A Case Study on Infosys

Presented By : Sheraz Ahmed Shakeel Khan Farhan Nazeer

Sheraz Ahmed

Journey Started

In 1981, Murthy and six of his associates at PCS formed a company named Infosys technologies Initial capital was 10,000 Rs. All borrowed from spouses They always complement each other without threading each others toes They prize fairness, dignity and respect Ex: Murthy asked Shibulal not to go home before solving a problem and he stayed 4 days at office without going home
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Journey Started

Murthy once said Our goal is to be the short-list of every Fortune 500 CEO and CIO when ever they have a business problem that requires information technology to resolve It took 12 month and 15 visit to Delhi to get a permission to import a computer It took 12 month to get a telephone They wanted not just to be a successful company but to be a trailblazer They wanted to build a firm that was professionally managed with good corporate governance, good 4 employee management and good emetics

Infosys: Company background

Business: IT consulting and services (Founded in 1981) HQ, Bangalore, India; U.S HQ: Fremont, CA. Growth: CAGR of 50% over the last decade; MCap: ~25 B US$ FY 2005-06 revenues: ~US $2.1 billion with around 50, 000 employees 1999 2005: Growth of1400%, revenue terms;1000%, employee numbers Global Operations, primarily servicing Fortune 500 and Global 1000 clients located in the Americas, Europe and the Asia-Pacific Development Centers: India (8), NA (5), 1 in each U.K., East Asia and APAC Marketing offices: ~ 36 all over the world Quest for excellence integral to its social/ cultural fabric from early years Pioneers of the Global Delivery Model (GDM) for development of customized IT solutions

The Near Death Experience

In 1989 Indian Govt imposed some new regulations and Infosys could no longer send programmers in US. They could not setup office in US They were on the verge of selling their company. But Murthy stand tall. And they survived !
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Govt Regulation is relaxed

In 1991 Govt relaxed some trade and exchange control Result is now Infosys can send his resources freely to abroad, set up offices abroad and hire foreign consultants They goes to IPO at 1993 Fresh wind blows to Infosys By 1993 they have expanded to 500 in their own campus
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Rapid Growth

In 1993 500 In 1994 1000 By year 2000 Infosys became 18,000 people company 50 acres of campus which is largest in the world in the service industry. 25 building in the campus Registered in NASDAQ Pursue clients to develop Offshore Development Center with them Over 1 million employees Infosys & subsidiaries
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Rapid Growth

Introduce Global Delivery Model: Convert threat into opportunity

Quality, Quality, Quality ISO 9000 CMM Fixed time, Fixed Price with Quality delivery

They enjoy the low cost largest skilled resource pool in the world. This helped them to grow very fast
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New Challenge comes from MNCs

As soon as Govt relaxed some trade and exchange control, MNCs like IBM decided to come to India Infosys faced serious challenge as MNCs offered very lucrative packages to competent resources They had two options. One is to lobby the Govt to keep the MNCs out. Other is to face MNCs Infosys took the second choice. They thought the only way to survive and grow is by putting own house in order Infosys analysed that bright people would go to MNCs because they provide better compensation and good environment. So they decided to do the same
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Challenge from Own Clients

This implies the buying power of Customer. They faced it with GE Once their 40% of revenue comes from GE GE put them in a difficult position with rates. They insisted always to lower the rate. They decided not to depend on only one customer so much So finally they come to a decision that they will depend max 10% of total revenue from one customer

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Challenge from Own Clients

In 2000 its largest customer accounted for 10% and the five largest customer accounted for 33% In this regard once Murthy said

Infosys run by 4 business principles. One is predictability of revenue Second is sustainability of revenue Third is profitability of that revenue Fourth is de-risking model

Thus Infosys focused not only its core business of offshore software development but also other complementary software services
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Shakeel Khan

Values, Culture and Compensation

Murthy once said that they have a First world company in Third world country They practiced Employee empowerment

It means synergizing organizational objectives with individual aspirations

Finacial, Emotional, Learning

Holistic compensation

Stock options. First in India

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Values, Culture and Compensation

Murthy once said We have a culture of creating wealth and sharing it with everyone Only 10% employee turn over each year. And most of them because people leave for higher studies
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Hiring, Training and Retention

Infosys scouted for talent at the top Indian universities and engineering colleages, recruiting from 55 universities They said We dont have a demand limit, we have supply limit They emphasis on Analytical ability for problem solving in hiring new member Small group

20 person team. 5 of them are real bright spark. This makes the team more balanced and motovated
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An Example

Infosys HALE Health Assessment Lifestyle Initiative

A portal for online dissemination of information on stress related issues and a hotline whereby the employees can directly receive counseling and expert opinions. - Data from portal & hotline used by HR to track key indicators like absenteeism rate with causes and resultant billing losses.

