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Case study Published in International conference in Business and Technology March-2013

Case study Published in International conference in Business and Technology March-2013

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  • 1. International Conference on Technology and Business Management March 18-20, 2013 19 Management Control System (MCS) at Infosys Technologies Ltd. – A Case Study Anand Chakravarthi Vignan Reddy Anandc2707@gmail.com vignan.cheruku@gmail.com IBS, Hyderabad Management Control System is a set of formal & informal systems to assist the management in steering the organization towards its goals. Controls help in guiding employees towards achieving such goals. However, establishment of a control system in the environment of distributed accountability, reengineered processes, and local autonomy and empowerment is a challenging task. This study on Infosys Technologies Limited is based on the analysis of control parameters such as Organization Structure; Management Style and Culture; Control Processes; Rewards; and Coordination & Communication. 1. Introduction 1.1 Management Control System (MCS) is a system which is an aggregate of machines and people that work toward a common objective. A system can be described as a series of steps or phases consisting of an input phase, a processing phase, and an output phase. A control system adds measurement, analysis and reporting phases to the system. Output is measured, compared against a plan, analyzed and then reported back to the appropriate earlier phases of the system in the form of positive or negative reinforcement. In MCS, data/information is typically fed back to managers of the various system phases. Responsible managers will then take appropriate action based on the data/information provided. The criteria are organized into five categories that correspond to the generic MCS components. The five categories are: 1. Organization 2. Planning and Budgeting 3. Accounting 4. Analysis 5. Revisions/Access Figure 1: Generic MCS Components
  • 2. International Conference on Technology and Business Management March 18-20, 2013 20 1.2 Important Features of MCS (1) Nature of Decisions: Management control decisions are based on the framework established by the organization’s strategies. They also take into consideration the quantity and quality of resources available. Within these constraints a manager should be able to implement activities that are best suited for a particular business unit. (2) Strategy Implementation Tool: MCS helps an organization to move towards its strategic objectives. It is an important vehicle for the execution of strategy. Fig. 2 given below depicts the Framework for Strategy Implementation. Figure 2: Strategy Implementation Framework (3) Management Process: MCS process involves three interrelated activities – Communication, Motivation and Evaluation. Communication helps the subordinates understand the goals of the organization. The superiors should make sure that the subordinates understand what the organization expects of them. Subordinates should be motivated to put in their best efforts to achieve organizational goals. For effective performance the superiors should evaluate the work of the subordinates and give them their feedback periodically. 1.3 Types of Management Control Systems: Formal and Informal Control systems in an organization fall under two broad areas: Formal and Informal. Formal controls are laid out in writing by the management, whereas informal controls arise as a result of employees’ behavior and culture. Examples of formal controls are planning, budgeting, fixing quotas, and passing rules and regulations. Informal controls are based on the behavior, culture, style and norms of the organization. Formal controls are framed by the management and informal controls begin with employees influenced by socio-economic factors. 2. Need and Importance (Significance) of the Study Enron Corp, Tyco International, World Com and Satyam Computers are some of the examples which illustrate the absence or malfunctioning of control systems which led to huge losses, and even to corporate bankruptcy. Defective products and poor coordination between departments also arise due to weak control systems. Hence there is a need and importance to focus on control systems and understand the working of a successful Multinational company like Infosys Technologies Limited (Infosys). 3. Objectives of study 1. To understand what are the factors which are essential for management control systems to be successful. 2. To study the management control systems being adopted by Infosys based on the analysis of control parameters such as Organization Structure; Management Style and Culture; Control Processes; Rewards; and Coordination & Communication. 3. To examine the challenges faced by Infosys and the benefits derived by it by implementing both formal and informal control processes. 4. Methodology The study is based mainly on secondary data, particularly different websites of Infosys on engineering services, supply chain management, products and platforms, market research, etc., Indiainfoline, Infosys’ annual reports and some standard text books on management control systems. Management Controls Culture Organization Structure HR Management PerformanceStrategy
