History of infosys


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History of infosys

  1. 1. GURUNANAK COLLEGE OF ARTS,SCIENCE & COMMECE.<br />NAME: BHIMA<br />ROLL NO : 25<br />S.Y.B.M.M<br />SUBJECT: ORGANISATION BEHAVIOUR.<br />DATE:27/2/2011<br />TOPIC : INFOSYS.<br />SUBMITTED TO:<br /> PROF. KETAN VIRA<br />HISTORY OF INFOSYS.<br />Infosys was founded on 2 July 1981 by seven entrepreneurs, Nagavara Ramarao Narayana Murthy, Nandan Nilekani, Kris Gopalakrishnan, S. D. Shibulal, K Dinesh and with N. S. Raghavan officially being the first employee of the company. The founders started the company with an initial investment of INR 10,000. The company was incorporated as "Infosys Consultants Pvt Ltd." in Model Colony, Pune as the registered office.<br />infosys went public in 1993. Interestingly, Infosys IPO was under subscribed but it was bailed out by US investment banker Morgan Stanley which picked up 13% of equity at the offer price of Rs. 95 per share. The share price surged to Rs. 8,100 by 1999. By the year 2000 Infosys's shares touched Rs. 310 before the catastrophic incident of September 11th, changed all that.<br />According to Forbes magazine, since listing on the Bombay Stock Exchange till the year 2000, Infosys' sales and earnings compounded at more than 70% a year. In the year 2000, President of the United States Bill Clinton complimented India on its achievements in high technology areas citing the example of Infosys.[11] Infosys will invest $100 million (Rs 440 crore) on establishing a 20,000-seater campus in Shanghai.<br />In 2001, it was rated Best Employer in India by Business Today.Infosys was rated best employer to work for in 2000, 2001, and 2002 by Hewitt Associates. In 2007, Infosys received over 1.3 million applications and hired fewer than 3% of applicants.<br />Infosys was the only Indian company to win the Global MAKE (Most Admired Knowledge Enterprises) award for the years 2003, 2004 and 2005, and is inducted into the Global Hall of Fame for the same<br />Read more about the defining moments in Infosys' history.<br />Milestones<br />2009<br />Infosys selected as a member of The Global Dow <br />Employee strength grows to over 100,000 <br /> <br />2008<br />Infosys crosses revenues of US$ $ 4.18 billion <br />Annual net profits cross US$ 1 billion <br /> <br />2007 <br />Infosys crosses revenues of US$ 3 billion. Employees grow to over 70,000+ <br />Kris Gopalakrishnan, COO, takes over as CEO. Nandan M. Nilekani is appointed Co-Chairman of the Board of Directors <br />Opens new subsidiary in Latin America <br />Reports Q2 revenue of over US$ 1billion <br /> <br />2006 <br />Infosys celebrates 25 years. Revenues cross US$ 2 billion. Employees grow to 50,000+ <br />N. R. Narayana Murthy retires from the services of the company on turning 60. The Board of Directors appoints him as an Additional Director. He continues as Chairman and Chief Mentor of Infosys <br /> <br />2005 <br />Records the largest international equity offering of US$ 1 billion from India <br />Selected to the Global MAKE Hall of Fame <br /> <br />2004 <br />Revenues reach US$ 1 billion <br />Infosys Consulting Inc. is launched <br /> <br />2003 <br />Establishes subsidiaries in China and Australia <br />Expands operations in Pune and China, and sets up a Development Center in Thiruvananthapuram <br /> <br />2002 <br />Touches revenues of US$ 500 million <br />Nandan M. Nilekani takes over as CEO from N.R. Narayana Murthy, who is appointed Chairman and Chief Mentor <br />Opens offices in The Netherlands, Singapore and Switzerland <br />Sponsors secondary ADS offering <br />Infosys and the Wharton School of the University of Pennsylvania set up The Wharton Infosys Business Transformation Awards (WIBTA) <br />Launches Progeon, offering business process outsourcing services <br /> <br />2001 <br />Touches revenues of US$ 400 million. Opens offices in UAE and Argentina, and a Development Center in Japan <br />N. R. Narayana Murthy is rated among Time Magazine/CNN's 25 most influential businessmen in the world <br />Infosys is rated as the Best Employer by Business World/Hewitt <br /> <br />2000 <br />Touches revenues of US$ 200 million <br />Opens offices in France and Hong Kong, a global development center in Canada and UK, and three development centers in the US <br />Re-launches Banks 2000, the universal banking solution from Infosys, as Finacle™ <br /> <br />1999 <br />Touches revenues of US$ 100 million. Listed on NASDAQ <br />Infosys becomes the 21st company in the world to achieve a CMM Level 5 certification <br />Opens offices in Germany, Sweden, Belgium, Australia, and two development centers in the