ORGANIZATIONAL STUDY

ORGANIZATIONAL STUDY
Infosys Technologies Pvt. Limited
Submitted by Anil Pakki
POST GRADUATION DIPLOMA IN MANAGEMENT

Anil Pakki
anilpakki7@outook.com
 CHAPTER - 1
Introduction
IT/ ITES Sector

About IT/ ITES Sector - The global sourcing market in India continues to grow at a higher pace compared

to the IT-BPM industry. India is the leading sourcing destination across the world, accounting for

approximately 55 per cent market share of the US$ 185-190 billion global services sourcing business in

2017-18. Indian IT & ITeS companies have set up over 1,000 global delivery centers in about 80 countries

across the world. India has become the digital capabilities hub of the world with around 75 per cent of global

digital talent present in the country.

Market Size
India’s IT & ITeS industry grew to US$ 167 billion in 2017-18. Exports from the industry increased to US$

126 billion in FY18 while domestic revenues (including hardware) advanced to US$ 41 billion. Spending on

Information Technology in India is expected to grow over 9 per cent to reach US$ 87.1 billion in 2018.

Revenue from digital segment is expected to comprise 38 per cent of the forecasted US$ 350 billion

industry revenue by 2025.

Investments/ Developments
Indian IT's core competencies and strengths have attracted significant investments from major countries.

The computer software and hardware sector in India attracted cumulative Foreign Direct Investment (FDI)

inflows worth US$ 32.23 billion between April 2000 to June 2018, according to data released by the

Department of Industrial Policy and Promotion (DIPP).

Leading Indian IT firms like Infosys, Wipro, TCS and Tech Mahindra, are diversifying their offerings and

showcasing leading ideas in blockchain, artificial intelligence to clients using innovation hubs, research and

development centres, in order to create differentiated offerings.

Some of the major developments in the Indian IT and ITeS sector are as follows:

• Nasscom has launched an online platform which is aimed at up-skilling over 2 million technology

professionals and skilling another 2 million potential employees and students.

• Revenue growth in the BFSI vertical stood at 10.3 per cent y-o-y in the first quarter of 2018-19.

• As of March 2018, there were over 1,140 GICs operating out of India.

• Private Equity (PE)/Venture Capital (VC) investments in India's IT & ITeS sector reached US$ 7.6

billion during April-December 2017.

Government Initiatives
Some of the major initiatives taken by the government to promote IT and ITeS sector in India are as

follows:

• The government has identified Information Technology as one of 12 champion service sectors for

which an action plan is being developed. Also, the government has set up a Rs 5,000 crore (US$

745.82 million) fund for realising the potential of these champion service sectors.

• As a part of Union Budget 2018-19, NITI Aayog is going to set up a national level programme that will

enable efforts in AI and will help in leveraging AI technology for development works in the country.

Achievements
Following are the achievements of the government during 2017-18:

• About 200 Indian IT firms are present in around 80 countries.

• IT exports from India are expected to reach highest ever mark of US$ 126 billion in 2017-18.

• Highest ever revenue was generated by Indian IT firms at US$ 167 billion in 2017-18.

Road Ahead

India is the topmost offshoring destination for IT companies across the world. Having proven its

capabilities in delivering both on-shore and off-shore services to global clients, emerging technologies

now offer an entire new gamut of opportunities for top IT firms in India. Export revenue of the industry is

expected to grow 7-9 per cent year-on-year to US$ 135-137 billion in FY19. The industry is expected to

grow to US$ 350 billion by 2025 and BPM is expected to account for US$ 50-55 billion out of the total

revenue
 CHAPTER - 2

2. 1 Importance of the Study

An Organization is a social arrangement that pursues collective goals, which controls its own

performance, and which has a boundary separating it from its environment. Organization is the

association formed by a group of people who see that there are benefits available from working

together towards common goal. Organizational study refers to the study of organization as a whole and

getting adequate knowledge with various departments in the organization. I have done my

organizational study in Vivanta by Taj hotel. As being a fresher this study is definitely

going to help me in different aspects. This will also help me in the internship because now I have a

clear idea about the organization.

Basically this study helps students to get a practical experience than the theory. Because of this study

students already have knowledge about the organization. It also enhances the skills of decision

making, practical situation, and better knowledge about management. It provides a road map to our

lives in an organization. It helps an individual to understand him/herself and others better.

It can also help us in following ways:

o By studying organizational behavior, both employees and managers come to understand what makes

people behave the way they do.

o Employees can use this knowledge to increase their own job satisfaction and improve work

performance.

o Managers can use organizational behavior to accomplish goals and help employees achieve optimal

performance. More importantly, learning about organizational behavior will help you to understand your

own behaviors, attitudes, ethical views, and performance, as well as those of the people with whom

you'll be working. This type of knowledge will assist you in working effectively with managers,

colleagues, and subordinates.

o It builds better relationship by achieving people, organizational, and social objectives. It covers a wide

array of human resource like behavior, training and development, change management, leadership,

teams etc.

2.2 Company Profile

History of Infosys Technologies Ltd.