Future Infosys

Managing growth effectively

Impersonal Sustain same Quality Sustain Infosys Culture Rapid Growth hides thousand Evils

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Future Infosys

Moving up the value chain

Package approach and quality into methodology Balanced mix between technology and management End to end implementation

Still they can keep with 35$/hour where big names charge 250$/hour Agile way of operation gives flexibility Infosys knows that cost advantage will not last forever
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Future Infosys

If any recession comes, their ambition will be threatened Establish Global identity

Truly Multinational Set sails for distant shores

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Architecting a high performance Infosys

Farhan Nazeer

Infoscion of the new millennium

Solution Focused
Global Mindset Trust Connected Trust worthy & Committed Competent

Excellence in Execution
Client First Mindset

Global people trends

Battleground : India Business aligned compensation structures High Performance Organization Culture Leveraging Diversity A Business Imperative Inclusive Work Environment Global Talent Deployment Client Focused Competency Development

Slide 23

Driving change

Talent Acquisition
Structural Transformation Embracing the Role-based structure Talent engagement & client focused competency development Better rewards for performers, aligned with business growth Talent Deployment Technology as a catalyst of change

Slide 24

Talent acquisition

Winning the Talent War

Record growth in Infoscion community

20000 15356 16000 10738 12000 8000 3766 4000 5389 9831

17095

Multicultural workforce

37 Nationalities

Greater velocity of hiring Highly selective recruitment process Robust processes

0 FY99 FY00 FY01 FY02 FY03 1Q04

Employee Growth

Capacity to test 10,000 people in 7 cities on the same day Strong testing and evaluation processes

Applicants 100%

Interviewed & Tested 10.78% Offers 1%

Figures for 02-03

Infosys Technologies Limited 2003-2004

Slide 25

Structural transformation

Leaner & aligned organization structure

Integrated Business Units

Verticals
Retail

IBU structure with focus on Verticals and Geographies Global accounts focus Strong Client Interface

Geographies
EURP

Rest of North America

Engineering Services

APAC Global Accounts

Telecommunications

Greater China

Enterprise Solutions, Domain Competency Group, Software Engineering Technology Labs

Broadbanding

From existing 15 grades to current 6 bands Relative evaluation of jobs on key parameters

B A N D P R O G R E S S I O n

Band F Band E Band D Band C Band B Band A2, A1

Slide 26

Career model to align employee growth to organizational growth

Infosys Technologies Limited 2003-2004

Embracing the role-based structure

Project Management Technical Customer Interface Program Management Domain Consulting

Software Engineer

Programmer Analyst

Technical

Resident

Program

Business

Specialist
Technical

Project Manager
Senior Project Manager Delivery Manager

Project Manager
Account

Manager
Senior

Analyst
Associate

Architect
Senior.

Manager
Business

Program Manager

Consultant
Consultant Senior

Technical Architect
Principal

Support Manager

Consultant
Principal

Architect

Consultant
Senior

Principal Consultant

Infosys Technologies Limited 2003-2004

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Embracing the role-based structure

What you deliver will determine how you grow Compete through competencies Logical and sustainable structure for the future
C O M P E

Training

Role Based Structure

T E N C I E S

Recruitment

Performance & Potential Appraisal

People

Talent engagement & client focused competency development Work Induction/Workshops

Exemplars, Mail id Code of Conduct,
Sets Direction Performance focus

Developing Leaders

Interpersonal Effectiveness

Whistle blower policy Positive Work Environment

Leaders Teach Tiered Leadership Communication Business Etiquette, Practices Mentoring programs Foundation training

