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Infosys Company’s Outsourcing and Sustainability Case Study

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Updated: May 5th, 2021

Infosys is a multinational enterprise that is a major market player in the information technology (IT) sector. It focuses on providing a variety of IT, independent validation, and outsourcing services. The company develops software value chains with an emphasis on technological support and program creation. Meanwhile, Infosys Consulting is a subsidiary division of the Infosys corporation. It focuses on consultation within the spheres of IT, management, and business analytics. Infosys Consulting has a global client base which it offers advisory services to help develop and execute strategies, particularly within management and digital transformation realms, that are critical to innovative growth.

PESTEL

P – Political
  • Government oversight and legislative control
  • Tax code reforms
  • H1b visa legislation
  • Investigations into dependence on foreign workers
E – Economic
  • The demand for consulting services
  • Infrastructure quality and costs
  • Wage growth, inflation rates, and interest rates
  • Stability and efficiency of financial markets
  • Currency volatility
S – Social
  • Demographics of the workforce
  • Availability and education-level of highly-skilled workers
  • Cultural and linguistic compatibility
T – Technological
  • Technological developments and innovation by Infosys and competitors
  • IT product offerings by Infosys
  • Technological diffusion rate
  • Value chain structures in the sector
E – Environmental
  • Climate change
  • Waste management and recycling of old electronics
  • Energy efficient and environmentally friendly technology
  • Availability of renewable energy
L – Legal
  • Anti-trust laws
  • Intellectual property disputes
  • Employment legislation
  • Consumer data protection

Outsourcing

Outsourcing has become an appealing notion in the information technology sector due to a variety of benefits that using foreign labor provides. Outsourcing helps to achieve better financial and productivity outcomes with significantly fewer costs, mainly due to lower salaries for foreign workers, both inside and outside the United States. Outsourcing helps to gain access to a market of highly talented individuals that are striving to achieve a career, thus dedicating time and effort to the company’s project. Foreign workers often have significantly more skill in specialty sectors like software development.

Outsourcing is appealing from a technological perspective since projects can be completed by teams without the need to be present at a specific location. India is a particularly attractive market due to its emergence in the global marketplace with high-profile investors while maintaining low human capital and infrastructure costs. Culture and language rarely serve as barriers since many foreign experts are fluent in English. Outsourcing helps a company to efficiently maneuver its financial assets to avoid high tax rates and other expenses that may arise through legal means in any given country.

Sustainability

The strategy of IT offshoring is not sustainable in the long run as India becomes a prominent player in the global market, thus resulting in the growth of wages and legal pressures from both India and the US to end the practice of tax avoidance. Cost-effectiveness is a factor which is eroded over time, especially for companies striving to achieve global and innovative growth. As wages in India grow and infrastructure costs become relatively similar to the United States, the savings become insignificant. Outsourcing is a highly controversial practice which creates political pressures as well as potential risks that are unacceptable from an investor’s point of view.

Recent changes to the United States tax code and significant crackdowns on offshore accounts in major industrial nations have contributed to companies shifting tactics. More emphasis is put upon value-adding to a company’s services and assets rather than cost-effectiveness.

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IvyPanda. (2021, May 5). Infosys Company's Outsourcing and Sustainability. Retrieved from https://ivypanda.com/essays/infosys-companys-outsourcing-and-sustainability/

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"Infosys Company's Outsourcing and Sustainability." IvyPanda, 5 May 2021, ivypanda.com/essays/infosys-companys-outsourcing-and-sustainability/.

1. IvyPanda. "Infosys Company's Outsourcing and Sustainability." May 5, 2021. https://ivypanda.com/essays/infosys-companys-outsourcing-and-sustainability/.


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IvyPanda. "Infosys Company's Outsourcing and Sustainability." May 5, 2021. https://ivypanda.com/essays/infosys-companys-outsourcing-and-sustainability/.

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IvyPanda. 2021. "Infosys Company's Outsourcing and Sustainability." May 5, 2021. https://ivypanda.com/essays/infosys-companys-outsourcing-and-sustainability/.

References

IvyPanda. (2021) 'Infosys Company's Outsourcing and Sustainability'. 5 May.

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