Infosys Technologies Ltd. is a software development company with headquarters in Electronics City,

Bangalore, India, an area known as 'India's Silicon Valley' for its concentration of high-tech multinational

and Indian companies. Cofounded by Chairman and CEO N.R. Narayana Murthy, Infosys Technologies

has accomplished a number of firsts for an Indian company, including becoming the first to be listed on an

American stock exchange and the first to offer an employee stock option plan (ESOP). About 500

employees have become millionaires as a result of the company's ESOP. In 2000 the firm's international

client base included 200 American firms, for which Infosys Technologies provided software for enterprise

resource planning (ERP), Y2K compliance, electronic commerce, and other applications.
 Chronology

Key Dates:

• 1981: Infosys Technologies Ltd. is founded in Bangalore, India, by N.R. Narayana

Murthy and seven other software engineers.

• 1987: Infosys opens its first U.S. office.

• 1992: Infosys becomes a public limited company in India.

• 1993: Company issues stock through public offerings on three stock exchanges in India.

• 1999: Infosys becomes the first India-based public company to be listed on an American
stock exchange, the NASDAQ

Additional Details

• Incorporated: 1981

• Employees: 2,25,501

• Sales: US$203.44 million (2000)

• Stock Exchanges: NASDAQ Bangalore Mumbai National

• Ticker Symbol: INFY

• NAIC: 541511 Custom Computer Programming Services; 541512

 2.3 Aim and Objective of Infosys

Infosys' Aim

“To be a globally respected corporation that provides best-of-breed business solutions, leveraging

technology, delivered by best-in-class people.”

Infosys does not just want to be a corporation which just focuses on increasing its business and

revenue, rather its vision is to be a corporation which provides best business solution by indulging

best talented people and eventually to become a reputed and respected corporation.

Infosys' Objective

"To achieve our objectives in an environment of fairness, honesty, and courtesy towards our clients,

employees, vendors and society at large."

Global Footprint and Offered Services

Infosys has made his footprint globally with offices and development centers across the world. It

has expanded its business globally by operating in 28 countries which covers Europe, America,

Middle East, Africa, and APAC (Asia – Pacific and China).

 Infosys offers various services to sustain in the competitive environment and to enhance their

growth.

Services offered:

Infosys follows a blended offering of onsite high-quality business consulting and offsite impeccable

technology implementation. This eventually reduces the cost of taking the entire team of business

consultants to a client site. In the application services, they offer application development,

maintenance and modernization. They focus on delivering high quality, flexible applications that are

easy to maintain. To deliver a world class process outsourcing, Infosys’ BPO services combine

technology, process skills and domain expertise.

➢ Business and Technology consulting

➢ Application services
➢ Systems integration services
➢ Product engineering services
➢ Custom software development services
➢ Maintenance services
➢ Re-engineering services
➢ Independent testing and validation services
➢ IT infrastructure services
➢ Business Process Outsourcing services

In terms of industry segment, Infosys offers services to many industries which includes

➢ Aerospace and defense

➢ Airlines
➢ Automotive
➢ Banking, insurance and capital markets
➢ Communication
➢ Manufacturing and technology
➢ Logistics
➢ Education
➢ Healthcare
 2.4 Life Cycle

The Infosys Communications, Media and Entertainment practice offers Product Lifecycle

Management (PLM) solutions to boost operational efficiency and rationalize development costs for

bundled products. We connect the Business Support System (BSS) and provisioning layers, and

create web interfaces between enterprise catalog and sales / order management systems to enable

runtime order validation and enrichment. Significantly, online retrieval of catalog information supports

configuration, pricing and quoting functionalities, as well as omnichannel sales.

We combine a catalog-driven fulfillment approach and SOA-based service integration with

predefined structures and components of TM Forum Frameworks to define PLM processes, catalog

services, and boundaries / functionalities. We create product modeling frameworks for active catalog

solutions and synchronize product data across diverse applications.

Infosys preloads fulfillment logic in active catalog solutions, which enables customized product

bundling. We streamline provisioning, service activation, communication management, and product

and service inventory management. Our tools for specification management and abstraction of

products, services and resources include commercial, functional, technical, physical, and virtual

dimensions of products. Significantly, our componentized data models facilitate reuse of product and

service data across the product lifecycle

Tools for visibility into network elements, assets and products support order

provisioning flow as well as product portfolio management as bellows

 2.5 Industry Profile

The Information Technology industry has gained a brand image as knowledge economy due to its

development from software exporter to providing IT services to IT enabled services (BPO segment).

The sector has been consistently contributing to India’s GDP from 1.2% in the FY 1998 to 7.5% in the

FY 2012. According to NASSCOM, the IT – BPO sector in India has aggregated revenues of US $100

billion in FY 2012, where export comprises of US $ 69.1 billion and US $ 31.7 billion respectively

growing by over 9 %. The cities that account nearly 90% of this sectors export are Bangalore,

Chennai, Hyderabad, Delhi, Mumbai and Kolkata. IT industry has registered a notable growth because

of the rich and varied expansion into verticals, well –differentiated service offerings and Increasing growth

penetration. The phenomenal success of this industry is attributable to f avorable government

policies, rich and burgeoning demand conditions, healthy growth of the related industries and competitive

environment prevalent in the industry. The interplay of these forces has put the industry on the global

map.
 Industry Segmentation

IT industry can be broadly

classified into three sectors:

• Software

• IT Services

• IT enabled Services (ITeS)-

BPO

[
Growth of the Industry

The Indian IT industry h a s been growing at a rapid pace by offering a wide range of

products and services. It is moving slowly and steadily from the exports of lower end

services to providing higher end services.

