines and geographies (Cleveland Police Authority, BPO; Chorus project, AM; SFR, IT IM), Steria started 2011 increasingly confident in its ambitions, positioning as a significant European IT services vendor deemed to be eligible to compete for international framework agreements and taking the prime contractor position in large deals that involve transformation. After years of slow and steady margin improvement, there is now an explicit focus on revenue growth and gaining market share in the European market. However, market conditions in 2011 were not ideal for Steria, given its reliance on project based services.

In its attempt to position as a transformation partner, Steria emphasizes its following attributes:

• Local proximity to its clients in Western Europe
• Industry-specific knowledge in its targeted verticals, and expanding business solutions portfolio
• Sizeable offshore (and growing nearshore) capabilities, with a track record in integrated service delivery
• Flexibility, and a collaborative approach, focused on clients' business outcomes
• The range of its services portfolio, from IT and process consulting, through its BI and SAP and Oracle capabilities, to its operational capabilities
• Its technology independence.

NelsonHall's Key Vendor Assessment for Tata Consultancy Services consists of 104 pages.

In its fiscal year 2012 (ending March 31, 2012), Tata Consultancy Services (TCS) is likely to surpass $10bn in revenue while maintaining a margin of around 27%.

The company has a long term goal of reaching $20bn in revenues, while maintaining margins. To support this ambition, TCS is:

• Continuing to enhance its offerings portfolio, investing in high growth areas where it can re-use software assets
• Promoting its ability to provide bundled integrated services and to help clients with innovation
• Targeting opportunities in growth markets: IberoAmerica, India, Asia Pacific and MEA combined contributed 21.3% of global revenues in FY 2011, ~$1.7bn
• Investing on expanding its footprint in Continental Europe: progress to date is significant and revenues from the region are now ~$1bn, but TCS may well acquire for scale
• Hiring >1,200 local personal in the U.S. this fiscal year
• Continuing to expand its delivery network in other low cost regions as well as india, notably China
• Increasing its focus on expanding its presence in sectors such as utilities and the public sector.

The recently signed BPO contract with Friends Life in the U.K., with service delivery due to start in March 2012, is the largest L&P BPO contract ever awarded, and by some margin.