Business Goals and Structure of Infosys
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Published: Mon, 11 Dec 2017
Infosys is a global IT services company, its bases located in Pune, India, which provides a wide range of IT related services ranging from consulting, design, development, software reengineering, maintenance, systems integration, package evaluation, and implementation to infrastructure management. Prior to Infosys, India’s IT, software industries consisted of providing end-to-end business solutions at overseas locations. Infosys found that it would be more cost efficient if it has access to local talent, for there is actually a significantly well-educated population of human resources in India. The company’s main positioning is to capitalize on the premise of globalization. In the words of Narayana Murthy, the founder of Infosys, the goal of Infosys is “sourcing capital from where it is cheapest, producing where it is most cost-effective, and selling where it is most profitable, all without being constrained by national boundaries.”
When Infosys was first established in 1981 in India, by N.R. Narayana Murthy, and six other entrepreneurs, it began as a small-size firm, with just one employee. Infosys went public in 1993, and until then, it showed fairly modest growth. By late 1990’s however, its revenues had increased from $2 million to $121 million, and its share price skyrocketed from 95 INR to 8,100 INR per share. Currently, Infosys is one of the largest IT companies in India, with over 130,000 employees. It has offices in 33 different countries and has development centers in India, China, Australia, UK, Canada, and Japan. Since 2000, for three consecutive years, Infosys was rated best employer to work for by Hewitt Associates, and was the only Indian company to win the Global MAKE award for three consecutive years. It has also been seeing a steady increase in applicants over the years.
II. Unique organizational structure evolution of Infosys
Due to the increasing acceptance and growth of global sourcing, the business executives and IT executives of Infosys see the need for effective change management to adjust to the changes in business environment. In case of Infosys, the organizational evolution involves setting the framework for work, coordinating and controlling what is to be done, and setting a common set of values for workers around the world. The organizational management of Infosys is a highly people-centric process. It begins with recruitment, training of new employees, and finally, the organizational management of hired employees.
Infosys has very high criteria in recruiting its workers. The criteria seek for “learnability,” the ability for employees to quickly and flexibly take in what they are taught during the employee training stage. Infosys invests a significant portion of company revenue to the training of new employees. During the training program, newly hired workers are heavily trained in order to build skills in specific fields, such as analytical-thinking, problem-solving, principles of operating and database-management systems, networking, customer facing, and negotiation. This is to foster a large pool of workers who are capable of successfully dealing with international clients who have different values, backgrounds, and expectations. It moves on to set a common set of values for employees all around the globe. This set of values is referred to as “C-life,” which includes five core values of customer delight, leadership by example, integrity and transparency, fairness, and pursuit of excellence.
Finally, in the overall organizational management of the company, focused on the hired employees, Infosys focuses on dealing with the complexities and uncertainties that exist in the versatile nature of strategic global sourcing. There are bound to be doubts and uncertainties that may be raised among employees, regarding their involvement in company’s decision making process and the fear of being cut off after the completion of a transition, due to the traditional centralized structure of Infosys as an Indian company. In order to address these problems, Infosys has brought upon several changes in organizational management. First, to establish a change team that is supported by senior executives and consists of representatives from each of the key areas influenced by the change, to reach out to the employees and ensure that their concerns are heard and addressed, develop and implement risk mitigation strategies in case of employee retention, and developing a system of communication that can be successfully delivered across the organization. In short, Infosys emphasizes communication within the company in its evolutionary organizational structure, in order to tend to the problems that may rise due to the constantly changing nature of the related business environment.
III. Challenges faced by Infosys
It is evidently true that Infosys has made quiet a success regarding the fact that they started out as a small company. Starting from India, Infosys has successfully entered the global market too. However, the people of Infosys acknowledge the fact that the fast moving and developing society does not guarantee a sure success throughout the future. Until now, Infosys successfully reached some point of their goals on the people side and the business side as well. Children who grew in poor education conditions of India joined Infosys and earned pride, accomplishment and great potential. And Infosys was even hired to design part of the intricate wing structure of the superjumbo A380 aircraft as a result of their works to integrate low-cost, high-quality software development services with its competency of managing large scale projects in distributed locations. This success also brought along challenges for Infosys.