1. IT Software

Growth of Software Sector

 Software: Share of Exports and Domestic Sales

2. IT Services:

India is an expert in providing customized IT services to the clients. These services have

always dominated the Indian IT i n d u s t r y . It was accounting for more than 60% in the

overall r e v e n u e of the industry. The segment is growing at 26% compounded annual

growth rate since FY 2000.

The IT services segment is divided into the following categories

▪ Project – oriented services

▪ IT outsourcing and

▪ Training and support services

 Growth of IT Service Segment

Growth of IT Service Segment – Domestic sales and Exports

 Share of Exports of IT Services

3. IT Enabled Services - BPO Sector:

The reforms made in the early 1990s, the IT industry is moving up the value chain by

offering higher end services from lower end services.

Growth of IT Enabled Service Sector

 IT Value Chain

Infosys Ltd is a company which was started in the year 1981 by seven people with the investment of US

$ 250. It is the second largest software exporter company to be listed on NASDAQ 100 index in the

year 1992. Successively f or the years 2001, 2002 and 2003, the company won the National award

for excellence in corporate governance conferred by the Government of India. Infosys Ltd. continues

to be a benchmark in the aspect of corporate governance for its highly transparent disclosure

practices. It believes that the success of the company depends on sound governance. It aims to

attain the performance rules with integrity and honesty. For Infosys Ltd., Cor porate Governance is a

reflection of its culture, policies, and the relationship it shares with the shareholders and the commitment

it has to ethical values. It aims to consistently intensify its efforts to enhance long term- shareholder value

and respect minority rights in all the business decisions. The Board exercises its responsibilities

in the widest sense of the term. ICRA has a s s i g n e d CGR1 for the corporate governance practices

followed by Infosys Ltd. CRISIL has also assigned high ratings as CRISIL GVC Level 1. The company

has complied with the requirements of Revised clause 49 of Listing Agreement incorporated by SEBI
Governance Philosophy:

The Corporate Governance philosophy at Infosys Ltd. is based on the following

principles.

1. To follow the Indian law as well as comply with the law of countries where it is
operating in letter and spirit.

2. Maintain high degree of transparency.

3. Management is the trustee of shareholder ‘s capital and it is not the real owner.
4. The functioning of the company has to be explicitly stated in a truthful manner.
5. Design simple corporate structures and make distinction between
personal
conveniences and corporate resources.
 2.6 Products offered by Infosys

Products and services

Infosys provides software development, maintenance and independent validation services to

companies in finance, insurance, manufacturing and other domains. One of its known products

is Finacle which is a universal banking solution with various modules for retail & corporate

banking

Its key products and services are:

• NIA – Next Generation Integrated AI Platform (formerly known as Mana)

• Infosys Consulting – a global management consulting service

• Infosys Information Platform (IIP) – Analytics platform

• EdgeVerve Systems which includes Finacle, a global banking platform

• Panaya Cloud Suite

• Skava
 2.7 Customers of the Organization

Customer-centricity is key to a successful digital initiative. Infosys Organization Change Aligns to

Company's Vision Towards Building Tomorrow's Enterprise. Simplified name and reorganization facilitate

client access to next generation of global consulting and technology services

In line with its vision for Building Tomorrow's Enterprise, Infosys Ltd. (NASDAQ: INFY) recently

completed its reorganization initiative to address the company's transition into the next generation of

global consulting and technology services. This furthers the company's focus to create measurable

business value for clients through a combination of transformation, innovation and operation services.

Infosys also announced it has changed its name to Infosys from Infosys Technologies to more accurately

reflect the company's evolution over the last 30 years from technology services to business-led

consulting and solutions*.

"Organizationally, Infosys has fully integrated its deep industry domain expertise with its award-winning

enterprise solutions and technology services to accelerate decision-making and increase solution

flexibility for our customers," said S.Gopalakrishnan, Chief Executive Officer and Managing Director,

Infosys Limited.

The reorganization consolidated and strengthened the Industry Sector Units to have end-to-end

capability and global responsibility. This new go-to market approach enables the company to spur

revenue growth, innovation and efficiency across the client base, and to address major business trends

such as digital consumer, mobility, sustainability and cloud computing. These teams now have full sales

and delivery capability and complete client ownership across Infosys offerings.

Infosys is now organized into four Industry Sector Units:

• Financial Services & Insurance - Headed by Ashok Vemuri

• Energy, Utilities, Communications & Services - Headed by Prasad Thrikutam

• Manufacturing - Headed by B.G. Srinivas

• Retail, Consumer Packaged Goods, Logistics and Life Sciences - Headed by Pravin Rao

To complement the new business unit structure, Infosys has consolidated its service lines and solutions

into three Service and Innovation Groups:

• Consulting and Systems Integration comprising consulting, enterprise solutions, systems integration

and advanced technologies led by Stephen Pratt

• Business Operations Services comprising application development and maintenance, independent

validation services and infrastructure management led by Chandra Shekar Kakal

• Products, Platforms and Solutions to accelerate intellectual property led innovation. The head for

this offering will be announced soon.