US <br />Infosys Business Consulting Services is launched <br /> <br />1998 <br />Starts enterprise solutions (packaged applications) practice <br /> <br />1997 <br />Opens an office in Toronto, Canada <br />Infosys is assessed at CMM Level 4 <br /> <br />1996 <br />The Infosys Foundation is established <br /> <br />1995 <br />Opens first European office in the UK and Global Development Centers at Toronto and Mangalore. Sets up e-Business practice <br /> <br />1994 <br />Moves corporate headquarters to Electronics City, Bangalore. Opens a Development Center at Fremont <br /> <br />1993 <br />Introduces Employee Stock Options (ESOP) program <br />Acquires ISO 9001/TickIT certification <br />Goes public <br /> <br />1987<br />Opens first international office in Boston, US <br /> <br />1983 <br />Relocates corporate headquarters to Bangalore <br /> <br />1981<br />Infosys is established by N. R. Narayana Murthy and six engineers in Pune, India, with an initial capital of US$ 250 <br />Signs up its first client, Data Basics Corporation, in New York .<br />Vision:<br />To be a globally respected corporation that provides best-of-breed business solutions leveraging technology delivered by best-in-class people.<br />Mission:<br />To achieve objectives in an environment of fairness, honesty, and courtesy towards clients, employees, vendors andsociety at large.<br />Headquarters &Branches<br />Its corporate headquarter is situated in Bangalore<br />Branches in India<br />Bhubaneshwar<br />Chennai<br />Jaipur<br />Mysore<br />Chandigarh<br />Hyderabad<br />Mumbai<br />Thiruvananthapuram<br />New Delhi<br />Gurgaon<br />Pune<br />Branches in abroad<br />America<br />Australia<br />Europe<br />Middle East Africa<br />Overall number of employees<br />Infosys and its subsidiaries have 103,905 employees as on June 30, 2009.<br />Turnover<br />Infosys with a turnover of $753 million in the last financial year, has a market cap of $12.13 billion.<br />Organization structure<br />Infosys Members of the Board<br />Srinath BatniDirector and Head, Delivery Excellence <br />K.DineshDirector and Head, Communication Design Group,<br />Information Systems and Quality and Productivity<br />T.V. Mohandas PaiDirector and Head, Finacle, Admin, Human Resources, Infosys Leadership Institute and Education and Research<br />S.D. ShibulalChief Operating Officer and Member of the Board<br />S.GopalakrishnanChief Executive Officer and Managing Director<br />N.R.Narayana MurthyChairman of the Board and Chief Mentor<br />Independent Directors<br />Rama BijapurkarIndependent Director<br />Dr.Omkar GoswamiIndependent Director<br />Sridar IyengarIndependent Director<br />David L.BoylesIndependent Director<br />Deepak M. SatwalekarLead Independent Director<br />Dr.Marti G. SubrahmanyamIndependent Director<br />Claude SmadjaIndependent Director<br />K.V. KamathIndependent Director<br />Jeffrey Sean LehmanIndependent Director<br />Business and Department Heads<br />V. Balakrishnan<br />Chief Financial Officer, Infosys Technologies<br />Subhash Dhar<br />Senior Vice President and Head, Global Sales, Alliances and Marketing<br />Head, Communications, Media and Entertainment, Infosys TechnologiesExecutive Council Member<br />B.G. Srinivas<br />Senior Vice President, Manufacturing; Product Engineering; Product Lifecycle and Engineering Solutions, Infosys Technologies<br />Executive Council Member<br />Chandra Shekar Kakal<br />Senior Vice President and Global Head, Enterprise Solutions, Infosys Technologies<br />Executive Council Member<br />Ashok Vemuri<br />Senior Vice President and Global Head, Banking and Capital Markets; Strategic Global Sourcing, Infosys Technologies<br />Executive Council Member<br />Amitabh Chaudhry<br />Chief Executive Officer and Managing Director, Infosys BPO<br />Head, Independent Validation Solutions, Infosys Technologies<br />M.D. Ranganath<br />Chief Risk Officer, Infosys Technologies<br />Prabhakar Devdas Mallya<br />Vice President and Head, Security Audit and Architecture, Infosys Technologies<br />Dheeshjith V.G.<br />Head, New Markets and Services, Infosys TechnologiesMember of the Board, Infosys Australia and Infosys China<br />Girish G Vaidya<br />Senior Vice President and Head, Infosys Leadership Institute<br />Subrahmanyam Goparaju<br />Vice President and Head, Software Engineering and Technology Labs (SETLabs), Infosys Technologies<br />Nandita Gurjar<br />Senior Vice President and Group Head, Human Resources, Infosys Technologies<br />Binod Hampapur Rangadore<br />Senior Vice President and Head, India Business, Infosys Technologies<br />Ritesh Idnani<br />Vice President and Head, Global Sales<br />Business and Department Heads (cont<br /> Ramadas Kamath U.