In spite of setbacks in the IT services industry due to weak global economies, Infosys, one of India’s largest IT companies, has not only been successful, but it has been growing much faster than most other companies in the same space, including veterans like Accenture. Just in 2011 the company added 17,000 employees to its global workforce, that is 14 percent increase from 2010 – clearly, Infosys is an attractive employer with a strong brand name and solid reputation.
I’ve always been wondering what is the formula behind their success, and how the company manages to attract and keep so many talented engineers. Not surprisingly, when I had an opportunity to visit the company’s headquarters in Bangalore and find out first-hand, I jumped on it.
Success in IT business is determined by access to skilled engineers, ability to deliver high quality IT services on time and within budget, long-term relationships with global hardware and software partners, and, most importantly, managing costs effectively. I think that Infosys global strategy is based on operational excellency – two thirds of Infosys revenues are derived from the North American market where they excel in strategic IT and professional consulting services leveraging a cost efficient Global Delivery Model. Informal personal interviews suggest that the company can buy engineering talent at about 25-30 cents on a dollar compared to what competition can do in other geographies. Infosys is particularly successful in a few verticals – financial services, manufacturing (high tech), telecom, and retail industries. 98 percent of repeat business is a strong indicator of the core strategy being successful, positioning Infosys ahead of its closest rivals.
As software services account for 95 percent of the company’s revenues, Infosys’s main assets are still its people – very talented engineers capable to deliver complex IT solutions across different platforms, verticals, and geographies. There are multiple ways of how Infosys puts its people first – selective hiring, extensive training, health management, food and exercise facilities, as well as socialization opportunities through sports and social clubs. Organizational and community links further help employees’ embeddedness in the work place. This is in line with A. Ramesh’s research findings where he points out that in India organizational fit and links, along with community links are the top three factors to be taken into consideration in regards to employee turnover.
The company has strong systems in place to ensure alignment with the human resources strategy. From selecting the right people and being clear on key desired attributes to extensive training program once new employees have been hired to performance appraisals and utilization process. For example, a clear career growth path defined by the systems where employees are evaluated and promoted according to objective criteria – technology, leadership, domain, managerial and software competencies ensure that there is no guess work about career advancement. Rooted in “consolidated relative rank” methodology, CRR method compares employees with each other, thus identifying top performers for promotion.
Infosys takes its values of delivering customer delight, leadership by example, integrity and transparency very seriously and successfully translates them into operational processes and measurement frameworks. According to S.D. Shibulal, the company’s CEO, the company’s forward looking strategy is to strengthen partnerships with clients, and to align tighter in front of the clients. It is also to be more global and evolve their business model further creating “non-linearity between effort and the venue.”
There is no doubt that Infosys is successful in developing strong links between people, systems and culture, and if there is one key takeaway from their global success, that would be it – ICT companies should be developing a clear strategy and sticking to it, and yes – people are always first.