Industry Sector Units will have a practice lead and embedded teams for all of these groups. Each

Service & Innovation Group leader will span across units to ensure the over-arching strategy and

capability for their offerings is kept best-in-class.

Finacle, BPO and Product Engineering continue to operate as before. Infosys Public Services is a new

subsidiary chartered to address US government entities. We have also integrated our healthcare

provider portfolio as part of Infosys Public Services. India as our global headquarters domestic market

will continue to have its own self-contained regional structure.

"The catalyst for this change has been the continued evolution of our capabilities as we continue to

drive the new generation model of global consulting and technology services. The new structure aligns

us to the needs of our clients as we build tomorrow's enterprise" continued S. Gopalakrishnan.

*The company name change to Infosys has been affected at the corporate headquarters in India and

the process of registering the new name has been initiated globally.
 2.8 Departments of Organization

ORGANIZATION CHART

1. INDUSTRY SEGMENTS

Retail CPG and Logistics, Energy Communication, Utilities and Services, Manufacturing and

Resources, Financial Services, Healthcare Insurance and Life Sciences, Infosys Public Services

and Finacle

2. SERVICE LINES

Infosys Consulting, Application Development and Maintenance, Independent Validation Solution,

Data and Analytics, Enterprise Application Package Services, Cloud and Infrastructure

Development, Digital Experience, Engineering Services, Infosys BPO, Edge Verve and Platforms

3. BUSINESS ENABLING FUNCTIONS

Commercial, Corporate Design, Marketing, Strategic Operations (Corporate Strategy & Risk

Management, Mergers & Acquisitions), Data Privacy, Finance, Human Resource Development,

Infosys Leadership Institute, Information Security Group, Legal, Quality

Talent Fulfilment, Education, Training and Assessment, Global Immigration,

Recruitment, Talent Planning and Deployment. Technology Operations

Information Systems, Computers and Communication Divisions

4. VERTICALS
Energy, Communications and Services, Financial Services, Cards and Payments, Healthcare,

Insurance and Life Sciences, Manufacturing, Retail and Logistics

BUSINESS FUNCTIONS OF INFOSYS INDIA.

• Operations Process Design: Infosys helps define new processes and redesign existing

business processes as CSPs launch new IP-based services, leveraging a combination of business

process, IP and telecom expertise Customer service enhancement: The Infosys Scenario-Based

Customer Service solution incorporates a framework for process, technology and organizational
change framework, enabling CSPs to transform the customer service experience. In addition, Infosys

BPO provides robust operational outsourcing.

OSS / BSS enhancement: As CSPs re-architect their systems landscape and redirect

investments to strategic systems and solutions, Infosys provides services and solutions that facilitate

the evolution of these systems.

Our strategic objective is to build a sustainable organization that remains

relevant to the agenda of our clients, while generating profitable growth for our investors. In

order to do this, we will apply the priorities of ‘renew’ and ‘new’ to our own business and cascade it

to everything we do. These translate to the following strategic focus areas : Build expansive, lasting

relationships with our clients by delivering differentiated market offerings: Our strategy is to

engage with clients on their large transformative programs, both in traditional IT areas as well as for

their new digital business initiatives. We expand existing client relationships by providing them with

a broad set of end-to-end service offerings and increase the size, nature and number of projects we

do with them. Our specific industry, domain, process, and technology expertise allows us to

enable clients to transform their businesses with innovative strategies and solutions. Through

our transformation service offering, which we call ‘Aikidō’, we help our clients address key aspects

of their business. Our ‘Ai’ offering, a result of our investments in building intellectual property,

helps clients leverage software- based platforms to dramatically boost productivity and to deliver

next- generation experiences to their customers. Our ‘Ki’ offering captures the know- how of

existing client technology landscapes, which we then leverage for process improvements and

transformation. With our ‘Dō’ offering, which incorporates Design Thinking concepts, we help

clients identify and prioritize their most significant problems and solve them in rapid, iterative and

innovative ways. We offer an end-to-end suite of high-quality, highly-responsive and innovation-led

services spanning business consulting, IT services, software platform-based services and

business process management. This enables us to partner with our clients on large, multi-

year engagements.Through our Zero Distance program, we help our clients innovate and derive

more value from their projects. Zero Distance is the process of everyday innovation at Infosys

whereby all employees are expected to innovate in their individual capacities and through their

individual jobs.
Deliver solutions and services leveraging highly cost-effective models:

Our strategy is to leverage software-based automation and our Global Delivery

Model to deliver solutions and services to our clients in the most cost-effective

manner, while at the same time optimizing our cost structure to remain

competitive. We areembracing intelligence-based automation techniques and software automation

platforms to boost productivity of our projects.