<br />Senior Vice President, Administration,Commercial Facilities, Infrastructure and Security, Infosys Technologies<br /> Jackie Korhonen<br />Managing Director and Chief Executive Officer, Infosys Technologies, Australia<br />K. Murali Krishna<br />Vice President, Computers and Communications Department, Infosys Technologies<br />Satyendra Kumar<br />Senior Vice President, Quality, Tools and Software Reuse, Infosys Technologies<br />Haragopal Mangipudi<br />Vice President and Head, Finacle, Infosys Technologies<br />Sridhar Marri<br />Vice President, Communication Design Group, Infosys Technologies<br />Srikantan Moorthy<br />Vice President and Head, Education and Research, Infosys Technologies<br />Stephen R. Pratt<br />CEO and Managing Director, Infosys Consulting<br />Head, Consulting Solutions, Infosys Technologies<br />Suryaprakash K<br />Vice President, Information Systems, Infosys Technologies<br />Sanjay Purohit<br />Vice President and Head, Corporate Planning and Business Assurance, Infosys Technologies<br />Pravin Rao<br />Senior Vice President, Retail, Consumer Packaged Goods, Logistics and Infrastructure Management Services, Infosys Technologies Director, Infosys Australia<br />Eric Paternoster<br />Senior Vice President and Head, Insurance, Healthcare and Life Sciences, Infosys Technologies<br />Director, Infosys BPODirector, Infosys Technologies, Sweden<br />Prasad Thrikutam<br />Senior Vice President and Head, Energy, Utilities and Services, Infosys TechnologiesDirector, Infosys China<br />Culture of Infosys:<br />Life here at Infosys is brimming with events - where employees can pursue their interests in areas as varied as arts, culture, or sports. The objective is to ensure that employees are not confined to their desks. Employees express their various skills and interests through forums that include an "Art Gallery" on campus dedicated to displaying the works of Infoscions, daily quiz competitions, and regular music meetings that keep the place abuzz with creativity. Inculcom is the base organization that hosts cultural programs for Infoscions. Each event emphasizes a specific area like music, dance, or quiz. These programs are generally not competitive, but a competitive element is sometimes added to enhance enthusiasm and to bring out the best in our people. Under Inculcom, there are sub groups like the IQ Circle (Quizzes), Shruthi (the classical music club), Dramatix (the drama club), and Vakchaturya (forum for self development).<br />The key to employee involvement in organizations is the sharing of information about business performance, plans, goals, and strategies. What happens by a shout across the corridor in a smaller organization, calls for a more systematic process in a large organization like ours. InSync is our internal communication program focused on keeping the Infoscion abreast of latest corporate and business developments, and equipping him or her to be a "brand ambassador" for the company. This program combines a communication portal with workshops, monthly <br />newsletters, articles, daily cartoons and brainteasers to synchronize each Infoscion with the organization.<br />The spirit of innovation, continuous personal and professional development and excellence is most evident in how the company builds and manages physical, technology, or people infrastructure or in financial, marketing, and quality practices. <br />Initiatives such as the Infosys Leadership Institute are meant for ongoing management development and personal improvement. A host of technology advancement and other ongoing training programs meet the different learning needs of employees in specific areas of technology, management, leadership, cultural and communication skills, and other soft skills.<br />H.R PLANNING :<br />Recruitment Targets for Infosys:<br />YEARNO.OF EMPLOYEES2001100002002110002003130002004150002005180002006250002007-200835000<br />According to T.V. Mohandas Pai, head of human resource development and education and research, Infosys, the company added 5,947 employees (net addition 2,586) in fourth fiscal quarter of 2007-2008, and 33,177 employees (net 18,946) in the full year.<br />In the ongoing year, the company plans to hire 25,000 people (8000 lower than last year) with nearly 18,000 people to be hired from various campuses in the country, taking the total number of employees from the present 91,187 to over 100,000, he said."We have already made campus offerings of 18,000 for this fiscal," Pai said. The company also plans to hire as many locals in the US, Europe, Australia, China and Mexico where it has set up development centers, he continued.