  • 3. International Conference on Technology and Business Management March 18-20, 2013 21 5. Literature Survey There were some general studies and case studies on different aspects of some of the management control systems. But there appeared to be no specific study based on the analysis of control parameters such as Organization Structure; Management Style and Culture; Control Processes; Rewards; and Coordination & Communication which are focused in this case study. 6. IT Industry Structure and Development Changing economic and business conditions, evolving consumer preferences, rapid technological innovation and adoption, and globalization are driving corporations to transform the manner in which they operate. Companies are now more focused on their core business objectives, such as revenue growth, profitability and asset efficiency. There is an increasing need for highly skilled professionals in the market to help corporations transform their business, optimize operations and drive innovation by leveraging technology. However, enterprises are reluctant to expand their internal IT departments and increase costs. These factors have led to the increased reliance of corporations on their outsourcing providers and are expected to drive future growth for outsourced technology services. According to the Global Tech Market Outlook for 2012 and 2013, an independent report published by Forrester Research Inc. in January 2012, purchases of IT consulting, systems integration services and IT outsourcing by global businesses and governments are estimated to grow by 6.3% in calendar year 2012, when calculated in U.S. dollars. Corporations are increasingly turning to offshore service providers for higher quality, cost competitive technology solutions. As a result, offshore service providers have become critical to the operations of many enterprises and they continue to grow in recognition and sophistication. In view of this, the addressable market for offshore technology services has expanded.  Increasing trend toward offshore technology services Outsourcing the development, management and ongoing maintenance of technology platforms and solutions has become increasingly important to companies. The effective use of offshore technology services offers a variety of benefits to companies, including lower cost of ownership of IT infrastructure, lower labor costs, improved quality and innovation, faster delivery of solutions and more flexibility in scheduling. In addition, technology companies are also recognizing the benefits of offshore service providers in software research and development and related support functions, and are outsourcing a greater portion of these activities. This has resulted in increased diversification in the range of services delivered offshore.  The India advantage India is widely recognized as the premier destination for offshore technology services. According to the NASSCOM Strategic Review 2012, IT services exports (excluding exports relating to business process outsourcing (BPO), hardware, engineering design and product development) from India are estimated to grow by 16.3% in fiscal 2012, to record revenues of US $40 billion. According to the NASSCOM Strategic Review 2012, BPO exports from India are estimated to record revenues of US $16 billion, which is a growth of over 12% compared to fiscal 2011. There are several key factors contributing to the growth of IT and IT-enabled services (ITES) in India and by Indian companies. Some of these factors are high-quality delivery, significant cost benefits and abundant skilled resources. 7. Infosys Technologies Limited ( Infosys) Infosys, started in 1981 by seven people with US$ 250, is today a global leader in the "next generation" of Information Technology (IT) and Consulting, with revenues of US$ 6.604 billion (Q2-FY12). Infosys defines, designs and delivers technology-enabled business solutions for Global 2000 companies. Infosys also provides a complete range of services by leveraging its domain and business expertise and strategic alliances with leading technology providers. Its offerings span business and technology consulting, services, systems, product engineering, custom software development, maintenance, re-engineering, independent testing and validation services, IT infrastructure services and business process outsourcing. Infosys pioneered the Global Delivery Model (GDM), which emerged as a disruptive force in the industry leading to the rise of offshore outsourcing. The GDM is 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.