 CHAPTER - 3

3.1 7’S Framework

7s framework- The Mckinsey 7s framework is a management model developed by well-known business

consultants Robert H. Waterman Jr. And Tom peters of McKinsey & Company consulting firm. This model

is often used as an organizational study tool to assess and monitor changes in the internal situation of an

organization. Whatever the type of change – restructuring, new processes, organizational merger, new

systems, change of leadership, and so on – the model can be used to understand how the organizational

elements are interrelated, and so ensure that the wider impact of changes made in one area over other

areas is taken into consideration.

• 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 Seven Interdependent Elements

1. Strategy - purpose of the business and the way the organization seeks to enhance its

competitive

advantage.

2. Structure - the way the organization is structured and who reports to whom.

3. Systems - the daily activities and procedures that staff members engage in to get the job done.
 4. Shared Values- called "superordinate goals" when the model was first developed, these are
the
core values of the company that are evidenced in the corporate culture and the general work
ethic.
5. Skills - The organization's core competencies and distinctive capabilities.

6. Staff - Organization's human resources, demographic, educational and attitudinal

characteristics.

7. Style - Typical behavior patterns of key groups, such as managers, and other professionals

Infosys' Adoption of McKinsey 7s

1. Strategies Client-Focused Strategy to Achieve Growth ◦ Focuses on Limited number of large

organizations ◦ Commands Premium Margins Favours Expansions into new Developing and

Globally-Connected Geographies Develops Deep Industry Knowledge Invests on Brand-

Building Believes in Organic Growth Through Risk Averse Strategy

2. Staff Focuses on Quality of Human Resources 90% of the Workforce are Engineers At the

Entry Level, Infosys Hires Candidates with Superior Academic Record, Technical Skills and

High Learnability Spends 3% of revenue on Up gradation of Empoyee’s skills

3. Skills Focus on continuous Skill Improvement Mandatory Certification for Domain and

Technology Projects at Capability Maturity Model Integration (CMMi) level 5 Knowledge

Management given special focus

4. Style Emphasis on Developing Leadership Qualities Established Infosys Leadership Institute

(ILI) for the same Open Door Policy & Continuous Sharing of Information Inputs from the

Employee in Decision Making

5. Shared Values ( C-LIFE ) Client value: To surpass client expectations consistently Leadership

by example: To set standards in our business and transactions, and be an exemplar for the

industry and ourselves Integrity and transparency: To be ethical, sincere, and open in all our

transactions Fairness: To be objective and transaction-oriented, and thereby earn trust and

respect Excellence: To strive relentlessly, constantly improve ourselves, our teams,

6. Structure Follows: Free Form Organizational Structure Industry Business Unit (IBU) Concept

of Features a large no of Small Business Units o IBU operates Independently

7. Systems Infosys has always been keen on the quality systems. Internal K-Shop portal to share

knowledge and latest technologies is one of the biggest advantages for Infosys. Infosys has

recently developed a performance portal to bring the transparency and the evaluation criteria

visible to manage the large no. of human resources.

 3.2 SWOT Analysis

Strengths

• This company is based in India and its competitive advantage is increased.

• The Indian economy has lo labor cost although its economic indicators are quite weak as

increasing rate of inflation.

• The workforce is high skilled in Information Technology.

• Infosys is in a strong financial position as its business turned over more than $4 billion in

2008. This strong financial position shows that its capital is expanding, and it provides the base

to leverage the potential investors.

• The company has 44 global development centers in which most of them are located in India.

This company has offices in many developed and developing nations. This means that Infosys

is becoming a global brand and it has capability to support global operations, which it carries

out for its multinational clients.

Weaknesses

• Infosys struggles in the US markets on different occasions, and has particular problems in

securing United States Federal Government contracts in North America. As these contracts are

very profitable and they can be continued for long periods of time, Infosys is losing its strength

in lucrative business.

• This company is considered the big IT Company if it is compared to its Indian competitors, but

Infosys is much smaller than its global competitors.

Opportunities

• Poised to benefit from the acquisition of Lodestone Holding

• The company needs to fulfill increasing demand for cloud computing services.

• They should give positive outlook for enterprise mobility market.

• The company can get the benefit of big data about IT technology.

Threats

• The company has to face intense competition in the local markets as various local players

provide their services at cheap rates.

• Employee attrition may increase personnel costs of the company.

• Another great threat is instability of economic environment. The company can face pressure

for conducting business because of pricing and low employee utilization.

3.3 Porter 5 Force Model

A model was put forward by Michael. E. Porter in an article in the Harvard Business

Review in 1979. This model, known as Porter's Five Forces Model is a strategic

management tool that helps determine the competitive landscape of an industry. Each of

the five forces mentioned in the model and their strengths help strategic planners

understand the inherent profit potential within an industry. The strengths of these forces

vary across the industry to industry, which means that every industry is different regarding

the profitability and attractiveness. The structure of an industry, even though it is stable,

can change over time. These Porter’s five forces are as follows:
• Threat of New Entrants

• Bargaining Power of Suppliers

• Bargaining Power of Buyers

• Threat of Substitute Products or Services

• Rivalry Among Existing Firms

The Porter’s Five Forces model can be used to analyse the industry in which Infosys

Limited operates, in terms of attractiveness through inherent profit potential. The

information analysed using the model can be used by strategic planners for Infosys Limited

to make strategic decisions.

Infosys Limited Porter’s Five Forces Analysis

This section analyses Infosys Limited using each of the five forces of Porter’s model.

