The Official Blog of the Goa Institute of Management

Sunday, 3 April 2011

Organisation Structure Design Study of Infosys

 
Infosys
  • Global Headquarters: Bangalore, India
  • Founded in 1981
  • Global Presence: 36 Sales Offices in 17 countries, 37 Global Development Centres
  • Infosys is one of the largest IT companies in India with 122,468 employees (including subsidiaries) as of 2010.
  • It has offices in 33 countries and development centres in India China, Australia, UK, Canada and Japan.
  • Vision
    • "We will be a globally respected corporation."
  • Mission
    • "To achieve our objectives in an environment of fairness, honesty, and courtesy towards our clients, employees, vendors and society at large."

Founder’s key to building Infosys

  • Leadership
    • Raise aspirations
    • Motivate employees
    • Mentor for responsibilities
  • Vision
    • Noble vision
    • Elevating self-esteem
    • Benefitting everyone
  • Benchmarking
    • Global standards
  • Measuring to improve
    • Measures critical attributes
    • Improves
  • Shared values
    • Enduring value system
    • Finest corporate governance system
Values and Organization Culture
  • Values - CLIFE
    • Customer Delight
    • Leadership by example
    • Integrity
    • Fairness
    • Pursuit of Excellence
  • Culture
    • Spirit of innovation
    • Continuous personal & professional development
    • Excellence
  • Implementation methods
    • Infosys leadership institute
    • Training programs
Organizational Process
  • Systematic way a company defines organizes and implements its operations through the stages of the product life cycle.
  • Include strategic measures to improve business performance, proprietary models and intellectual property that contribute to an organizations goals and objectives.
  • 3 stages of organizational process
    • Embryonic stage - the group of activities related to defining and analysing the initial requirements
    • Developmental stage - organization of resources in preparation for the implementation of the company’s business objectives takes place
    • Implementation stage - the integration of the company’s core business activities.
  • Global Delivery Model is the most important process followed by Infosys.
  • Based on the principle of taking work to the location where the best talent is available, where it makes the best economic sense, with the least amount of acceptable risk.
  • In a project team, team members become role sender and role receivers
  • Focal role is that of a project manager.
  • Role clarification and role mission are very important in this case.
Infosys’ Competitive Edge
  • Named India’s most respected company in business-World 2011 survey for the 9th consecutive time.
  • Adjudged India’s best managed company in a study conducted by Business Today
  • Forbes: “Infosys is India’s role model company”.
  • “Dream company to work for” in India and amongst the “100 best places to work for in IT” in US.
  • BusinessWeek: ”Among the top 3 IT service companies in the world”.
  • Wired rated Infosys among its top 40 companies that have reshaped the global economy.
  • Infosys is maintaining its competitive edge due to many factors, out of which organization structure is the main factor. Around 90% of the total revenue comes from repeat business that highlights the faith of the clients in Infosys.
Competitive Edge – IBU Structure
  • Software programmers who wrote custom applications for corporations are able to leverage past experience most effectively.
  • To achieve these economies of experience, the primary organizational construct within Infosys is the industry business unit (IBU). IBU are very nice example of using both centralization and decentralization.
  • The company assigns new employees to an IBU and they tend to stay there for several years.
  • In multidivisional organizations, an IBU structure can greatly facilitate strategy-implementation efforts. It establishes coordination between divisions having common strategic interests facilitates strategic management and control of large, diverse organization, Fixes accountability at the level of distinct business units.
Competitive Edge
  • Every operation is expected to be “PSPD” – predictable, sustainable, profitable and de-risked.
  • Infosys uses Global Deliver system (GSD) which is most successful outsourcing model amongst all other models.
  • GDM enables its customers to leverage varied locations across the globe that provide optimized values for every component, advantage of covering 24x7 service spread, lower cost of ownership, domain expertise and increased quality of deliverables.
To summarize, the strengths of people, process and technology converge seamlessly within Infosys to fulfil client’s end to end IT needs.
 
 
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Organization Structure

Infosys in the beginning
  • Infosys was a start-up founded by 7 individuals.
  • Early days were a constant struggle
  • Dynamic Environment.
  • Companies focus was on delivering a single product based on single technology in a single marketplace.
  • Low degree of Formalization, low complexity and high centralization.
Period from 1989 - 2002
  • In 1989, company lost some key accounts.
  • Drastic change in the overall strategy.
  • The period after liberalization led to massive growth.
  • Started catering to different market segments and different clients.
  • Company had to adhere to a new set of guidelines and streamline process due to the IPO in 1992.
  • The company structure was split up into functional units.
  • Project Matrix Structure was employed within the production unit.
  • Characterized by increasing complexity, moderate formalization and moderate degree of centralization.
2003 onwards
  • Company had become too big to carry on without modifying the existing structure.
  • Concept of decentralization was brought in.
  • Company divided into IBU’s. Each IBU concentrated on a particular sector.
  • Made the company more customers focused. A Gamma B transformation.
  • Managers of each IBU were empowered to take decisions to further the IBU’s prospects.
  • Role Enlargement and Role Specialization.
  • Decentralized system with an ability to take quick.
  • Crucial as a result of the dynamic world order after the Sept 11 attacks and Asian financial crisis.
  • Within each IBU the project matrix structure was carried forward.
  • In 2007, the IBU concept was further refined to take into account geographic growth opportunities.
  • The 2007 reorganization was also for role enlargement of the second line of business leaders.
The McKinsey 7S Framework
  • By Tom Peters and Robert Waterman: Helps analyse how well the organization is positioned to achieve its intended objective.
    • The 7S model can be used in a wide variety of situations where an alignment perspective is useful, for example to help you:
    • Improve the performance of a company.
    • Examine the likely effects of future changes within a company.
    • Align departments and processes during a merger or acquisition.
    • Determine how best to implement a proposed strategy.
  • The McKinsey 7S model can be applied to elements of a team or a project as well. The alignment issues apply, regardless of how you decide to define the scope of the areas you study.
  • The McKinsey 7S model involves seven interdependent factors which are categorized as either "hard" or "soft" elements
  • "Hard" elements are easier to identify and management can directly influence them: These are strategy statements; organization charts and reporting lines; and formal processes and IT systems.
  • "Soft" elements, on the other hand, can be more difficult to describe, and are less tangible and more influenced by culture.
The McKinsey 7S Framework