  • 4. International Conference on Technology and Business Management March 18-20, 2013 22 Infosys has a global footprint with 64 offices and 65 development centers in India, US, China, Australia, Japan, Middle East, UK, Germany, France, Switzerland, Netherlands, Poland, Canada and many other countries. Infosys and its subsidiaries have 141,822 employees as on September 30, 2011. Infosys takes pride in building strategic long-term client relationships. 98.5% of its revenues come from existing customers (Q2 FY 12). Vision and Mission Infosys’ vision is that “it will be a globally respected corporation." Its mission is "strategic partnerships for building tomorrow’s enterprise." Awards  Infosys has consistently been honored by clients, industry bodies, media and other influencers.  Forbes has ranked Infosys 19 among the world's most innovative companies.  Infosys has been identified as one of the top 25 performers in Caring for Climate Initiative by UN Global Compact and UN Environment Program. It is the only global consulting and technology giant in the list.  Infosys was voted India's most admired company in The Wall Street Journal Asia 200 every year since 2000. It was recognized as a top performing global partner by Procter & Gamble (P&G).  Infosys’ Software Development Block 1 at Pocharam campus in Hyderabad, India was awarded the highest LEED rating. This is the fourth Infosys building that has won a Platinum rating, taking the total Platinum-certified building area at Infosys to over 1 million sq. ft.  At Oracle Open World 2012, Infosys won the Oracle Excellence Award for Specialized Partner of the Year – North America in both Financial Management and Human Capital Management categories. 8. Organization Structure (i) Infosys in the beginning Infosys was a start-up founded by 7 individuals. Early days were a constant struggle due to the dynamic environment. Infosys’ focus was on delivering a single product based on single technology in a single marketplace. Low degree of Formalization, low complexity and high centralization were few of the characteristics. (ii) Period from 1989-2002 In 1989, company lost some key accounts which led to a drastic change in the overall strategy. The period after liberalization led to massive growth. Infosys started catering to different market segments and different clients. It had to adhere to a new set of guidelines and streamline process due to the IPO in 1992. Its structure was split up into functional units and the Project Matrix Structure was employed within the production unit. These changes lead to increasing complexity, moderate formalization and moderate degree of centralization. (iii) 2003 Onwards Infosys had become too big to carry on without modifying the existing structure so the concept of decentralization was brought in. The company was divided into IBU’s (India Business Units), each IBU concentrated on a particular sector and this made the company more customer-focused. Managers of each IBU were empowered to take decisions to further the IBU’s prospects and within each IBU the project matrix structure was carried forward. Decentralized system with an ability to take quick decisions was built. 9. Leadership at Infosys Of late, in August 2011, Infosys made changes to the Board.  Mr. N. R. Narayana Murthy – Chairman Emeritus  Mr. K. V. Kamath – Chairman  Mr. S. Gopalakrishnan – Co-Chairman  Mr. S. D. Shibhulal – CEO & MD (i) 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.
  • 5. International Conference on Technology and Business Management March 18-20, 2013 23  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.  To develop deep industry knowledge. Enhance brand visibility. Pursue alliances and strategic acquisitions. (ii) Market Penetration Strategy  Current Markets: USA and Europe  Current Products: ADM, BPO, KPO etc. (iii) Market Development Strtegy  New Market: India, Middle-east and Australia  Current Product: ADM, BPO, KPO etc. (iv) Product Development Strategy  Current Market: USA and Europe  New Product: Consultancy and package implementation services in relatively growing sectors esp. healthcare, life sciences etc. (v) Diversification  New Markets: India, Middle-east and Australia  New product: Consultancy and package implementation services in relatively growing sectors esp. healthcare, life sciences etc. (vi) Concentration  90% of Infosys revenues from American and European nations. (vii) Vertical Integration  Infosys recently bid to acquire a European major – Axon consultancy. (viii) Innovation  The Software Engineering and Technology Labs (SET Labs) at Infosys- centre for technology research in software engineering & enterprise technology.  Infosys promotes a favorable work environment that encourages innovation and meritocracy. 10. Management Style and Culture  Culture at Infosys Culture represents collective norms and behaviors of a group of people be it any region, country or an organization. Organizational or management cultures are the characteristics that are based on morals, values, traditions and personnel behavior. It is generally set by the higher management in an organization and most of the times it acts as a control mechanism. The various dimensions of Management culture are as follows:  Process vs. Result- whether the company focuses more on the manner in which work is done or the outcome.  