Are services companies going insane? Berkeley Innovator_20060208_vf_Pratt Copyright © 2006 by...
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Are services companies going insane? Berkeley Innovator_20060208_vf_Pratt Copyright © 2006 by Infosys Consulting, Inc.
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Transcript of Are services companies going insane? Berkeley Innovator_20060208_vf_Pratt Copyright © 2006 by...
Are services companies going
insane?
Berkeley Innovator_20060208_vf_PrattCopyright © 2006 by Infosys Consulting, Inc.
Berkeley Innovator_20060208_vf_PrattCopyright © 2006 by Infosys Consulting, Inc.
“Insanity: doing the same thing over and over again and
expecting different results.”
Albert Einstein, (attributed)US (German-born) physicist (1879 - 1955)
Source: Quotationspage.com
Berkeley Innovator_20060208_vf_PrattCopyright © 2006 by Infosys Consulting, Inc.
19261914
Inflection points of Services Companies.
1980
Adapted from an original illustration, F. Clark Howell, Early Man (New York: Time-Life Books, 1968), 41-45.
Berkeley Innovator_20060208_vf_PrattCopyright © 2006 by Infosys Consulting, Inc.
Maybe we’re not going insane.
Maybe we just need a new model.
Berkeley Innovator_20060208_vf_PrattCopyright © 2006 by Infosys Consulting, Inc.
19261914 2004
Fourth inflection point of Services Companies.
1980
Adapted from an original illustration, F. Clark Howell, Early Man (New York: Time-Life Books, 1968), 41-45.
Berkeley Innovator_20060208_vf_PrattCopyright © 2006 by Infosys Consulting, Inc.
The business world abuzz about Globalization, Global Talent, Flat World, China, India.
Berkeley Innovator_20060208_vf_PrattCopyright © 2006 by Infosys Consulting, Inc.
What is the Flat World?
Traditional barriers diminished
Hierarchies less important
Information asymmetries minimized
Consumer comfort with technology
Ubiquitous access to technology
Opening of emerging
economies
Structural shifts in global demographics
Berkeley Innovator_20060208_vf_PrattCopyright © 2006 by Infosys Consulting, Inc.
Big New MarketsGDP of emerging countries
growing as a % of World GDP
China
India
Country GDP as % of World GDP
0%
1%
2%
3%
4%
5%
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
Eastern Europe
Russia
Sources: UN World Investment Report 2005; Forbes Magazine 2005, 2006; Infosys analysis
13.0%
14.9%
0%
5%
10%
15%
20%
2005 2006
Growing % of companies in Forbes Global 2000 from emerging economies
Berkeley Innovator_20060208_vf_PrattCopyright © 2006 by Infosys Consulting, Inc.
Labor Force Necessity
Aging workforce in developed countries
45%
50%
55%
60%
65%
70%
1995 2000 2005 2010 2015 2020
China
India
USA
Germany
Working population as % of total population(ages 20-64)
Sources: U.S. Census Bureau International Database (www.census.gov/www/idbpyr.html); McKinsey Global Institute; Infosys analysis
25
3632
42
0
10
20
30
40
50
Germany US China India
Annual Number of engineering graduates (thousands)
Talent pool and customers
0
200
400
600
China India US
Median age of citizen/customer
Berkeley Innovator_20060208_vf_PrattCopyright © 2006 by Infosys Consulting, Inc.
Connecting Technologies
Rapidly declining technology costs
0%
10%
20%
Russia Brazil China India
2000
2005
Internet usage penetration
World ave.
World ave.
Sources: A.G. Edwards 2006; Infosys analysis
Developing countries catching up in technology usage
Berkeley Innovator_20060208_vf_PrattCopyright © 2006 by Infosys Consulting, Inc.
How to Win in a Flat World.
Berkeley Innovator_20060208_vf_PrattCopyright © 2006 by Infosys Consulting, Inc.
How to win as a services company…
Loyalty through good service
Loyalty through faster innovation
Spending money on information
Making money from information
Dread the “China Price” Be the “China Price”
Winning in the straightway Winning in the turns
SHIFT FROM SHIFT TO
Berkeley Innovator_20060208_vf_PrattCopyright © 2006 by Infosys Consulting, Inc.
Consulting
Profession
Skeptics Rebelsvs.
Berkeley Innovator_20060208_vf_PrattCopyright © 2006 by Infosys Consulting, Inc.
He get’s the Executive of the week parking spot.
Berkeley Innovator_20060208_vf_PrattCopyright © 2006 by Infosys Consulting, Inc.
Berkeley Innovator_20060208_vf_PrattCopyright © 2006 by Infosys Consulting, Inc.
Consulting profession as a case study.
Berkeley Innovator_20060208_vf_PrattCopyright © 2006 by Infosys Consulting, Inc.
Management Consulting Firms• Advisors• Business Experts• On-site - High Cost• High Quality Ideas
Management Consulting Firms• Advisors• Business Experts• On-site - High Cost• High Quality Ideas
Systems Integrators • Do-ers• IT Experts• On-site - High Cost• High Quality Project Mgmt.
Systems Integrators • Do-ers• IT Experts• On-site - High Cost• High Quality Project Mgmt.
Off-Shore Software Engineers• Do-ers• IT Experts• Off-site - Low Cost• High Quality Technology
Off-Shore Software Engineers• Do-ers• IT Experts• Off-site - Low Cost• High Quality Technology
New Business Consulting Firm • Advisors + Do-ers• Business + IT experts• On-site + Off-site• High Quality Business Results• Lower Cost
New Business Consulting Firm • Advisors + Do-ers• Business + IT experts• On-site + Off-site• High Quality Business Results• Lower Cost
Old Model
New Model
Berkeley Innovator_20060208_vf_PrattCopyright © 2006 by Infosys Consulting, Inc.
Infosys competing as a flat world leader.
24 months ago
25,000
25%
$15B
Today
60,000
26%
$26B
Berkeley Innovator_20060208_vf_PrattCopyright © 2006 by Infosys Consulting, Inc.
Think Flat.Questions, please.
Stephen PrattCEO & Managing Director
Infosys Consulting, Inc.
www.InfosysConsulting.com
