Infosys

Infosys, Indias second-largest IT company, is on a major decentralisation drive that will give
greater autonomy to its key business verticals, making them more agile and accountable.

Internal streamlining will see vertical heads playing the role of a CEO with more control over
their daily financial operations. Infosys has four main verticals that manage manufacturing,
banking, insurance and financial services (BFSI), retail and life sciences, energy, utilities,
communications and services.

According to sources FE spoke to, the changes will give more flexibility to the verticals with
the business heads having better operational freedom. The Bangalore-headquartered firm will
start implementing the changes from April 1.

According to multiple sources, different departments have been given some level of
operational freedom in the recent past, especially in areas such as budget allocations, salary
hikes and promotions. Typically, the corporate planning division manages budgets and other
allocations to different business units. The variable salary component and promotion slots are
also decided at the corporate level and the units adhere to the same.

In response to an email query, Infosys spokesperson said, We do not comment on rumours

and speculation.

Sources point out that the business units will now be able to decide on the variable pay
component and promotions within their team. Line managers have already communicated the
upcoming changes in structure to their team members in an informal manner. Essentially, the
corporate planning team would still set the overall targets, but units will now have the
freedom to decide on the road map to achieve it.

According Infosys sources, the move may also be a response to units attributing under-
performance or inability to meet targets to non-availability of budgets, uncompromising stand
on margins and slow decision making. Experts point out that the decentralisation model
would enable business heads to make quick decisions and accelerate the companys growth
engines.

The current multi-layered structure in Infosys is slowing the decision-making process leading
to losing out on contracts to increasing competition.

With these changes, verticals can now have the complete freedom on deciding project
margins, which was earlier limited to certain projects.

Traditionally Infosys, which prefers not to sacrifice margins to gain higher volumes, has
enjoyed better operating margins compared with other top-tier Indian IT vendors.

But over the last few years, close competitor TCS has consistently managed to deliver better
margin performance, narrowing the gap with Infosys. In Q2, TCS had overtaken Infosys on
the operating margin front.During the October-December stretch TCS widened its lead,
outpacing Infosys for the second time in a row.
Meeting with Infosys management indicated that the firm is undergoing a major cultural shift
with significant changes in its go-to-market strategy, HR policies, business planning
procedures among others. On balance, this implies a pick-up in revenue trajectory at expense
of some margins at least in the immediate term. This should decidedly reverse the perception
that Infosys is losing market share, said CLSA, a brokerage house.

The over $7-billion software services company has seen a management transformation over
the last two years, including a reshuffle of its top executives.

Infosys in January announced leadership role changes for two of its top officials Nandita
Gurjar and Srikantan Moorthy. Gurjar stepped aside as head of human resources to oversee
the companys education and research department. Moorthy took on her portfolio.

In February last year, the Bangalore-based firm announced role changes for BG Srinivas and
Ashok Vemuri. Srinivas moved from the manufacturing and engineering business to head the
companys financial services and insurance vertical, while Vemuri took on Srinivas portfolio.

Last year, the then chief financial officer V Balakrishnan stepped down from his role to
shoulder responsibilities in crucial product platforms, BPO and India business space.

Rajiv Bansal, vice-president (finance), took over as the new CFO from November.

Recently the combined entity of Tech Mahindra and Mahindra Satyam announced plans of
forming a team of 30-40 mini CEOs who will head various verticals across the world. The
Mumbai-based software exporter said the new heads will be responsible for their verticals
and geographies and will manage their own profit and loss (P&L) account.

Igate
BANGALORE: iGateBSE 0.00 % will move away from the personality-led leadership style
of former chief executive Phaneesh Murthy and give its unit heads more power, the Nasdaq-
listed information technology firm's new boss Ashok Vemuri told analysts at a technology
meet.

At the meet, organised by brokerage Wells Fargo, Vemuri told analysts that he will work to
bring in more decentralisation and verticalisation. The new structure will create a multitude
of smaller industry-focused business units with independent profit and loss responsibilities.

In August, Vemuri, then Infosys head of North Americas and a frontrunner to succeed SD
Shibulal as CEO, resigned to take over the top job at iGate after Murthy was sacked over an
undisclosed relationship with a subordinate.

The company is also looking at paying off debt worth about $150 million ( 935 crore) to $200
million ( 1,250 crore) from the about $770 million ( 4,800 crore) worth of bonds coming up
for call in May.

The company racked up the huge debt for acquiring Patni Computer Systems, which was
more than double its size, in 2011. Vemuri said iGate would never make such a huge
acquisition again. The firm expects to refinance the rest of the debt at a cheaper rate of 6%,
CFO Sujit Sircar said.

Vemuri also said there was need to move beyond iTops, the brand for the outcome-based
strategy that its former CEO publicised as the company's unique proposition to clients. The
company will assess in which areas it needs to acquire after moving to the new industry
verticals-based structure based on the gaps it finds

While it will invest selectively in opportunities such as healthcare and life sciences it will exit
those where it doesn't have the resources to build scale."Either investments have been
misdirected or are not relevant-we have to get a little more shaper and focussed and take
essentially a VC type attitude and kill those that are not working," Vemuri said at the event.

It will also exit Latin America, South Africa and Dubai, and focus on expanding in key
geographies such as the United States, Canada and Western Europe, where it has already
announced plans to set up delivery centres or expand its existing facilities.

