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The Next Leg Up: Managing Scalability, Culture and Growth

The Next Leg Up: Managing Scalability, Culture and Growth. Nandan M Nilekani Managing Director, President and Chief Operating Officer Infosys Technologies Limited. Infosys has grown significantly in the past. Revenues grew by over 500% and Net profits by over 600% in four years.

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The Next Leg Up: Managing Scalability, Culture and Growth

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  1. The Next Leg Up: Managing Scalability, Culture and Growth Nandan M Nilekani Managing Director, President and Chief Operating Officer Infosys Technologies Limited

  2. Infosys has grown significantly in the past .. Revenues grew by over 500% and Net profits by over 600% in four years

  3. The profile of business is also changing… • Newer technologies have contributed to a greater proportion of revenues • Complexity of projects has increased • Customers have increased from 19 (1995) to 250 (December 2000) • Per capita revenue has grown from $42,000 (1997) to $89,600 (December 2000) • Spread of business and operations have widened

  4. throwing up a few challenges… • Bureaucracy affecting responsiveness to market • Dilution of work culture • Impact on quality, productivity and customer satisfaction • Attracting and retaining talent

  5. making it imperative to… • Scale-up capacity • Maintain agility even while growing rapidly • Create leaders at all levels • Relentlessly pursue operational excellence • Accumulate and enrich intellectual capital • Strengthen organizational planning activities • Manage risks proactively

  6. Key Dimensions Increasing No. of Employees Large No. of projects Broader Service Portfolio Diverse Employees Acquisitions & Investments Customers – Increased No., Size and Diversity Infrastructure Requirements Organizational response Key Drivers Organic Growth Inorganic Growth Growth Key Implications Opportunities Threats Key Challenges Leveraging Visibility Bureaucracy Scaling Up Alignment Loss of agility Ensuring Excellence Leveraging Capabilities Expectations Employee Morale The key aspects of growth are…

  7. Managing growth implies managing… • Scalability challenges • Workforce • Infrastructure • Processes • Technology • Risk • Customer expectations • Investor expectations

  8. Workforce

  9. Scalability challenges - workforce Employer of Choice AcquiringTalent Innovative Expansion of Pool Scalability

  10. Scalability challenges - workforce Employer of choice: The Business Today-Hewitt Study, to find out which companies have really charged the 'emotional and intellectual energy' of their managerial employees, rates Infosys as the Best Employer of India in a survey of a hundred and fifty five companies

  11. Scalability challenges - workforce • Expanding our pool: • Focus on learnability • Shift gear - engineers with 1-3 years of non-software experience willing to switch to s/w development • Alternate pools - CAs and MBAs • Domain experts in areas like finance, insurance, telecommunications, CRM etc

  12. Scalability challenges - workforce Scaling up: • Moving closer to the talent pool • Local DCs • Global PDCs • Quarterly testing model ( 10,000 candidates tested on the same day across 10 locations ) • Increased efficiency through systems • Distributed recruitment model

  13. Learning Value Add EnhancingRetention EmotionalValue Add FinancialValue Add Scalability challenges - workforce

  14. Scalability challenges - workforce “Learning value add” implies: • Multiple assignments in different technologies • Continuous learning • Global clientele • Gaining domain expertise • Empowerment and decision making • Continuous performance feedback

  15. Scalability challenges - workforce “Emotional value add” is achieved by: • Creating a campus like atmosphere • Providing opportunities for individual talent demonstration • Organizing inter DC meets • Skip level meetings • Top management 1 on 1 • “Voice-of-the-youth” programme • An atmosphere of care

  16. Scalability challenges - workforce “Financial value add” implies: • Competitive compensation • Asset creation • Wealth creation

  17. Scalability challenges - workforce Enhancing management depth • Broad-basing the board to attract high quality multi-faceted managerial talent • Induction of four non-executive directors in fiscal 1998, one non-executive director in fiscal 1999 and three non-executive directors in fiscal 2001 • Induction of three employee directors in fiscal 2001 • Empowering and preparing employees to take decisions for managing growth • Induction of managers younger than 30 years of age in the Management Council - “Voice of the Youth” • Deepening the management levels • Project managers empowered to take operational level decisions over budgets

  18. Infrastructure

  19. Scalability challenges - infrastructure • Adequate physical infrastructure capacity to support the growth in personnel • Existing capacity: 10,300 seats (1.55 million sq. feet) • Building ahead of requirement • Building capacity for 8,500 seats (1.43 million sq. feet) • Acquired land in Bangalore (100 acres) and Hyderabad (30 acres) to construct new software development campuses • Significant training capacity created • 1200 people in Bangalore and 700 more in other locations • Telecommunication links being substantially enhanced from ~15 mbps to ~27 mbps

  20. Scalability challenges - infrastructure

  21. Scalability challenges - infrastructure • Scaling up to projected manpower levels: • India • Overseas • Telecommuting • Non campus options • Leasing/renting out office space where required • Increasing the capacity of the existing buildings at various campus • De-centralization • Decentralized execution model • Benchmarking