Job vs. Employee- whether the company focuses more on the work to be done or on its employee’s wellbeing.  Open vs. Closed- whether anyone can fit into the organization or only special few people can join.  Loose vs. Tight Control- management is casual or serious.  Normative or Pragmatic- whether ideologically driven or market driven. According to Mr. Narayan Murthy “It is our vision at Infosys, to create world-class leaders who will be at the forefront of business and technology in today's competitive marketplace”. This has been at the forefront of their management culture. Infosys is often voted as one of the top employers of India for its management culture and
  • 6. International Conference on Technology and Business Management March 18-20, 2013 24 employee friendly practices which often act as their control system as well. Infosys Culture: Infosys stresses that its operations are driven by key values that is called as C-LIFE. 1. Customer Delight: A commitment to surpassing our customer expectations. 2. Leadership by Example: A commitment to set standards in our business and transactions and be an exemplar for the industry and our own teams. 3. Integrity and Transparency: A commitment to be ethical, sincere and open in our dealings. 4. Fairness: A commitment to be objective and transaction-oriented, thereby earning trust and respect. 5. Pursuit of Excellence: A commitment to strive relentlessly, to constantly improve ourselves, our teams, our services and products so as to become the best. Infosys attracts the best talent from across the country through a selection process and the employees are required to go through training process for 14 weeks. In addition all the employees are required to go through some form of training every year and some of the chosen employees are trained at the Infosys Leadership Institute to take on higher responsibilities in the company. Infosys follows a variable compensation structure which is dependent on the performance of the individual and the team as a whole. Thus the company follows a closed culture where only few people who can go through the selection process and training can only fit in. Infosys does take care of its employees by providing facilities from fully furnished Infosys hostels for the trainees to restaurants, movie theatres, swimming pools, gymnasiums and several other facilities in the Infosys Development centers. Moreover it follows an informal culture in office where the employees (seniors and subordinates) address each other by only their first names which facilitates easy and open communication within the organization and in turn motivates the employees to work for the benefit of the organization. Thus it can be concluded that in Infosys, their management culture acts as their control system wherein their result driven attitude and closed culture ensures best output from the employees and refrain them from unethical practices whereas the facilities provided like ESOPs, informal communication practices and sources of entertainment provide motivation for the employees to serve the company.  Drive to Excel: The Organizational culture that emphasizes learning drives to excel in their individual capacities and as team players. Be it technology each client engagement provides unique opportunities to innovate and excel to build next generation technology product or realize IT programs. The spirit of innovation and excellence is most evident in physical, technology, or people infrastructure or in their financial, marketing and quality prices  Continuous Learning: The Organizational commitment to continuous personal and professional development keeps Infosys at the forefront in a fast-changing industry. This learning area includes technology, management, leadership, cultural and communication skills, and other soft skills. Infosys Toastmasters Club - The mission of the club is to provide a mutually supportive and positive learning environment to develop communication and leadership skills of employees.  Fun & Culture: ITL supports arts, culture, or sports. "Art Gallery" on campus dedicated to displaying the works of Info scions. Daily quiz competitions and regular music meetings keep the place abuzz with creativity. Management Style at Infosys Infosys recognizes the importance of staffing, the value of its human resource. So they put lot of attentions towards their assets. They have:-  Long working hours  High variable salary  Stiff dress code policy  Low package than industrial average.  ESOP options  Reward system for overtime pay, merit par & skilled based pay. 11. Balance Scorecard and Compensation Management Balance Scorecard Infosys had always considered its people as its most valuable assets and had looked for opportunities for further improvement in performance, business development by fostering innovation and creativity in the workplace. Infosys has an integrated approach for balance score card. The Key benefits of using this approach are:- • Facilitates shared understanding of business and IT strategy. • Aligns goals and objectives of those involved in IT management.
