Infosys using new billing model

IT bellwether Infosys has started using a new billing system offering clients flexible schemes and protecting its margins.

Most of clients are now billed on the time and material based contracts (effort-based model) model under which Infosys charges a client based on the number of hours put in by the employees on a particular project. "We are pushing the new model across the client verticals. Over the next one-two years the company expects that about 5-10% of the revenue to come through the new model," Infosys senior VP and executive council member Subhash Dhar said.

In the last 6-9 months the company has signed 12-14 new clients under the new engagement model. "We have a large pipeline of deals under the new model," he said.

India's No. 2 software services exporter, is pursuing 12 to 15 deals worth $1 billion in this quarter, its chief executive said, amid hopes of a revival in outsourcing business momentum.

Hopes of a pickup in outsourcing demand, hit by the economic downturn, has soared after major Indian software services firms such as Infosys and sector leader Tata Consultancy Services Ltd smashed street estimates in their April-June earnings.

But export-driven outsourcers remain uncertain about a near-term earnings rebound, with Infosys forecasting its first annual revenue fall for the year to March 2010 on demand for fee cuts by its overseas clients.