Threat of New Entrants

• The economies of scale is fairly difficult to achieve in the industry in which Infosys Limited

operates. This makes it easier for those producing large capacitates to have a cost advantage.

It also makes production costlier for new entrants. This makes the threats of new entrants a

weaker force.

• The product differentiation is strong within the industry, where firms in the industry sell

differentiated products rather a standardised product. Customers also look for differentiated

products. There is a strong emphasis on advertising and customer services as well. All of these

factors make the threat of new entrants a weak force within this industry.

• The capital requirements within the industry are high, therefore, making it difficult for new

entrants to set up businesses as high expenditures need to be incurred. Capital expenditure is

 also high because of high Research and Development costs. All of these factors make the

threat of new entrants a weaker force within this industry.

• The access to distribution networks is easy for new entrants, which can easily set up their

distribution channels and come into the business. With only a few retail outlets selling the

product type, it is easy for any new entrant to get its product on the shelves. All of these factors

make the threat of new entrants a strong force within this industry.

• The government policies within the industry require strict licensing and legal requirements to be

fulfilled before a company can start selling. This makes it difficult for new entrants to join the

industry, therefore, making the threat of new entrants a weak force.

How Infosys Limited can tackle the Threat of New Entrants?

• Infosys Limited can take advantage of the economies of scale it has within the industry, fighting

off new entrants through its cost advantage.

• Infosys Limited can focus on innovation to differentiate its products from that of new entrants. It

can spend on marketing to build strong brand identification. This will help it retain its customers

rather than losing them to new entrants.

Bargaining Power of Suppliers

• The number of suppliers in the industry in which Infosys Limited operates is a lot compared to

the buyers. This means that the suppliers have less control over prices and this makes the

bargaining power of suppliers a weak force.

• The product that these suppliers provide are fairly standardised, less differentiated and have

low switching costs. This makes it easier for buyers like Infosys Limited to switch suppliers.

This makes the bargaining power of suppliers a weaker force.

• The suppliers do not contend with other products within this industry. This means that there are

no other substitutes for the product other than the ones that the suppliers provide. This makes

the bargaining power of suppliers a stronger force within the industry.

• The suppliers do not provide a credible threat for forward integration into the industry in which

Infosys Limited operates. This makes the bargaining power of suppliers a weaker force within

the industry.

• The industry in which Infosys Limited operates is an important customer for its suppliers. This

means that the industry’s profits are closely tied to that of the suppliers. These suppliers,

therefore, have to provide reasonable pricing. This makes the bargaining power of suppliers a

weaker force within the industry.

How Infosys Limited can tackle the Bargaining Power of Suppliers?

• Infosys Limited can purchase raw materials from its suppliers at a low cost. If the costs or

products are not suitable for Infosys Limited, it can then switch its suppliers because switching

costs are low.

• It can have multiple suppliers within its supply chain. For example, Infosys Limited can have

different suppliers for its different geographic locations. This way it can ensure efficiency within

its supply chain.

• As the industry is an important customer for its suppliers, Infosys Limited can benefit from

developing close relationships with its suppliers where both of them benefit.

Bargaining Power of Buyers

• The number of suppliers in the industry in which Infosys Limited operates is a lot more than the

number of firms producing the products. This means that the buyers have a few firms to

choose from, and therefore, do not have much control over prices. This makes the bargaining

power of buyers a weaker force within the industry.

• The product differentiation within the industry is high, which means that the buyers are not able

to find alternative firms producing a particular product. This difficulty in switching makes the

bargaining power of buyers a weaker force within the industry.

• The income of the buyers within the industry is low. This means that there is pressure to

purchase at low prices, making the buyers more price sensitive. This makes the buying power

of buyers a weaker force within the industry.

• The quality of the products is important to the buyers, and these buyers make frequent

purchases. This means that the buyers in the industry are less price sensitive. This makes the

bargaining power of buyers a weaker force within the industry.

• There is no significant threat to the buyers to integrate backwards. This makes the bargaining

threat of buyers a weaker force within the industry.

How Infosys Limited can tackle the Bargaining Power of Buyers?

• Infosys Limited can focus on innovation and differentiation to attract more buyers. Product

differentiation and quality of products are important to buyers within the industry, and Infosys

Limited can attract a large number of customers by focusing on these.

• Infosys Limited needs to build a large customer base, as the bargaining power of buyers is

weak. It can do this through marketing efforts aimed at building brand loyalty.

• Infosys Limited can take advantage of its economies of scale to develop a cost advantage and

sell at low prices to the low-income buyers of the industry. This way it will be able to attract a

large number of buyers.

Threat of Substitute Products or Services

• There are very few substitutes available for the products that are produced in the industry in

which Infosys Limited operates. The very few substitutes that are available are also produced

by low profit earning industries. This means that there is no ceiling on the maximum profit that
 firms can earn in the industry in which Infosys Limited operates. All of these factors make the

threat of substitute products a weaker force within the industry.

• The very few substitutes available are of high quality but are way more expensive.

Comparatively, firms producing within the industry in which Infosys Limited operates sell at a

lower price than substitutes, with adequate quality. This means that buyers are less likely to

switch to substitute products. This means that the threat of substitute products is weak within

the industry.