  • 7. International Conference on Technology and Business Management March 18-20, 2013 25 • Introduces a metrics based culture within the IT organization. • Facilitates better understanding of deviations and the reasons. • Helps identify initiatives to improve capability and competence. Human Resource Aspects Infosys Leadership Institute (ILI) set up in 2001 had an immense impact on the effectiveness of the HRD function at Infosys. The institute was primarily developed so as to groom future talents in the company (i) Performance Appraisal System: The performance appraisal process at Infosys begins not only with performance evaluation but also encompasses the evaluation of individual skills for the tasks assigned to an employee during the assigned period of performance evaluation. In this regard, performance appraisal takes into consideration various performance criteria like timeliness, quality of work, customer orientation, peer satisfaction and performance improvement potential. The company has also launched an internal job posting mechanism and the concept of personal development plans, on the basis of 360 degree feedback. (ii) Compensation and Rewards: The entire organization has restructured its compensations and reward system in order to match the performance of its employees, business needs and the growing scale of operations. The company started following a variable pay structure. At the lowest level, 10 per cent of the salary is variable; it is 30 per cent at the middle level and 50 per cent at very senior levels. Salary at Infosys is linked to the top line, performance of the team and performance of the individual. The company also intends to compensate star performers more aggressively than average or poor performers in a move that has more similarities with American culture which promotes and rewards individual merit. Another remarkable hallmark of Infosys had been its employee stock options plan (ESOP) framework for which the company has made a mark of its own in the industry. Many organizations had decided to adopt the Infosys ESOP system as an effective way to retain their employees.
  • 8. International Conference on Technology and Business Management March 18-20, 2013 26 12. Control Process Reducing cost of compliance using Continuous Controls Monitoring (CCM) is the success of Infosys. Increased globalization, complexity in business environments and higher emphasis on corporate governance drive is the need for compliance. Compliance can be external, i.e., imposed by legislation, or internal, which is driven by organizational policies and procedures. Progressive and matured organizations such as Infosys consider compliance as an enabler to meet business objectives. Their focus goes beyond the requirement of law and use compliance as means to increase process efficiency and stakeholder confidence. CCM assumes a periodic review of controls. It is important to note that for risk and compliance, CCM involves near real-time review, which can be performed only if testing is automated. Hence, automation of testing is the key to Continuous Controls Monitoring. Initially, compliance was virtually non-existent since there were only few frameworks available. Internal control did not involve testing and assessment and internal audit was largely concerned as group reporting to Chief Financial Officers (CFO) and not the audit committee. The Sarbanes Oxley Act, 2004 was the landmark legislation for compliance despite which companies faced lack of defined processes for compliance. However, as compliance evolved, organizations realized that automation, i.e., control execution and compliance program management, was key to reduced cost of compliance. CCM helps reduce the cost of compliance through:  Reduced Effort: Automated testing of controls reduces effort for review.  Reduced Audit Cost: Auditors place greater reliance on automated testing and reduce effort on substantive testing.  Increased Frequency of Audit: CCM enables more frequent audit with reduced cost.  Multi-Compliance Capability: CCM supports compliance with multiple regulations thereby ensuring controls are tested only once. 13. Infosys’ Global Delivery Model (GDM) The salient features of GDM are outlined below:  The large scale software development projects were divided into 3 categories:  The first category included tasks that were to be carried out at the location of the client.  The second category included tasks that needed to be carried out closer to the client.  The third category consisted of tasks that could be done in remote locations, where process- driven technology centers with highly skilled manpower were easily available.  The project work was carried out with teams located at different locations across the world working round-the-clock on the project.  Infosys used two types of Global Development Centers (GDCs) – Proximity Development Centers (PDCs) and Offshore Development Centers (ODCs) to carry out the activities related to software development.  The major components of GDM included – knowledge capture, daily handoffs, quality control, continuous improvement, mobilizing and demobilizing staff as required, recruiting and training the right kind of people, billing for cross-border teams and connectivity of the locations.  