Organizational Structure of Infosys

Project Report

Submitted to Management Department, ITM University, Gwalior

For the Fulfilment of 1st Trimester

Submitted By:-

Khushboo

Devina

Isha

Neha

Institute:

Management DepartmentITM University

ACKNOWLEDGEMENT

In this project we have made an honest and dedicated attempt to make the research material as authentic as it could and we earnestly hope that it provides useful and workable information and knowledge to any person reading it. During this small time frame of two months in which the project reached its completion, there were a few people whom we would like to make a mention of and without whose help the project would have never seen the light of the day. We also thank to our guide Dr. Yogesh Upadhya for his timely response which immensely helped in giving the project the initial direction it needed.

Date-…………………………. Place-…………………………

TABLE OF CONTENTS

1) Executive Summary2) Introduction Of company3) VISION4) MISSION5) ORGANIZATION STRUCTURE6) ORGANIZATION STRATEGY7) PEER COMPARISON8) BUISNESS PERFORMANCE9) SWOT ANALYSIS10) REFRENCES

SUMMARY

Infosys is one of the fastest growing and most admired companies in India, yet it earns98.1% of its revenues outside of India.1 the Company has relied on overseas business since it started in 1981 with seven engineers and Rs. 10,000. Infosys faced significant barriers because it operated in a bureaucratic country that was closed to outside investment. In addition, entrepreneurship was unheard of in India where most companies were large, family-owned conglomerates. Despite these challenges, Infosys saw an opportunity to offer low-cost technology services and was able to exploit value chain shifts in foreign markets while capitalizing on the shifts in government regulations at home. It became the first Indian company listed on the NASDAQ in 1999 and today has over 1, 41,822 employees and now having worth of Rs 34,517 crore with in a time duration of 30 yrs.

Infosys was able to capitalize on industry trends and on the changing regulatory environment to become one of the most successful companies in India. It was not clear when the Indian government would begin making laws that favored businesses, but Infosys was prepared when the time finally came. Infosys was not able to perfectly predict the explosion in outsourcing technology, but it was ready to take advantage of the

opportunity when it came. Infosys’ success is not only a function of change in the political sphere and technology industry, though. The company worked hard to develop an organization that adhered to high standards of quality, that put its customers first, and that provided an excellent work environment for its employees. According to one of its founders, “Each time we encountered a fundamental challenge, we viewed it as an opportunity to transform the company. We know that the future will pose new challenges. We don’t know which capabilities we might need. But, we are confident that we will be able to develop these capabilities and meet these challenges.”

INTRODUCTION

Infosys was founded on 2 July 1981with the capital of Rs. 10,000/ only by seven entrepreneurs:

1) N. R. Narayan Murthy2) Nandan Nilekani3) Kris Gopalakrishnan4) S. D. Shibulal5) K. Dinesh

6) Ashok Arora7) N. S. Raghavan officially being the first employee of the

company

Infosys Limited, formerly known as Infosys Technologies Limited. Infosys is a global technology Services Company headquartered in Bangalore. It is the second largest IT exporter in India with 1, 41,822 employees as of September 2011

The chances of success were very low for this company that was started by a small group of entrepreneurs with no connections to government officials and very little money in socialist India. Yet these entrepreneurs were confident that they could survive in the hostile environment and were determined to create a company that would compete with the best US and European companies. In order to compete with the best, the founders of Infosys realized that they would need to differentiate their company from other Indian companies. Infosys voluntarily adopted stringent accounting principles such as the US GAAP while most Indian companies used opaque accounting practices.3 (Starting in 2003, Infosys reported financial performance in compliance with accounting principles in 8 countries: Australia, Canada, France, Germany, Japan, UK, US, and India.4) It distributed ownership of the company among its employees while most Indian companies were controlled by a few powerful families. In addition, it gave employees benefit such as stock option plans, a health club

VISION of INFOSYS

“ Be globally respected corporation”

Mission of Infosys is to:

"To achieve the objectives in an environment of fairness, honesty, and courtesy towards our clients, employees, vendors and society at large."

ORGANIZATIONAL STRUCTURE

Organizational structure is the formal arrangements of jobs within an organization

A structure depends entirely on the organization's objectives and the strategy chosen to achieve them. In a centralized structure, the decision making power is concentrated in the top layer of the management and tight control is exercised over departments and divisions. In a decentralized structure, the decision making power is distributed and the departments and divisions have varying degrees of autonomy. An organizational chart illustrates the organizational structure.

