CASE STUDY A

N-Sight is a consulting firm based out of Bangalore with a headcount of over 30,000. The firm
reported revenues of about $2B for year ending 31
st
March, 2010. About 80% of the staff
operates out of the office in Bangalore, 5% of the professionals travel around to sell the
services and the remaining 15% work onsite at client locations. The firm is under severe
pressure to provide services at reduced rates. The firm has trimmed expenses in several ways
to reduce the cost of service and survive in the economic down turn.
The CFO of the firm has already curtailed the following business related expenses
Entertainment (official dinners, employee entertainment and other related team building
events), Travel (non-client travel, long term stay in expensive hotels), Talent related expenses
(recruitment and trainings), Capital Expenditure on Facility and Technology (fixed assets,
equipment, consolidating office locations, software purchase and upgrades), Eminence Building
(research, marketing and brand building), Supplies (re-negotiating with the vendors), Corporate
Social Responsibility (community involvement activities, donations and scholarship) and other
Admin expenses (transport, air conditioning, paper based products, beverages and snacks,
courier, and administrative staff). Also, support services were re-organized.
On second round, to achieve the desired cost of services, CFO of the firm focused on improving
the productivity and reducing the employee related cost by restructuring and re-organizing the
business model.
The number of headcount in the bench was reduced to improve the utilization of the firm. Also,
time spent on training was reduced to improve the billable hours per person. This enabled the
CFO to improve the utilization of the firm by 80% level to above 90% level. Also, headcount was
aligned to business need either by combining similar services or by providing the individual
additional responsibility. In April, the company reduced the workforce by 4000 and brought it
to the current level of 30000. Also, CFO advised the business leader to improve span control
and reduce the average salary cost per person. In this endeavor, the business leaders were
more focused on hiring from campus rather than lateral hires.
Most of these actions resulted in trimming the fat and have not significantly impacted the
overall operations or businesses so far. The reason quoted by the CFO in his last update to CEO
is that firms commitment to provide quality service to the clients, build the eminence in the
market place and continue with it to reward employees with salary hikes.
Balance Sheet analysis of FY10 statements revealed that about 60% of the revenue is spent on
salaries of the client service personnel. 5% of the revenue is spent on marketing and business
development expenses to improve the market share in new geographies.


General and admin expenses accounted for 7% of the revenue. Another 8% of the revenue was
incurred on depreciation and finance cost.
The New P&L of the firm put together by the CFO projected revenues of $2.2B. About 65% of
the revenue was spent on salaries after salary revisions. Marketing, admin and finance cost
accounted for 4%, 5% and 11% of the revenues.

Questions to be addressed
1. Summarize the issues, in the case described above.
2. Identify alternative solutions for the firms if the global economy (a) improves or (b)
continues to be stressful for next 3 years.
The solutions should describe what the firm should do to:
a. Continue operating with lean expenses
b. Provide quality services to the clients at the reduced prices
c. Build eminence and improve the market share in the new geographies

3. Define the assumptions if you have made any to analyze the data provided and develop
the alternatives
4. Evaluate alternatives and recommend preferred solutions. Define Criteria for
recommending the preferred solution to the firm for both the scenarios.
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