Also on Vemuri's list of priorities are revving up recruitment and bring employee utilisation
from the existing 84% to around 75%. iGate will invest in mobility and analytics, two
evolving areas of the future but stay away from social and cloud, where it feels it does not

Hitachi
Tokyo, February 4, 2015 - Hitachi, Ltd. (TSE:6501, Hitachi) today announced that it will
appoint Chief Executives, who will function as representatives of the Hitachi Group in
interactions with regional companies and customers, in four global regions - the Americas,
China, Asia / Pacific, and Europe / Russia / Middle East and other areas (EMEACIS).
This change is being made to accelerate Hitachi's growth in the global market and will take
effect on April 1, 2015. In addition to creating regional growth strategies, promoting
localization, and effectively utilizing management resources, the Chief Executives will have
authority to make investments in new business areas where growth is expected and will be
accountable for achieving positive returns on these investments. The Chief Executives will
implement a transition to an autonomous decentralized global management structure in
which each region leads its business autonomously. Hitachi will expand its Social Innovation
Business on a global scale, in order to reach the goals set forth in its 2015 Mid-term
Management Plan, which will enter its final year in FY2015, and to achieve further growth in
2016 and beyond.

In its 2015 Mid-term Management Plan, a three-year management plan that concludes at the
end of FY2015, Hitachi set a goal of achieving an overseas sales ratio of more than 50%,
while expanding business in the global market for the Social Innovation Business. In its
global plan for regional management, the company created regional strategies for India in
December 2012 and for China in June 2014. In addition, it has been rolling out new business
strategies by combining the resources of the entire Hitachi Group as outlined in the plan. In
April 2014, Hitachi appointed a Global CEO in London, U.K. to supervise global strategies
for its Rail Systems Business, and it created structures to enable rapid decision-making close
to its customers. Hitachi has also been promoting aggressive sales activities targeting railway
projects currently being planned in each region.

In order to resolve a variety of global issues that are becoming increasingly complex and
borderless, the Chief Executives will need to act as control towers, developing and building
solutions to issues along with Hitachi customers through collaborative creation. In addition
to the global strategies that have been implemented up to now, Hitachi will strengthen the
autonomous decentralized global management structure in which regional management is
conducted autonomously. In each region, the Chief Executive will have authority to make
investments in the Social Innovation Business, where growth is expected, and will be
responsible for recovering those investments and for regional profits and losses.

In the Americas where economic growth is expected, Mr. Jack Domme, currently CEO of
Hitachi Data Systems Corporation, will be appointed Chief Executive for the Americas. Mr.
Domme will leverage his expertise to roll out new solutions using big data analytics in a
variety of industries, including energy, communications, finance, and healthcare. He will
anticipate technology trends in the United States, where cutting edge technologies,
particularly those related to Big Data, are emerging - with a particular focus on Silicon Valley
- and will build effective business models to further expand Hitachi's business throughout the
Americas.

In China, where stable, sustainable growth is expected, Mr. Kenichi Kokubo will continue as
Chief Executive for China. Mr. Kokubo will execute strategies in keeping with the goals of
achieving a low-carbon society and expanding internal demand in preparation for the new
urbanization currently being promoted by the Chinese government. Specifically, he will
strengthen the building facility management solutions business, including security and energy
management, using the elevator business, where Hitachi holds top class market share in
China, as the base. He will also strive to expand business by promoting financial solutions
using the ATM business as a base and by promoting solutions targeting the healthcare
industry, where Hitachi hopes to provide services throughout the entire care cycle, from
prevention to screening, treatment, and prognosis.

In the Asia-Pacific region, where social infrastructure-related demand is very strong, Mr.
Ichiro Iino will be appointed Chief Executive for the Asia-Pacific. Mr. Iino will promote
solutions targeting the healthcare industry through collaborations with local partners in
Singapore, India, and other countries in that region, and he will promote new financial
solutions targeting Japanese banks that are expanding operations in Asia.

In Europe / Russia / Middle East and other areas (EMEACIS), which is expected to see
demand for upgrades in social infrastructures and market expansion in the healthcare field,
Mr. Klaus Dieter Rennert will continue to serve as Chief Executive for EMEACIS. Mr.
Rennert will roll out the solutions business aimed at increasing efficiency in production and
supply chains, based on activities surrounding Industrie4.0 (the fourth Industrial
Revolution in Germany). He will expand business by applying Hitachi's concept of
symbiotic autonomous decentralization, which aims to improve the quality of people's lives
by linking individual systems such as energy and healthcare and striving to achieve overall
optimization.

In these four regions - the Americas, China, Asia/Pacific, and Europe / Russia / Middle East
and other areas (EMEACIS) - the Chief Executives will act as control towers, securing
key accounts and providing services and solutions that leverage the strengths of the Hitachi
Group. They will implement Hitachi's strategy of autonomous decentralized global
management, which puts responsibility for regional business operations more solidly in the
hands of each individual region.

At the same time, Hitachi will promote uniform global operations to enable the efficient use
of management resources, in areas such as R&D, procurement, brand strategies, the use of
human resources, accounting systems, and thorough compliance. In this way, the Hitachi
Group will provide innovations at the highest level, and establish governance as a global
company.

Following is an outline of the Social Innovation Business fields in each region where growth
is expected, and where the Chief Executives will have authority to make investments as well
as responsibility for overall profits and losses.