Infosys developed People Knowledge Map which had contact information of the individuals who were expert in specific areas so that people working on a particular project could contact them in need.  Infosys benchmarked its IT services against international quality standards like ISO 9000, CMM and the Malcolm Baldrige framework.  Infosys used the services of several service providers along with a mix of satellite and fiber optic links with facilities for alternate routing. Video conferencing was used for executive level discussions and training.  As a part of expansion, Infosys launched GDM Plus, an enhanced service delivery model, a combination of more services and excellence in execution. GDM Plus was Infosys’ strategic response to changing market conditions and the competitive landscape to deliver high volumes to customers. Execution excellence was to be achieved through business solutions, technology, domain expertise, quality, operational efficiency and people development. Advantages from GDM  Rapid growth in revenues  Lower risks  Talented workforce
  • 9. International Conference on Technology and Business Management March 18-20, 2013 27  Best results  Flexibility  Round the clock productivity  Faster response  Shorter lead time  Cost benefits Results after the implementation of GDM  Infosys’ revenues grew four-fold in the past four years and it also continued attracting a pool of high quality talented professional.  In 2005-06, Infosys derived more than 40% of its revenues through new GDM based services like package implementation, independent validation, business process management, infrastructure management and systems integration.  The benefits to clients included 35% reduction in cost and 75% reductions in time to market for various products across various geographical regions. 14. Coordination and Communication It is a well known fact that a sincere two way dialog is very important for any business organization to win and keep the trust of its stakeholders. Infosys has always tried to earn respect from its stakeholders by understanding what is critical and material to each one of them and addressing their needs in a balanced way. At Infosys, the stakeholders have been classified as direct and indirect based on the interactions with them. Appropriate tools and methodologies are used to engage with the stakeholders and identify the key material issues. Periodic communication on the progress of material aspects concerning the stakeholders is done using the appropriate channels. Detailed discussions and review with the Board, Committees of the Board, senior management and other stakeholders across the organization at regular intervals allows Infosys to work consistently towards delivering to the expectations of the direct and indirect stakeholders. The information needs of the diverse stakeholder groups are also analyzed and appropriate forums and platforms are created for effective communication. These are evaluated periodically, modified or renewed based on feedback and efficiency. Infosys has always ensured that they have open and collaborative communication channels with their customers, employees, investors and vendors.  Intensive customer interaction As an IT services company, Infosys has a commitment to exceed the customer expectations as one of it defined values. They make use of CSAT, an annual Customer Satisfaction Survey, to gauge the satisfaction of their customers globally. This survey enables the customers to rate the company on key parameters, including comparison with other global IT service companies. The company then analyzes the feedback and identifies key
  • 10. International Conference on Technology and Business Management March 18-20, 2013 28 areas for improvement like business strategy, people capabilities, delivered solutions and services and innovation. Infosys’ annual customer leadership summit is held for customers in Europe, Middle East and for customers in Americas. Selected senior executives from global organizations share their ideas and best practices in the areas of innovation, business, leadership and other sustainability aspects.  Facilitating employee-employer dialog The company treats their employees as their greatest assets and value their opinion and feedback to improve the company’s performance as an employer. The company has developed multiple channels to enable employees to express their opinions and participate in organization specific policy and process definition exercises. These include: Employee Satisfaction Survey, Quarterly Town Hall, Sparsh (name of the company’s internet), Infy TV, CEO Employees Column, HRD Blog, HEAR (Hearing Employee and Resolving), ASHI (Anti Sexual Harassment Initiative), and STRAP (Strategic and Action Planning meet). Further, AGM is the most important forum for direct communication with the investors. A report on the company’s operations and financials along with select highlights is presented to all shareholders who attend the meeting in person or view it on the company website. 15. Challenges  MNCs like Accenture, IBM Global Services, and Electronic Data Systems have started operating from India and began offering the same offshore rates as Indian companies.  