Why Have a Structure• All businesses have to organise what they do• A clear structure makes it easier to see which part of

the business does what• There are many ways to structure a business

INFOSYS IN BEGINNING• Infosys was a start-up founded by 7

individuals.• Early days were a constant struggle• Dynamic Environment.• Companies focus was on delivering a single

product based on single technology in a single marketplace.Low degree of Formalization, low complexity and high centralization

Period from 1989 – 2002• In 1989, company lost some key accounts.• Drastic change in the overall strategy.• The period after liberalization led to massive

growth. • Started catering to different market segments

and different clients.• Company had to adhere to a new set of

guidelines and streamline process due to the IPO in 1992.

• The company structure was split up into functional units.

• Project Matrix Structure was employed within the production unit.

• Characterized by increasing complexity, moderate formalization and moderate degree of centralization.

2003 ONWARD……..

O Company had become too big to carry on without modifying the existing structure.

O Concept of decentralization was brought in.O Company divided into IBU’s. Each IBU concentrated

on a particular sector.O Made the company more customers focused. A

Gamma B transformation.O Managers of each IBU were empowered to take

decisions to further the IBU’s prospects.O Role Enlargement and Role Specialization.O Decentralized system with an ability to take quick.O Crucial as a result of the dynamic world order after

the Sept 11 attacks and Asian financial crisis.O Within each IBU the project matrix structure was

carried forward. O In 2007, the IBU concept was further refined to take

into account geographic growth opportunities.O The 2007 reorganization was also for role

enlargement of the second line of business leaders.

CHAIRMAN AND DIRECTORSO N. R. Narayan Murthy appointed Chairman Emeritus.O Mr. K. V. Kamath named as the Chairman of the

Board.

O Mr. S. Gopalakrishnan named as the Co-Chairman of the Board.

O Mr. S. D. Shibulal named as the Chief Executive Officer and Managing Director.

ORGANIZATION CHART

CEO S. ShibulalDirector

Sridar IyengarDirector

Marti SubrahmanyamDirector

R SeshasayeeDirector

Ann FudgeDirector

Jeffrey LehmanDirector

David BoylesDirector

Omkar GoswamiLead Director

Deepak SatwalekarChairman of the Board (effec...

K. V. KamathCo-Chairman of the Board (ef...

S. GopalakrishnanChairman Emeritus (effective...

Narayana Murthy

Infosys BPO

SSCFO

Vibin BalakrishnanGlobal Immigration

VNLegal

SMKCommunication, Information &...

DKDelivery Excellence

SBHuman Resources

NGSenior Vice President

BSBanking & Capital Markets

AVQuality, Tools & Software re...

SKPlanning & Business Assurance

SPInfosys Labs

SG

COO, Infosys BPO

RI

Risk Management

MDRSecretary & Compliance

PKSystems Integration

VBCommunication Design Group

SMComputers & Communications

MKK

Infosys Consulting

SP

Infosys Consulting

RJFinacle

HMInfosys Leadership Institute

MBNew Markets & Services

DVGAustralia & New Zealand

JKEnergy, Utilities & Services

PTIndia Business

BHRInsurance, Healthcare & Life...

EPAdministration,Infrastructure...

RKUEnterprise Solutions

CKRetail, Consumer Goods

PRTesting Solutions

MTEducation & Research

SMInfrastructure Management

ANInformation Systems

N R Narayan Murthy:-

Nagavara Ramarao Narayan Murthy (Kannada nāgavāra rāma-rāya nārāyaṇa mūrti), better known as N. R. Narayan Murthy, is an Indian industrialist and software engineer. He and six other engineers founded Infosys in 1981. Mr. Murthy served as CEO from 1981 to 2002. From2002 to 2011, he served as Chairman. In 2011, he became Chairman Emeritus.

ORGANIZATION STRATEGY Infosys has adopted a client-focused strategy

to achieve growth Company has an image of quality driven model

rather than cost-differentiating model

Increase business from existing and new clients.

Expand geographically It has added new service offerings, such as

consulting, business process management, systems integration and infrastructure management, which are major contributors to its growth.