Infosys Vision &Values

Milestone Programs CFPM, STRAP, MSTRAP Action Learning

Technology

Client facing and cross cultural programs Business

for fresh entrants (14.5 weeks)

Business

Advanced technology training

Quality Process Training K Shop Domain Training
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Functional Expertise

Quality

Business Forums Best Practice sharing

Relationship Building

Customer Partnering

Infosys Technologies Limited 2003-2004

Business aligned compensation structure

Focus on higher differentiation Business Benefits ploughed back to employees
Company Performance Linked Incentive Team Performance Individual Performance Performance Allowance Company Performance Linked Incentive Performance Reward Company Performance Linked Incentive Individual Incentive at Senior Grades Sales, Consulting

Variability in Compensation

Prior to 2000

2001

2002

2003

Infosys Technologies Limited 2003-2004

Slide 30

Talent deployment

Trends across geographies and visa categories Processes and timelines Quick response and compliance with requirements
Slide 31

Infosys Technologies Limited 2003-2004

Technology as a Catalyst of Change

High Tech

High Touch

Communications Strategies for a Global Workforce

MDs email- happenings

Bulletin Boards Quarterly Town halls

Live Chats Town Halls/Open Houses Brown Bag Lunch

Integrated People Practices

Performagic ILITE

Compensation System

Reaching out with speed through web enabled systems

Infosys Technologies Limited 2003-2004

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Positioned for Sustained Growth

Hiring the best

Offers made to 1% of candidates applied

Competency based edge to People Practices Speed and agility in aligning HR practices to business realities Best in class retention rates Global recognition for HR practices

The Job Evaluation Evolution

OLD
GRADE
TENURE

The JE Evolution
NOW JOB

PROMOTION Job/grade Mismatch Unreal Expectations Based on Tenure and not Performance

Performance in Current Job Org. Requirement for Job from Promotion Model

Competency for Next Role

Growth Based on Ability Connected With Org. Growth

NEXT JOB
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Integrating Competency Building to Create a Culture of HPOE

Performagic
Set Objectives based on unit objectives
ILITE Trn g Records

ILITE

Review the objectives as an ongoing process

Signed off Training Plan

A : 10% Way above expectations

No No Banding

Do an appraisal and fix the ratings (based on suggested %) Yes

Potential Evaluation for all (for PA and above) considered for role change/ promotion

B+ & B: 80%Meets or exceeds expectations B- & C : 10%Below expectations, needs Improvement

Compensation Benefit System

1. Individual Compensation Structuring 2. Promotion Decision

Band 1 (High) -10%, Band 2 (Medium) - 80%, Band 3 (Low) - 10%.

Banding in Performagic at the PU/Department Level

Top 10%
Reward High Potentials Talent Council

Bottom 10%

Others

Communication thru the system Could move to Performance Improvement Plan

Integrated Performance Management

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Relationship between Compensation and Competence

Review the cost/benefit

Develop Potential

Fix Pay Competence of Staff

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Specific Initiatives to Strengthen People Practices under PCMM Base-lining of Competencies to Drive Improvement Programs Tracking of Career Aspirations Goal Flow Down & Objective Setting of All Employees Formal Mentoring Program Metrics Driven HR Operation People Practices Innovation a Way of Life

Infosys Technologies Has Been Assessed at Level 5 on the PCMM Model by KPMG, Becoming the First Company in the World to Be Assessed at the Optimizing Level on the Updated Version 2.0 of the Model.
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FinallyIntegrating HR Strategy with Business Strategy

VISION MISSION VALUES ATTITUDES BEHAVIOURS

GOALS OBJECTIVES ACTIONS PERFORMANCE

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Awards & Accolades

Recent Awards Won

Data Quest-idc INDIA SURVEY: Indian It's Best Employers, September 2002: Second Year Running Business Today- Hewitt Best Employers in India, Jan 2002: Second Year Running

People Capability Maturity Model, Level 5 Aug 2002

Infosys Assessed at Level 5 on the PCMM Model by KPMG, Becoming the First Company in the World to Be Assessed at the Optimising Level on the Updated Version 2.0 of the Model

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Thank You

J K Suresh, Infosys Technologies Ltd., India, 2006