Infosys cuts Emirates deal - CIOL News Reports

Infosys cuts Emirates deal

This contract has most likely moved to either TCS or Microsoft

Akanksha Prasad

Tuesday, May 04, 2010

BANGALORE, INDIA: Emirates Group is said to have taken back the three-years deal from Infosys Technologies on mutual understanding between the two parties.

CIOL has learned from the sources close to the contract that early March 2010, Mercator, the Dubai-based business technology provider and Emirates Group subsidiary pulled off the project from Infosys Technology, because of delay in building the modules for the client.

This project has most likely moved to either TCS or Microsoft.

According to information that CIOL has, Infosys was supposed to submit the first module of the application within three months, which got delayed by six months. This further hindered the development of preceding modules leading to Mercator's ire. Furthermore, Infosys had asked for an extension of the deadline of the first release of the application till March 2011, but the release date provided was August, 2009.

The spokesperson at Infosys, TCS and Microsoft, however declined to comment calling it a market speculation.

From their (Infosys) side, the IT major requested the client about incapability to deliver the module in the short span. The contract was roughly worth Rs. 90 crore. It involved a team of some 60-70 employees, based in Chennai. It is said that a special team was sent from Bangalore to work on the design.

An Industry analyst shared that loosing a client is a normal scenario. Usually, in order to get a project, companies tend to bid at lower Service Level Agreement (SLA) rates. Later on during the implementation stage, lower rates forces them (companies) to confine the teams strength. The analyst opined that it is a responsible approach to keep the client in communication and let him go, if delivery seems difficult.

Infosys got this deal to establish an Offshore Development Center in November 2008. This center, located at the Infosys campus in Chennai, was supposed to develop and maintain systems to support business-critical functions for its (Emirates) customers worldwide.

Infosys had clearly mentioned in the annual reports that it has lost 4 active clients over the year. It added 141 clients during the fiscal year that ended March 2010, as against an addition of 156 clients in the previous fiscal.

(Imagine you are Infosys CEO, would you have preferred to walk out of the project which you started? Do you think such acts will decrease clients' confidence in your company? Is Infosys too big to meet with this kind of a failure which is apparently a result of low bidding done to ward off competition and keep a client?)

©CyberMedia News

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inside_party said on 5/8/2010 6:34:07 PM:
Infy had bid low. They do not have credible domain experience in Travel & Transportation. Emirates IT decision makers are also to blame. They go by lowest bid and transfer all liability to provider.

to inside_party

bob said on 5/7/2010 2:43:18 PM:
Classic case of the Marketing and Sales Contract team(Pure MBA without any sofware development experience) cutting loose without any expertise in software dev estimates

to bob

Lakshya said on 5/6/2010 7:17:42 PM:
Such things will happen for all the companies and kind of information will not reach to the outside world unless someone publish.

to Lakshya

nandini said on 5/6/2010 10:19:44 AM:
s

to nandini

Pooja said on 5/5/2010 3:33:12 PM:
Will Infosys provide more details on this?

to Pooja

Antony said on 5/5/2010 12:25:26 PM:
Looks like Infosys has not done its homework before they took this project

to Antony

Jeevan said on 5/5/2010 11:58:40 AM:
Any deal should make a business sense. If Infosys is walking out, I dont see any issue in this. I think Infosys has all right to withdraw the project. No will do business to incur loss.

to Jeevan

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