  22. Processes

  23. Scalability challenges - processes • Create, maintain and enhance processes • Improve quality and productivity • Benchmark against best-in-class processes • Reduce project risk: schedule, cost, functionality and quality • Provide assurance to management

  24. Scalability challenges - processes • Deployment across the globe, with diverse nature of projects • Alignment across functions • Forecasting and servicing at the point of need • Measuring and improving performance across functions • Managing growth with minimum overheads • Effectively utilizing technologies

  25. Scalability challenges - processes Strategy for managing delivery challenges • Knowledge management initiative • Develop new mechanisms • Automate and enhance - IPM on the Extranet • New QA model • Quality focus during trainings • Reward and recognition • Multi-lingual QS and trainers • Outsourcing

  26. Technology

  27. Scalability challenges - technology • Rapid business process changes • Rapid changes in technology • Emergence of technology intensive business models • Business process standardization and integration across organizations • Reduced time-to-market for new services, products “Today’s business problem is actually a business-IT problem”

  28. Comfort PCs Partner with technology leaders in product development Challenge ERP Browser -as- platform Notebooks Client Voice Server Recognition Wireless JAVA LANs Partner with enterprises to leverage technology for business advantage Web-Enabled PDAs Mobile Phones XML Growth Mature Declining Emerging Market Maturity Stage Scalability challenges - technology Presence across various points in the technology curve

  29. Scalability challenges - technology Managing technology challenges: • Build a vision of tomorrow's technology, business • Harness specialist knowledge • Innovate, incubate and disseminate software engineering, technology practices and domain expertise • Build knowledge assets and reuse across projects

  30. Scalability challenges - technology Utilities Cash Mgmt Banking Loyalty Focus areas Retail and Distribution Commodities Risk Mgmt DCG Manufacturing Supply Chain Securities Insurance Agent Technologies eBusiness Technologies Architectures Object/Component Technologies Mobile Commerce Technologies SETLabs Performance Engineering Software Methodologies Security

  31. Business Models I.T & Tech Trends Domain specific Trends Customers Sales and Marketing PU Projects Package Analysis Patterns and Frameworks Methodology Knowledge Management Infrastructure Concept Application Reference Implementations Research Publications Research and learning output Scalability challenges - technology

  32. Risk

  33. Managing risk • Business portfolio • Monitoring concentration of services, clients, vertical domains, geography and technology • Legal and statutory • Internal processes

  34. Managing risk – business portfolio • Business risks • Careful choice of startup clients based on analysis of business plan, promoter’s track record, quality of VC backing, etc • Project execution risks • Iterative solution delivery methodology and use of SEI CMM 5 processes • Legal risks • In-depth analysis of legal issues relating to contracts, to protect Infosys’ interests

  35. Managing risks – monitoring concentration • Monitoring concentration of revenues from: • Service offerings • Vertical domains • Technology • Geography • No client to account for > 10% of revenues • Wide base of clients serviced • Monitoring revenues from start-up clients

  36. Managing risks – legal and statutory • Contractual liabilities • Review and documentation process • Adequate insurance cover • Statutory compliance • Internal legal team • Periodic monitoring of compliance across geographical jurisdictions • Compliance officer • Advice of legal counsel, if required

  37. Managing risks – internal processes • Project execution • Risk management guidelines for identification and mitigation of risks • Body of knowledge - dissemination of methodologies • Encouraging a culture of knowledge sharing • Disaster prevention and recovery • Adherence to ISO9001 and SEI CMM 5 standards ensures that Infosys has a robust disaster prevention system • Technological obsolescence • Evaluated on an ongoing basis • Continual investment in emerging technology infrastructure • Internal control systems • Well defined roles and responsibilities of operating managers • Clearly documented authorization policies

  38. Customers

  39. Managing customer expectations Objective • “Customer-first” is seen as a ethos and a strategic advantage for Infosys in the global market place Coverage through programs for: • Developers • Project leaders • Project Managers and above

  40. I value Customer Delight Managing customer expectations “Customer delight” programme • To strengthen and widen customer oriented awareness in Infosys • To provide a forum for sharing and learning from past experiences of customer interface Activities • Sharing of success stories • Interaction with customers and receiving feedback

  41. Managing customer expectations • Key account management • Improving our ability to acquire, retain and grow large accounts • Developing a differentiated management approach for three types of accounts: • Large • Potentially large by next financial year • Plateau but with potential to be large by next financial year

  42. Investors

  43. Managing investor expectations • Announcing financial results within a reasonable time of the close of the financial period • Reducing investor uncertainty • Recasting financial statements in accordance with internationally accepted accounting principles like US GAAP • Clear and concise discussion and analysis of business condition and results of operations • Inform shareholders of material changes in the company or its operating environment which could have a impact on its functioning and profitability including state of preparedness for the future • Treating all our investors fairly without discrimination: • Avoiding selective disclosures

  44. Managing investor relations The Infosys example: • Timely reporting • Leveraging the power of the internet • Web-casts • Analysts • Investor services • Innovations in financial reporting http://www.infy.com/investor-relations/

  45. Thank you Nandan_MN@infy.com

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