BearingPoint Problems, Infosys Innovation

BearingPoint Inc. had its CFO resign in less than three weeks on the job. Infosys Technologies Ltd. received two patents from the U.S. Patents and Trademark Office. The patents were developed in the company's Software and Engineering Technology Labs (SETLabs).  

Focal Points:

• BearingPoint said its Chief Financial Officer Eileen Kamerick has resigned on June 2 after less than three weeks on the job. According to the company the decision to resign was not based on any disagreement with the firm. The company appointed board director Eddie Munson as interim CFO. Just last month the firm revised its fiscal 2008 guidance and projected flat net revenue growth and a net loss of approximately $70 million. According to Reuters Estimates, analysts were expecting BearingPoint to report revenue of $3.4 billion and net loss of $71 million for the period.
• The U.S. Patents and Trademark Office granted Infosys two patents, neither of which is related to its prime outsourcing business. One patent covers ubiquitous mobile connectivity with transparency to the user. The patented technology makes a mobile phone network appear seamlessly connected, even when the underlying technology and its characteristics keep on changing. The other patent describes the realization of 3-D communication using computer-generated holography to send/receive information and the associated optical elements required to make a lightweight handset. Infosys has filed 100 patents in the last 18 months.
• SETLabs is the dedicated innovation and software engineering research lab of Infosys. SETLabs is not an internal division of the company but exists as strategic business units called Centers of Excellence (CoEs). Some of their areas of innovative focus are data warehousing, grid computing, J2EE, mobile networks, and pervasive computing. The company believes that development of significant high-tech intellectual property (IP) should help protect it from economic downturns and that innovation is necessary to succeed in the next wave of outsourcing. Additionally, according to key findings of an in-house report, 36 percent of enterprise architecture (EA) teams surveyed actively participate in the company's strategic business planning while 19 percent spend most of their time on business architecture.

Experton Group believes Infosys is well poised to sustain its rapid growth and create new business opportunities for itself while BearingPoint remains a troubled company whose future as an independent service provider remains in doubt. The ability to create and leverage IP will be a critical success factor in an enterprise's business model and survival, as the majority of corporate assets today are knowledge based. Infosys' business model designed for leveraging existing relationships and innovation is an optimized outsourcing model and is well received by its clients. On the other hand, BearingPoint has had difficulties, including retention of skilled staff and leveraging its IP, since its inception as an independent company and it has not yet turned the corner. IT executives should understand the business model, culture, financials, strategies, sweet spots, and other critical factors of their consultants and outsourcers, as well as the provider's ability to meet business and technology requirements, before committing to long-term strategic relationships.

IT executives must also make sure that the company has ownership rights to IP created by its consultants and outsourcers on a "work for hire" basis so that the concepts and/or deliverables cannot be sold to or utilized with competitors.