How Infosys Limited can tackle the Threat of Substitute Products?

• Infosys Limited can focus on providing greater quality in its products. As a result, buyers would

choose its products, which provide greater quality at a lower price as compared to substitute

products that provide greater quality but at a higher price.

• Infosys Limited can focus on differentiating its products. This will ensure that buyers see its

products as unique and do not shift easily to substitute products that do not provide these

unique benefits. It can provide such unique benefits to its customers by better understanding

their needs through market research, and providing what the customer wants.

Rivalry Among Existing Firms

• The number of competitors in the industry in which Infosys Limited operates are very few. Most

of these are also large in size. This means that firms in the industry will not make moves

without being unnoticed. This makes the rivalry among existing firms a weaker force within the

industry.

• The very few competitors have a large market share. This means that these will engage in

competitive actions to gain position and become market leaders. This makes the rivalry among

existing firms a stronger force within the industry.

• The industry in which Infosys Limited is growing every year and is expected to continue to do

this for a few years ahead. A positive Industry growth means that competitors are less likely to

engage in completive actions because they do not need to capture market share from each

other. This makes the rivalry among existing firms a weaker force within the industry.

• The fixed costs are high within the industry in which Infosys Limited operates. This makes the

companies within the industry to push to full capacity. This also means these companies to

reduce their prices when demand slackens. This makes the rivalry among existing firms a

stronger force within the industry.

• The products produced within the industry in which Infosys Limited operates are highly

differentiated. As a result, it is difficult for competing firms to win the customers of each other

because of each of their products in unique. This makes the rivalry among existing firms a

weaker force within the industry.

• The production of products within the industry requires an increase in capacity by large

increments. This makes the industry prone to disruptions in the supply-demand balance, often

leading to overproduction. Overproduction means that companies have to cut down prices to

ensure that its products sell. This makes the rivalry among existing firms a stronger force within

the industry.

• The exit barriers within the industry are particularly high due to high investment required in

capital and assets to operate. The exit barriers are also high due to government regulations

and restrictions. This makes firms within the industry reluctant to leave the business, and these

continue to produce even at low profits. This makes the rivalry among existing firms a stronger

force within the industry.

• The strategies of the firms within the industry are diverse, which means they are unique to

each other in terms of strategy. This results in them running head-on into each other regarding

strategy. This makes the rivalry among existing firms a strong force within the industry.
 How Infosys Limited can tackle the Rivalry Among Existing Firms?

• Infosys Limited needs to focus on differentiating its products so that the actions of competitors

will have less effect on its customers that seek its unique products.

• As the industry is growing, Infosys Limited can focus on new customers rather than winning the

ones from existing companies.

• Infosys Limited can conduct market research to understand the supply-demand situation within

the industry and prevent overproduction.

Implications of Porter Five Forces on Infosys Limited

By using the information in Infosys Limited five forces analysis, strategic planners will be able

to understand how different factors under each of the five forces affect the profitability of the

industry. A stronger force means lower profitability, and a weaker force means greater

profitability. Based on this a judgement of the industry's profitability can be made and used in

strategic planning.
 3.4 5S Organization

5S is a workplace organization method that uses a list of

five Japanese words: seiri seiton , seisō , seiketsu , and shitsuke . These have been translated

as "Sort", "Set In order", "Shine", "Standardize" and "Sustain". The list describes how to

organize a work space for efficiency and effectiveness by identifying and storing the items

used, maintaining the area and items, and sustaining the new order. The decision-making

process usually comes from a dialogue about standardization, which builds understanding

among employees of how they should do the work.

In some quarters, 5S has become 6S, the sixth element being safety

Other than a specific stand-alone methodology, 5S is frequently viewed as an element of a

broader construct known as visual control, visual workplace, or visual factory. Under those (and

similar) terminologies, Western companies were applying underlying concepts of 5S before

publication, in English, of the formal 5S methodology. For example, a workplace-organization

photo from Tennant Company (a Minneapolis-based manufacturer) quite similar to the one

accompanying this article appeared in a manufacturing-management book in 1986.

 The 5S

There are five 5S phases. They can be translated from the Japanese as "sort", "set in order",

"shine", "standardize", and "sustain". Other translations are possible.

Sort (Seiri)

1S – a red tag area containing items waiting for removal.

Seiri is sorting through all items in a location and removing all unnecessary items from the

location.

Goals:

• Reduce time loss looking for an item by reducing the number of items.

• Reduce the chance of distraction by unnecessary items.

• Simplify inspection.

• Increase the amount of available, useful space.

• Increase safety by eliminating obstacles.

Implementation:
• Check all items in a location and evaluate whether or not their presence at the location is useful

or necessary.

• Remove unnecessary items as soon as possible. Place those that cannot be removed

immediately in a 'red tag area' so that they are easy to remove later on.

• Keep the working floor clear of materials except for those that are in use to production.

Set In Order (Seiton)

2S – simple floor marking.

Seiton is putting all necessary items in the optimal place for fulfilling their function in the

workplace.

Goal:

• Make the workflow smooth and easy.

