DBT Bureau
Bengaluru, 25 June 2024
Infosys is increasingly executing more fixed price contracts as compared to time & material (T&M) in recent years. The company said in its annual report that this has been done owing to client requirements and pressure on IT budgets.
“In response to client requirements and pressures on IT budgets, we offer an increasing portion of our services on a fixed-price, fixed-timeframe basis, rather than on a time-and-materials basis. In fiscal 2024 and 2023, revenues from fixed-price, fixed-timeframe projects accounted for approximately 53% and 52% of our total revenue, respectively,” the company said in the annual report.
This has been highlighted under the risks relating to its contractual obligations. The company also said that it may have to increase the share of fixed price projects in the future.
“We expect that we will continue to enter into fixed-price, fixed-timeframe and transaction- based pricing engagements in the future, and such engagements may increase in relation to the revenues generated from engagements on a time-and-materials basis, which would increase the risks to our business,” Infosys noted in the annual report.
Infosys also said that it has deviated from its standard pricing policies owing to pressure on the IT budgets.
“Pressure on the IT budgets of our clients has led us to deviate from our standard pricing policies and to offer varied pricing models to our clients in certain situations in order to remain competitive. For example, we enter into transaction-based pricing contracts with certain clients who were not historically offered such terms in order to give them the flexibility to pay as they use our services,” Infosys said in the report.
In the report, Infosys said that its subsidiary, Infosys McCamish Systems is facing two class action suits in the US after a data breach incident.
“Two class action complaints arising out of the McCamish cybersecurity incident, purportedly on behalf of some or all individuals whose personally identifiable information was compromised or exposed to unauthorized third parties as a result of the cybersecurity incident, have been filed against Infosys McCamish Systems, LLC (“McCamish”) and consolidated in the U.S. District Court for the Northern District of Georgia,” the company said.