The first challenge is to become proactive problem-definers rather than be reactive problem-solvers. Infosys now focuses on trying to solve the problems customers complain about. However, it has to transform its behavior to be more active and responding to customers. Infosys should be able to predict the problems and come up with specific actions to solve them before the customers complain. Infosys’s aim is to provide solutions leveraging IT. In order to do this, it needs to plan technology solutions and act on implanting them.
The second challenge is to become more and more multicultural. Even though Infosys has made some success in entering the global market and expanding its business boundaries across the world, it still needs to clear the remaining cultural barriers. Without doubt, Infosys has made some efforts. It rotates selected managers from various countries through their Infosys Leadership Institute. Also, when there is a large deal, people from different parts of the world contribute to prepare, defend, and to execute numerous proposals. However, this cannot be sufficient for a company to sustainably grow in the global market. Infosys faces some problems in transferring employees from one region to another, for instance, from the United States to India. Exchange and transformations of employees from various regions is crucial for international companies which shows that Infosys still needs to be more multicultural.
Finally, the last challenge of Infosys is to continue to retain the soul of a small organization in the body of a large organization. Infosys initially started as an organization of seven people; Murthy and his six friends with a 250 dollar capital in 1981. Now, it consults more than 200 companies world-wide with a revenue of 6.04 billion dollars. It could be described as a dramatic development in 30 years. Inevitably, many procedures and organizational structures would have faced large modifications along with the development of the company. Now Infosys faces the challenge of balancing the organization procedures as well as becoming an integrated multicultural organization.
There exists not one company which does not face challenges. Although Infosys faces multiple problems throughout the future, the CEO of Infosys claims to combat these challenges and “win in a flat world.”
IV. The future prospect of Infosys and possibility of further growth while retaining its founding values
Infosys was founded upon a clear vision and mission statement which enabled the sound and stable development of the organization. From its foundation, Infosys aimed to become a globally respected corporation in an environment of fairness, honesty, and courtesy towards its clients, employees, vendors and society at large. The five main values that drive Infosys towards this goal are customer delight, leadership by example, integrity and transparency, fairness, and pursuit of excellence. Nevertheless, the corporation realizes that continuing to retain a soul of a small organization in the body of a large, international organization could be a challenge in the upcoming future that it must address. While it is healthy for an organization to prepare and be prudent, there are enough reasons to believe that Infosys will be able to retain and even increase its growth rate while maintaining its integral founding values at the same time.
Infosys emphasizes that human capital as the main asset of the organization. Infosys currently has more than 520,000 employees located in 33 countries worldwide. Infosys is renowned to heavily invest in its employees because it believes that the progress and success of the corporation depends on its workers. The lucky 1 percent of the applicants who are selected to work at Infosys still has to undergo 14 weeks of rigorous boot camp to earn the chance to take the final tests and become official “Infoscions”. These 14 weeks of training aims to truly transfer the founding values of Infosys so that every Infoscion would always the importance of the basic values that led to the company’s success. The process of becoming an employee at Infosys is extremely difficult but the system can ensure that the corporation only picks the best and the brightest workers who can truly add to the value of the international company. The last decade of performance has shown that Infosys continued to prosper when they hired more and more of qualified workers around the world.
Exhibit 1 and exhibit 2 shown above depict the positive relationship of Infosys employees’ strength and the revenue of the company. The average employee growth rate during the decade of 1996 to 2006 was 40 percent while its revenue growth rate was 39 percent. As Infosys continues to expand its pool of workers to around the world through its Global Labor Pool, it is best positioned to become a truly multicultural organization that can understand the cultural nuances and languages of its vast client base. Infosys is ready to enjoy high growth of sales in the future while retaining the soul and values of a humble small organization.
V. Conclusion-Infosys in 2015
Infosys will be able to grow even more due to the fast changing financial market. By 2015, the world will continue to “flatten”, fiscal market will further open and this will benefit the world economy, and market regulations will be reduced with technological progress. It will be a true era of globalization and technological advancement. In the financial market there will be a shift of power from the financial institutions to the customers. As technology will give more power to customers to directly take control, Infosys’ role will become even more crucial in the future in providing high-end-to-end business solutions. Therefore, Infosys will hire more highly trained workers in strategic locations in the world and become an even more multicultural corporation that builds trust and communicates with its customers to establish the status of the most globally respected organization in the world in its field by 2015.
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