Infosys: Life Cycle Management - Summary

For an organisation that provides its customers software and consultancy

solutions in product lifecycle management, Infosys clearly needs to re-invent
itself with respect to its organisational life cycle management if it is to catch up
with its competitors such as TCS and Cognizant.
Infosys followed an r-strategy and it was an early entrant into the nascent
software sector in India in 1!1. "s its co-counder, #arayanamurthy re$ects,
Infosys re%uired &overnment approval even to import computers for o'ce use
and had to wait for wee(s or months in certain cases for this. It rode the
worldwide IT )oom of the 1*s to )ecome a respected internationally
recognised IT services company and followed a generalist strategy, operating
in several niches such as IT Consultancy and pac(age implementation services in
areas as diverse as engineering, healthcare, life sciences and aviation sector and
+,- services.
.owever, as the last recession from /**0 1 /*1/ showed, Infosys grew slowly
while other generalist competitors such as Cognizant and TCS grew much faster.
It has also )een slower in geographic diversi2cation than its competitors.
Infosys grew through creativity )ut it never had a full )lown crisis of leadership.
Its top management and the path to reaching senior management levels have
remained fairly constant and predicta)le till /**0. ,erhaps this was )ecause its
founding mem)ers were entrepreneurs who were also somewhat seasoned
managers. This ena)led them to scale up %uic(ly through the growth through
direction, crisis of autonomy, delegation, crisis of control and growth through
coordination.
3sing &eitner4s model, we feel that Infosys moved through stages -ne through
Five where it e5perienced a pro)lem generally associated with stage 16 a crisis of
leadership. Infosys4 much vaunted 7.* strategy failed to deliver ade%uate results
in the recent past. It grew in a)solute terms )ut much slower when compared to
competitors. From stage 8, Infosys is transforming itself using the stage 1 route
where the pro)lem area was identi2ed as that of leadership. This crisis of
leadership was recti2ed with the return of #arayanamurthy and 2nally, with the
e5it of most of the old guard and induction of 9ishal Si((a, who was formerly with
S",, and as a non-Infosysian, this mar(ed a shift in Infosys4 recruitment norms.
In terms of Weitzels and Jonssons model of Organisational decline,
Infosys is in Stage 4 where there is a crisis and steps have )een ta(en to restore
the organisation4s growth tra:ectory.
Infosys is wea( when it comes to management consultancy services, since it
tends to wor( at the level of operational value creation. Competitors such as I;<
and "ccenture dominate this area. Infosys4 current transformation could help it
)rea( into this sector. Infosys has to morph towards )eing a management
consultancy with a signi2cant IT component.
,erhaps hiring in signi2cant num)ers from the ,&,=> program at II< Calcutta
could also help in this endeavour.
Infosys: Life Cycle Management - etails
! "usiness enter#rise o$es its e%istence to continuous &alue creation
resulting in "etter customer e%#eriences' 1 Infosys ?e)site
@http6AAwww.infosys.comAengineering-servicesAservice-oBeringsA,agesAproduct-lifecycle-
management.asp5C
For an organisation that provides its customers software and consultancy
solutions in product lifecycle management, Infosys clearly needs to re-invent
itself with respect to its organisational life cycle management if it is to catch up
with its competitors such as TCS and Cognizant.
There are clear cut moves in that direction. The old guard comprising of people
who had started the organisation as entrepreneurs or as early employees and
who rose to C-suite levels has made way for a complete overhaul of its senior
management positions. There is lesser room for nostalgia and more hard-nosed
thin(ing to wor( towards a higher growth tra:ectory.
Infosys followed an r-strategy and it was an early entrant into the nascent
software sector in India in 1!1. "s its co-counder, #arayanamurthy re$ects,
Infosys re%uired &overnment approval even to import computers for o'ce use
and had to wait for wee(s or months in certain cases for this. It rode the
worldwide IT )oom of the 1*s to )ecome a respected internationally
recognised IT services company and followed a generalist strategy, operating
in several niches such as IT Consultancy and pac(age implementation services in
areas as diverse as engineering, healthcare, life sciences and aviation sector and
+,- services.
