Infosys Australia sends more work offshore

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Infosys Australia sends more work offshore

Infosys Australia has revealed it is sending a greater proportion of its work offshore as it reported a decline in locally-accounted revenues.

Infosys Australia, the local operations of Indian-based outsourcer Infosys Technologies Ltd, has reported revenues of US$119 million for the 12 months to March 2009, down from the US$139 million tabled the prior year.

But Infosys Australia managing director Jackie Korhonen protested that the statutory results reported for Infosys Australia are not an accurate representation of the revenues the Australian operations of the Indian company earn.

"The way client projects work, if the nature of the work is local it is billed locally, if it is delivered from our parent company Infosys Technology Ltd it is billed there. I am measured on the combined revenues of both."

Korhonen refused to divulge the combined revenue figure, revealing only that by her calculations, the local operations grew by 22.3 per cent over the period.

If locally reported figures are dropping by 15 per cent, and the total revenues earned from Australia is growing at 22 per cent, it would indicate that an overwhelming number of Infosys' Australian customers are opting to send their work offshore.

"We have seen that as our clients mature, more have become comfortable with outsourcing more of their work to our global delivery centres [in India]," Korhonen confirmed.

In its earnings call, the global outsourcer revealed that 76.4 per cent of its labour was engaged offshore, the remaining quarter of the work done within the local operations of countries like Australia, up slightly on the 74.6 per cent split the year prior.

More of the work was being billed to the offshore office - up from 51.6 per cent in 2007/08 to 53.3 per cent in 2008/09.

New consulting and systems integration arm

Infosys Australia put a positive spin on the earnings figures by announcing its intention to form a new consulting and systems integration division within its Australian office.

Infosys Australia currently hires 341 staff in Australia, down slightly on the 366 on the books in December 2008.

But Korhonen said the local workforce will grow with the forming of the new consulting and systems integration division, which will be headed up by former Westpac and ING exec Robert Liong.

"We have started doing more transformational work for our clients, moving beyond traditional outsourcing work and application development, so we thought we would formalise that," she said.

"We have always sat in the second half of the product lifecycle. But now we are getting into the first half - the consulting, the linking of business strategy to IT."

On a global basis, Infosys Technologies Ltd earns over 40 per cent of its revenues from application development and maintenance.

Around 25 per cent of its revenues comes from consulting, a further 3-4 per cent from systems integration work. These ratios have remained more or less static since 2007.

Infosys Australia has begun advertising for two positions to lead the new practice - seeking a program director and principle business consultant to run its systems integration and consulting practice in Melbourne.

The IT services company is also hiring staff in Canberra and Sydney.


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