<br />The attrition rate has come marginally to 13.4 percent in fiscal 2008 as against 13.7 percent during the previous period, while the utilization rate has been at 76 percent as against 68.4 percent during the previous corresponding period, he added.The average salary hike this year would be between 11-13 percent (compared to 12-15 percent announced last year) for its Indian employees and 4-5 percent for overseas employees, Pai said.<br />Nonetheless, the wage hike for the Indian staff would shave off 2.3 percent from the company's profit margins in the June quarter, while costs of processing visas would impact margins by 80 basis points (0.80 percent) in the same quarter, V. Balakrishnan, CFO, Infosys, said.Infosys has a training center in Mysore with a capacity to train 13,500 candidates every quarter - the largest training facility in the world. The campus also provides accommodation for 10,000 candidates and teaching staff.The company, which has been investing about Rs.700 crore ($175 million) each year towards training its employees, plans to invest Rs.1,000 crore ($250 million) more towards training next fiscal, Pai said.<br />Last year, over 1.3 million people applied for a job at Infosys. Only 1% of them were hired. In comparison, Harvard College took in 9% of candidates.<br />Infosys has always focused on inducting and educating the best and the brightest. With global hiring practices, coupled with ever-expanding university programs such as Campus Connect and development centers across the globe, Infosys is able to source and nurture talent while delivering lasting value to clients.<br />Infosys, which trains over 15,000 new recruits every year, is well prepared to win the battle for top-notch talent. At the heart of this education program is a fully equipped $120 million facility in Mysore, about 90 miles from Bangalore.<br />HR policies in infosys<br />Internally developed code of conduct and policies to guide us The following policies on various sustainability issues are adopted uniformly through out the reporting entity<br />. HIV (+) & AIDS CONTROL POLICY Infosys would take measures to prevent the incidence and spread of HIV and AIDS in the society. In case of need, the company would arrange to provide counseling and medical guidance to these patients and their families. <br />QUALITY POLICY Consistent with the group purpose, Infosys shall constantly strive to improve the quality of life of the communities it serves through excellence in all facets of its activities. We are committed to create value for all our stakeholders by continually improving our systems and processes through innovation, involving all our employees. This policy shall form the basis of establishing and reviewing the Quality Objectives and shall be communicated across the organization. The policy will be reviewed to align with business direction and to comply with all the requirements of the Quality Management Standard. ENVIRONMENTAL, OCCUPATIONAL HEALTH & SAFETY POLICY <br />Infosys reaffirms its commitment to provide safe working place and clean environment to its employees and other stakeholders as an integral part of its business philosophy and values. We will continually enhance our Environmental, Occupational Health & Safety (EHS) performance in our activities, products and services through a structured EHS management framework. Towards this commitment, we shall; <br />* Establish and achieve EHS objectives and targets. * Ensure compliance with applicable EHS legislation and other requirement and go beyond. * Conserve natural resources and energy by constantly seeking to reduce consumption and promoting waste avoidance and recycling measures. * Eliminate, minimize and/or control adverse environmental impacts and occupational health and safety risks by adopting appropriate "state-of-the-art" technology and best EHS management practices at all levels sand functions. * Enhance awareness, skill and competence of our employees and contractors so as to enable them to demonstrate their involvement, responsibility and accountability for sound EHS performance. HUMAN RESOURCE POLICY Infosys recognizes that its people are the primary source of its competitiveness. It is committed to equal employment opportunities for attracting the best available talent and ensuring a cosmopolitan workforce. It will pursue management practices designed to enrich the quality of life of its employees, develop their potential and maximise their productivity. It will aim at ensuring transparency, fairness and equity in all its dealings with its employees. Infosys will strive continuously to foster a climate of openness, mutual