The entry of multinationals has put pressure on Infosys in terms of retaining talented manpower.  Infosys faced stiff competition from other Indian IT companies which were adopting new structures.  Infosys and its GDM were heavily dependent on US-based companies. Since the IT spending of the US companies was decreasing and was expected to reduce further, it could put Infosys in a tight spot.  Infosys also faced growing competition from countries like China and the Philippines which were offering lower wages and more facilities. 16. Conclusions  Infosys is divided into IBU’s, each IBU concentrated on a particular sector and this made the company more customers focused. Managers of each IBU are empowered to take decisions to further the IBU’s prospects and within each IBU the project matrix structure is carried forward. Decentralized system with an ability to take quick decisions is the key to success of its organization structure.  Infosys believes that people are the core assets and their empowerment is the key to scalability and longevity. Infosys believes in respect, dignity, fairness and inclusiveness to get the best out of employees. It reflects the most ideal culture and the best style of the organization. Infosys’ management style and treatment of employees have won it many laurels. Infosys has been ranked three times in five years as The Best Company to work for in India by research firm Mercer Human Research Consulting and business magazine Business Today.  Infosys has been successfully adopting both formal control systems like planning, budgeting and reporting and informal control systems like goal oriented behavior leading to improvement in productivity and achievement in organizational change constantly.  Infosys was ranked 62nd in 2005 as one of the World’s Most Respected Companies in the Financial Times-PwC annual survey. And Business Week ranked Infosys amongst the top three IT services company in the world. Creating a multicultural outlook for a company that has employees from 53 nationalities is not easy, but essential to truly leverage the power of globalization and achieve long- term survival.  Focus on human resources is the core strength of Infosys. Infosys believed that its continued success relied heavily upon its ability to recruit, train, deploy, and retain highly talented IT professionals. In this rapidly changing world of business, the traditional measures of performance appraisals and reward system are insufficient for making strategic decisions in a large multinational company like Infosys. Use of Balanced Scorecard as a strategic planning and communicating device by Infosys is the right way of using a management control tool to prevent control failures or at least identify them early.  Infosys pioneered the Global Delivery Model, which emerged as a disruptive force in the industry leading to the rise of offshore outsourcing and the same is 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. This success is the result of the best management control systems adopted by Infosys in its operations management like Continuous Controls Monitoring.
  • 11. International Conference on Technology and Business Management March 18-20, 2013 29  Periodic communication on the progress of material aspects concerning the stakeholders using the appropriate channels and detailed discussions and review with the Board, Committees of the Board, senior management and other stakeholders at regular intervals allows Infosys to work consistently towards delivering to the expectations of the stakeholders. Thus Infosys was always good at coordinating and communicating the various activities of the organization to different parties like customers, employees, investors and vendors which is a part of the best management control system. 17. Recommendations  Infosys has the first mover advantage in the domain but in order to retain the skilled employees under highly competitive scenario it needs to come up with some schemes for the employees. It could hike the salaries or increase the perks that it has been offering so far.  As Infosys was a pioneer with the GDM model, it has already gained an expertise on this front and can try discovering newer horizons and think of newer services that can be provided to the existing and prospective customers. As the competitors are still trying to build their model from scratch, it will take them time to acquire skills to the GDM model as well as to compete with the newer services that Infosys would offer in the future. 18. References 1. “Management Control Systems” by Robert N Anthony and Vijay Govindarajan-Tata McGraw-Hill 2011. 2. Anthony’s “Org Structure, MCS patterns -Tata McGraw-Hill Education” 2011. 3. R.J Reddy’s “Management Control Systems” General MCS Pattern 2010. 4. Infosys Limited Engineering Docs “http://www.infosys.com/engineering-services/case- studies/Pages/plant-management-control.aspx” 2012. 5. Infosys Products and Platforms Docs “http://www.infosys.com/products-and-platforms/alert-case- management-system/benefits/pages/index.aspx” 2012. 6. Infosys Supply chain Docs “http://www.infosys.com/supply-chain/case-studies/Pages/index.aspx” 2012. 7. Infosys market research Docs “http://www.indiainfoline.com/Markets/Company/Fundamentals/Management-Discussions/Infosys- Ltd/500209” 2012.