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  • Placing Shared Values in the middle of the model emphasizes that these values are central to the development of all the other critical elements.
  • The company's structure, strategy, systems, style, staff and skills all stem from why the organization was originally created, and what it stands for. 
  • The original vision of the company was formed from the values of the creators.
  • As the values change, so do all the other elements.
Organization Strategy
  • Infosys has adopted a client-focused strategy to achieve growth
  • Focuses on limited number of large organizations throughout world
  • Infosys commands premium margins
  • Company has a image of quality driven model rather than cost-differentiating model
  • Increase business from existing and new clients.
  • Expand geographically
  • Enhance solution set
  • It has added new service offerings, such as consulting, business process management, systems integration and infrastructure management, which are major contributors to its growth.
  • Develop deep industry knowledge Enhance brand visibility Pursue alliances and strategic acquisitions
  • MARKET PENETRATION STRATEGY:
    • Current Markets: USA and Europe
    • Current Products: ADM, BPO, KPO etc.
  • MARKET DEVELOPMENT STRATEGY:
    • New Market: India, Middle-east and Australia
    • Current Product: ADM, BPO, KPO etc.
  • PRODUCT DEVELOPMENT STRATEGY:
    • Current Market: USA and Europe
    • New Product: Consultancy and package implementation services in relatively growing sectors esp. healthcare, life sciences etc.
  • DIVERSIFICATION:
    • New Market: India, Middle-east and Australia
    • New product: Consultancy and package implementation services in relatively growing sectors esp. healthcare, life sciences etc.
Other Strategies
  • CONCENTRATION:
    • 90% of Infosys revenues from American and European nations.
    • VERTICAL INTEGRATION:
      • Infosys recently bid to acquire a European major – Axon consultancy.
  • INNOVATION:
    • The Software Engineering and Technology Labs (SET Labs) at Infosys- centre for technology research in software engineering & enterprise technology
    • Infosys promotes a favourable work environment that encourages innovation and meritocracy.
  • GENERIC STRATEGIES
    • Little differentiation in low-end services of value chain; high differentiation in high end services of value chain like software products and package solutions.
    • Focus on quality, customer relationship management, and timely-delivery.
The Dimensions: Creating Balance

Infosys pioneered the Global Delivery Model (GDM) to ensure the distribution of application and business process lifecycle activities and resources.

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Differentiation v/s Integration
  • There is high degree of Integration in the company.
  • There are onsite and fixed office teams working on same projects and integrating at the end.
  • There is bi-directional flow of information between the teams.
Centralization v/s Decentralization
  • There cannot be a clear distinction between centralization and decentralization in case of Infosys.
  • There are small organic teams which do not follow stringent rules and codes.
  • But Infosys at a holistic level has complete centralization within its operations and organization.
  • So, the structure followed by Infosys is Contingency structure which incorporates both Centralization and Decentralization.
Standardization v/s Mutual Adjustment
  • At the holistic level it strictly follows a Standardized structure in which each and every individual has to follow certain rules and regulations before taking any step or implementing any new policy.
  • From the mouths of employees of Infosys-“ We need to request and take permission even before installing a new software or any third party application in our company systems.”
  • But wherever small organic teams come into picture a bit of mutual adjustment is induced implicitly.

6 comments:

  1. good informative..and i like to do an oraganisation study in infosys trivandrum ...so how can i do it there? and what all are the procedures?

    ReplyDelete
  2. good informative..and i like to do an oraganisation study in infosys trivandrum ...so how can i do it there? and what all are the procedures?

    ReplyDelete
    Replies
    1. You mean to say you want to post it on the blog?

      Delete
  3. Good study...it gives lot of informations about an organization how it should be...

    ReplyDelete
  4. Nice article. Good way of explaining the progress journey of Infosys. Now Infosys is one among the top IT companies in India. Salute to Sudha Murthy and Narayan Murthy.

    ReplyDelete
  5. nice article......packed with a lot of information!! VERY HELPFUL. THANKS A LOT

    ReplyDelete