trust and teamwork. ALCOHOL AND DRUGS POLICY Infosys believes that the loyalty and commitment of its employees depend upon the quality of life they are offered at work and at home. We recognize that indiscriminate use of alcohol and drugs is injurious to the wellbeing of individuals, their families and the community as a whole. We acknowledge that the misuse of these psychoactive substances is a major health and safety hazard. Infosys is therefore committed to creating an alcohol and drug-free environment at the work place. This would be achieved through the involvement of all employees and the Joint Departmental Councils in spearheading appropriate initiatives. The initiatives would include; * Raising awareness, through the dissemination of information, education and training and by promoting healthy life styles among our employees and their families. * Motivating those employees who have an alcohol/drug problem, to seek assistance, while maintaining confidentiality about such cases. <br />GROWTH OF INFOSYS:<br />One element of Infosys’ operational excellence is its Global Delivery Model, based on doing work where it adds most value – that is, utilizing the best global resources with the lowest associated cost and at the highest possible quality. Reliable telecom infrastructure and India’s low-cost skilled manpower allowed most of the work to be conducted offshore. Onsite aspects of the project are limited to those aspects requiring market proximity and customer interaction. The resulting ratio of 30:70 onshore/offshore provides a strong customer focus, as well as significantly reduced delivery costs. Thus, close to 45,000 Infosys employees are based in India.<br />Customer satisfaction is another key to Infosys’ breakneck rate of profitable growth. Over a 25-year period, the company has successfully completed more than 20,000 projects with a 99.998% error-free record. Over 93% of the projects were delivered on time and on budget, far above the industry average of 30%. Such high customer satisfaction rates have resulted in 95% of clients coming back to Infosys for further projects.<br />Building on such exceptional customer satisfaction, Infosys proactively seeks to expand the scope of the work it does with existing clients, further fueling revenue growth. Infosys fully understands that in the business of outsourced services, lower cost alone is not sufficient. Quality, reliability, speed and customer orientation are fully part of the equation.<br />Infosys’ concern to provide its customers with a competitive advantage led to the creation, in 2001, of the Corporate R&D unit SETLabs (Software Engineering and Technology Laboratories). This unit develops methodologies, frameworks and tools to drive efficiency in project execution and delivery. SETLabs help clients <br />with development projects, addressing specific technology or business problems, while also looking into radical innovations and long-term strategic issues supporting business process innovation for the customers. By mid 2007, SET Labs had grown to 500 consultants and software engineers, filing numerous patent applications.<br />Concerning staff training, Infosys massively invests in technical and management education. Young staff joining the firm typically follows a four month course. This is carried out in Infosys’ training center in Mysore, West of Bangalore, where 6 000 employees can be trained simultaneously. This contributes to Infosys having a staff much lower staff turnover than is typical in the industry.<br />Today, Infosys’ market capitalization is $30 billion. Revenues have consistently grown at over 50% annually through the past decade. As a result, it took 23 years for Infosys to reach $1 billion in revenues, but only 23 months to reach the $2 billion mark.<br />DEVELOPMENT OF INFOSYS:<br />Developing competencies is usually an internal process that is driven by the behaviors of high-performers, as well as an internal view of what makes these individuals successful. For companies in the service economy, there is another important constituency; "the end-users" of the company's talent - that can be brought into the process.<br />Infosys has rapidly grown into one of the largest IT companies in the world. Headquartered in India, the company serves clients worldwide and needs to improve those clients with qualified, well-trained talent. Infosys also has an excellent reputation within the L&D community, providing its new employees with first-rate educational opportunities. <br />One way to meet challenges in the Flat World is to merge your existing in-house R&D models into one that includes an eco-system of partners.