Infosys Calls Fedderson To Bail Out Yantra

Infosys Technologies Ltd has invited US venture capitalist Don Feddersen to work out a turnaround strategy for its loss making subsidiary Yantra Corporation. "We have invited venture capitalist people (Feddersen) into Yantra to infuse further funds and formulate a strategy to pep up sales, marketing and support on the lines of a US model," said N R Narayana Murthy, chairman and chief operating officer, Infosys.

"We feel there will be losses initially but once we ramp up sales levels this will change," he said. Yantra had incurred a loss of Rs 5.87 crore against a revenue of Rs 4.78 crore. Infosys had attributed this to an research & development expenditure of Rs 4.59 crore and that it would start paying dividends in the near future.

Murthy will also initiate some board-level changes in the company next year as a part of the group's commitment towards embracing corporate governance and transparency. One major change will be induction of Nandan M Nilekani as a whole time managing director of Infosys, effective April 1999. Nilekani is currently the deputy managing director.

Murthy himself will retain the post of chairman of the company and will do away with his other designation of chief executive officer.

Infosys, which has of late been in the limelight for its proposed ADR issue and possible merger & acquisitions in the US, has drawn up a plan to further consolidate its Indian operations. "We will have 420,000 square feet area at our software park in Bangalore which will have a workforce of 2500," Murthy said.

Infosys is also expanding its geographical spread and is currently in the process of setting up software facilities in Chennai, Pune, Mangalore and Bhubaneswar. "Later we will have one in northern India," Murthy said.

"All these facilities together would create capacities for housing between 4000 to 5000 software personnel over the next three to four years," he said. Infosys is currently focusing on enhancing its per capita revenue production per employee by investing in and installing productivity enhancement tools.

"Infosys will continue to be a software services company for the next five years," Murthy said. Between 80 to 90 per cent of the company's revenues comes from software services.

Regarding the company attempt to focus on newer markets like the European and Japan, Murthy said that efforts are on but surveys have shown that the opportunities there are latent. Currently US is the largest market in the world accounting for nearly 80 per cent of the $25 billion outsourcing market. More than 80 per cent of Infosys' revenues come from the US market.