.owever, it has historically had a narrow )ase of clients and when )usiness from
these clients shrun( owing to macro-economic reasons, Infosys4 growth
stuttered. It has )een una)le to achieve any signi2cant volume in the mar(et for
government funded services in international as well as domestic mar(ets. This
has ena)led it to survive the / worldwide recessions of the last 18 years.
.owever, as the last recession from /**0 1 /*1/ showed, Infosys grew slowly
while other generalist competitors such as Cognizant and TCS grew much faster.
It has also )een slower in geographic diversi2cation than its competitors.
(ie$ing Infosys t)roug) t)e #rism of *reinermodel of organisational
gro$t)
Infosys grew through creativity )ut it never had a full )lown crisis of leadership.
Its top management and the path to reaching senior management levels have
remained fairly constant and predicta)le till /**0. ,erhaps this was )ecause its
founding mem)ers were entrepreneurs who were also somewhat seasoned
managers. This ena)led them to scale up %uic(ly through the growth through
direction, crisis of autonomy, delegation, crisis of control and growth through
coordination.
Infosys: ! +rief C)ronology
1!1 Dear of Incorporation
1/ ;ecame a pu)lic limited company in India
17 IS- **1ATic(IT Certi2cation
1 Eisted on #"SF"G
Crossed H1** million in annual revenues
"ttained S=I-C<< Eevel 8
/**/ Crossed H half a )illion in revenues
/**0 Crossed H / )illion in revenues
/*17 #arayanamurthy re:oins
<assive restructuring of top level
management
/*1I #arayanamurthy resigns after restructuring
is over
9ishal Si((a, formerly with S", is selected
C=-
Source: http://www.citehr.com/118434-amazing-infosys-story-how-infosys-born.html#izz3!Su"#p$%
Infosys too( steps to cut through tape and grow through colla)oration. ;ut in a
rapidly changing )usiness environment where worldwide recession and an
increasingly protectionist 3S", the primary mar(et for their services, slowed
Infosys4 )usiness growth, it )ecame necessary for the company to reach out
more to newer mar(ets in =urope, =ast "sia, "ustralasia and the <iddle =ast,
even "frica. -ver-reliance on 3S" and its traditional customer )ase too( a toll on
Infosys.
?e feel that Infosys moved through stages -ne through Five where it
e5perienced a pro)lem generally associated with stage 16 a crisis of leadership.
Infosys4 much vaunted 7.* strategy failed to deliver ade%uate results in the
recent past. It grew in a)solute terms )ut much slower when compared to
competitors.
In /*17, the signs of organisational decline were %uite evident. Infosys was )eing
outperformed )y competitors such as TCS and Cognizant. To its credit, Infosys )it
the )ullet and its mentor and co-founder was mandated )y the )oard to ma(e
sweeping changes. From stage 8, Infosys is transforming itself using the stage 1
route where the pro)lem area was identi2ed as that of leadership. This crisis of
leadership was recti2ed with the return of #arayanamurthy and 2nally, with the
e5it of most of the old guard and induction of 9ishal Si((a, who was formerly with
S",, and as a non-Infosysian, this mar(ed a shift in Infosys4 recruitment norms.
In terms of Weitzels and Jonssons model of Organisational decline,
Infosys are in Stage 4 where there is a crisis and steps have )een ta(en to
restore the organisation4s growth tra:ectory.
Infosys grew organically for most of its life though it has made ac%uisitions in the
past few years to develop e5pertise into newer areas.
Fespite )eing a huge IT company in relation to its Indian competitors, Infosys is
much smaller than its glo)al competitors. Infosys generated HI )illion in /**!,
which is relatively low in comparison with large glo)al competitors such as
.ewlett-,ac(ard @H1 )illionC, I;< @H1 )illionC, =FS @H/1 )illionC and"ccenture
@H1! )illionC.
Infosys is wea( when it comes to management consultancy services, since it
tends to wor( at the level of operational value creation. Competitors such as I;<
and "ccenture dominate this area. Infosys4 current transformation could help it
)rea( into this sector. Infosys has to morph towards )eing a management
consultancy with a signi2cant IT component.
,erhaps hiring in signi2cant num)ers from the ,&,=> program at II< Calcutta
could also help in this endeavour.