<br />Other challenges facing companies include how to achieve on-time development to meet the opportunity window, a need to achieve operational efficiency (high quality and reduced cost of development and overcoming resource constraints in terms of skill sets and infrastructure.<br />The Infosys R&D labs have undertaken more than 1,000 projects in the past few years and have zero IP infringement lawsuits in the 25 years since Infosys' inception. Our R&D labs can help you stay ahead of the innovation game by helping you to realize the following benefits: <br />Predictability in enhancing your time-to-market <br />Increase your profitability by sustaining innovation and reducing the cost of ownership <br />Increase and sustain your ability to innovate rapidly <br />Innovate to create a unique differentiator for your product <br />Ensure rapid concept-to-systems development to derive the best benefits <br />Predictability in enhancing your product's quality <br />CHANGES IN INFOSYS:<br />Infosys is not amused by reports that it will see changes at the company's helm in the immediate future. In an exclusive chat, CEO S Gopalakrishnan drew a distinction between strategic HR changes and full-blown overhauls, reports CNBC-TV18’s Sunanda Jayaseelan.<br />The winds of change are blowing through the IT industry. Wipro has just re-jigged its top management, and analysts are accepting the possibility that US based cognizant will beat Wipro's revenues in the next couple of quarters.<br />But bellwether Infosys says it is in a comfortable position. It adds that while there may be some changes internally, there will be no changes like the one Wipro has made. It also says it has a strong plan in place.<br />However, Infosys is making some changes in its HR policies. Under a programme called Talent Strategy 2015, it is reviewing its talent retention plans, and aims to rein in attrition from the current 17.5% to a more manageable 10%.<br />This programme, designed to be implemented over the next 5 years, will take consensus on company policies from the employees.<br />CONCLUSION:<br />The company declared fairly good results for 2009 with a topline and bottom line growth of around 30%. The ROE has been maintained at 30%+ levels and in addition the company continues to hold almost 10000 Crs of cash on its books. The company continues to maintain one of the highest net margins (around 30%) in the industry. In the addition the various asset ratios such as fixed asset turns and working capital turns continue to be maintained at very high levels (in excess of 5). The positives of the company are apparent. The company has very high margins, high returns on capital, has shown extremely high growth rates in the last 10 years and has one of the best managements in the country.<br />The positives of the company as far as the financial parameters are concerned are also the risks faced by the company. Contrary to the media reports, I don’t consider the recession to be a serious issue for the company in the long run. The recession is bound end sooner or later. The company has substantial scale to ride out the recession. Inspite of the huge drops in the IT services market the company has been able to maintain its ROE and other financial ratios. At the same time, the company has now grown into a 4.5 billion dollar company and now competes with the likes of accenture and IBM. Companies like accenture earn net margins in the range of 8-10% (with ROE in excess of 50%). These companies are fairly profitable companies in their own right, however not as obscenely profitable as the Indian vendors such as Infosys. I personally feel, the tier I vendors have a good business model and will be able to do well in the long run. However their margins and profitability should eventually converge to the same levels as their foreign counterparts as they really don’t have any special competitive advantage over their foreign competitiors. The above convergence could result in decent topline, but a lower bottom line growth<br />  Management compensation : Management compensation seems to be fair. The CEO and top managers make less than 1% of the net profit. In addition the promoters/ managers have never awarded themselves any stock options till date. The company has always exceeded their guidance (although they under commit everytime). The company has performed quite well for the last 10+ years and have managed the growth fairly well.<br />Infosys is now a mature, well run company with above average growth. It has a shareholder friendly and competent management. The company should provide decent returns in the long run, but one should not expect very high returns.<br />