Implementation:

• Arrange work stations in such a way that all tooling / equipment is in close proximity, in an easy

to reach spot and in a logical order adapted to the work performed. Place components

according to their uses, with the frequently used components being nearest to the workplace.

• Arrange all necessary items so that they can be easily selected for use. Make it easy to find

and pick up necessary items.

• Assign fixed locations for items. Use clear labels, marks or hints so that items are easy to

return to the correct location and so that it is easy to spot missing items.

Shine (Seiso)

3S – cleanliness point with cleaning tools and resources.

Seiso is sweeping or cleaning and inspecting the workplace, tools and machinery on a regular

basis.

Goals:
• Prevent demolition.

• Keep the workplace safe and easy to work in.

• Keep the workplace clean and pleasing to work in.

• When in place, anyone not familiar to the environment must be able to detect any problems

within 50 feet in 5 sec.

Implementation:

• Clean the workplace and equipment on a daily basis, or at another appropriate (high

frequency) cleaning interval.

• Inspect the workplace and equipment while cleaning.

Standardize (Seiketsu)

Seiketsu is to standardize the processes used to sort, order and clean the workplace.

Goal:

• Establish procedures and schedules to ensure the repetition of the first three ‘S’ practices.

Implementation:

• Develop a work structure that will support the new practices and make it part of the daily

routine.

• Ensure everyone knows their responsibilities of performing the sorting, organizing and

cleaning.

• Use photos and visual controls to help keep everything as it should be.

• Review the status of 5S implementation regularly using audit checklists.

Sustain/Self-discipline (Shitsuke)

Shitsuke or sustain the developed processes by self-discipline of the workers. Also translates

as "do without being told".

Goal:
• Ensure that the 5S approach is followed.

Implementation:

• Organize training sessions.

• Perform regular audits to ensure that all defined standards are being implemented and

followed.

• Implement improvements whenever possible. Worker inputs can be very valuable for

identifying improvements.

• When issues arise, identify their cause and implement the changes necessary to avoid

recurrence

CHAPTER - 4

4.1 Findings and Suggestion

INFOSYS CASE STUDY - ‘Narayana Murthy and Infosys'

The case study ‘Narayana Murthy and Infosys' describes how Narayana Murthy, set up India’s

leading software company - Infosys. Narayana Murthy turned a small software development

venture that he had set up with his friends in 1981, into one of the leading companies of the

country. Infosys grew rapidly throughout the 1990s Narayana Murthy distributed the company's

profits among the employees through a stock-option program, and adopted the best corporate

governance practices. All this earned him praise and respect. In 1999, the company became

the first Indian firm to be listed on the Nasdaq Stock Market. In 2000, Infosys was poised

to become a true global company. By 2000, Infosys' market capitalization reached Rs.11 billion

and by 2001, Infosys was one of the biggest exporters of software from India. Narayana Murthy

had built an organization that was respected across the country, with very strong systems, high

ethical values and a nurturing working atmosphere. In February 2001, Infosys Technologies

Ltd. (Infosys) was voted as the Best Managed Company in Asia in the Information Technology
 sector, inleading financial magazine Euromoney's Fifth Annual Survey of Best Managed

Companies in Asia

KEY SUCCESS FACTORS

With his sound management skills, Narayana Murthy seemed to have taken Infosys to

the pinnacle of success with the following key success factors :1.

1. Leadership team:

The leadership team needs to balance vision with practicalexperience. In most cases,

a technology start-up will have a visionary and/or a technicalgenius (most often, these are the

founders) in place from day one. However, all to often,the leadership team is not rounded out

by people who actually know how to run a business and how to drive sales. Building a strong

balanced team can be one of thetrickier aspects of creating a successful start-up because it

necessarily requires thevisionary and the technical genius (founders) to admit their practical

shortcomings andgive up some of the control of the business. The idea behind a start-up is

oftensomebody's "baby" and, quite naturally, they want to control every aspect of

itsdevelopment. Once you move these people away from micromanaging the business,

thestart-up begins to have a chance.2.

2. Well-conceived business plan:

This is an area where the practical experience of awell-rounded leadership team gives the

start-up a leg up. The business plan needs to be practical and detailed. The business plan

provides the blueprint for the growth of thecompany. Perhaps more importantly, the business

plan is how you demonstrate theviability of the business to third party investors.3.

3. A strong product:
 It is a given that the product needs to be special – something thatwill differentiate itself from the

universe of competing products - but there are other important factors. Ideally, the product will

be one that can be protected by patent. If the products cannot be protected by a patent, then

the start-up has to be positioned tocapitalize on being the first to market. Absent patent

protection, being the first to market

4.2 Conclusion
Infosys is the incredible story of success and successful execution of business model; the company has

entered red ocean market with Insignificant stake and power in market. Business models proposed by

Infosys redefined market needs, improved service time and quality and conceptually change the game

rules that bigger players where following

Infosys demonstrates that it is possible to create success and built prosperity among the

poverty prevailing in India

So, I can conclude it can be said –

1. Infosys is a company that the entire world looks up to, in terms of one’s sound ethical judgment

doing business in a right way.

2. It continues to set standards in everything that it does

3. The people who make company never think twice when they have to make tough decision

involving ethics