Develop deep industry knowledge Enhance brand visibility Pursue alliances and strategic acquisitions

PEER COMPATITORS OF INFOSYS1) TCS2) WIPRO3) HCL TECH

Market Cap.(Rs . Cr)

Sales Turnover

Net Profit

Total Assets

TCS 216,948.16

29,275.41 7,569.99 19,620.61

INFOSYS 162,878.45

25,385.00 6,443.00 24,501.00

WIPRO 91,415.07 26,340.70 4,843.70 26,065.00

HCL TECH 29,669.10 6,794.48 1,198.28 6,889.31

1234

NET PROFIT 1) TCS 2)INFOSYS 3) WIPRO 4) HCL TECH

TOTAL ASSETS) TCS 2)INFOSYS 3) WIPRO 4) HCL TECH

1234

SALES TURNOVER) TCS 2)INFOSYS 3) WIPRO 4) HCL TECH

Infosys Technologies – Business Performance

GROSS PROFIT MARGINGross profit margin is the difference between sales and the cost of goods sold divided by revenue. It expresses the relationship between gross profit (sales - cost of goods sold) and sales revenue.

INFY Gross Profit Margin Range, Past 5 Years

Minimum 38.69% Jun 2007

Maximum 43.55% Dec 2008

INFY Gross Profit Margin

Sep 2011 41.29%

REVENUE BY INDUSTRY

Balance sheet analysisMar '11

Mar '10 Mar '09 Mar '08

Total Share Capital

287.00 287.00 286.00 286.00

Equity Share Capital

287.00 287.00 286.00 286.00

Reserves 24,214.00 21,749.0017,523.0

013,204.00

Networth 24,501.00 22,036.0017,809.0

013,490.00

Total Liabilities 24,501.00 22,036.0017,809.0

013,490.00

Gross Block 6,934.00 6,357.00 5,986.00 4,508.00

Less: Accum. Depreciation

2,878.00 2,578.00 2,187.00 1,837.00

Net Block 4,056.00 3,779.00 3,799.00 2,671.00

Capital Work in Progress

499.00 409.00 615.00 1,260.00

Investments 1,325.00 4,636.00 1,005.00 964.00

Sundry Debtors 4,212.00 3,244.00 3,390.00 3,093.00

Cash and Bank Balance

641.00 929.00 805.00 657.00

Total Current Assets

4,853.00 4,173.00 4,195.00 3,750.00

Loans and Advances

5,273.00 4,201.00 3,303.00 2,804.00

Fixed Deposits 13,024.00 8,868.00 8,234.00 5,772.00

Total CA, Loans & Advances

23,150.0017,242.0

015,732.00 12,326.00

Current Liabilities 2,056.00 1,995.00 1,544.00 1,483.00

Provisions 2,473.00 2,035.00 1,798.00 2,248.00

Total CL & Provisions

4,529.00 4,030.00 3,342.00 3,731.00

Net Current Assets

18,621.0013,212.0

012,390.00 8,595.00

Total Assets 24,501.0022,036.0

017,809.00 13,490.00

Contingent Liabilities

1,013.00 295.00 347.00 603.00

Book Value (Rs) 426.73 384.02 310.90 235.84 195.41

COMPARISON OF YEARLY RESULTS OF INFOSYS

Mar '11 Mar '10 Mar '09 Mar '08 Mar '07

Sales Turnover 25,385.00 21,140.00 20,264.00 15,648.00 13,149.00

Other Income 1,147.00 910.00 502.00 683.00 375.00

Total Income 26,532.00 22,050.00 20,766.00 16,331.00 13,524.00

Total Expenses 16,971.00 13,780.00 13,358.00 10,685.00 8,926.00

Operating Profit 8,414.00 7,360.00 6,906.00 4,963.00 4,223.00

Gross Profit 9,561.00 8,270.00 7,408.00 5,646.00 4,598.00

PBDT 9,561.00 8,327.00 7,408.00 5,646.00 4,604.00

Depreciation 740.00 807.00 694.00 546.00 469.00

PBT 8,821.00 7,520.00 6,714.00 5,100.00 4,135.00

Tax 2,378.00 1,717.00 895.00 630.00 352.00

Net Profit 6,443.00 5,803.00 5,819.00 4,470.00 3,783.00

Earnings Per Share 112.25 101.10 101.73 78.15 66.14

Equity 287.00 287.00 286.00 286.00 286.00

Reserves 24,214.00 21,749.00 17,523.00 13,204.00 10,876.00

Face Value 5.00 5.00 5.00 5.00 5.00

Infosys Technologies – SWOT Analysis

Strengths

• Operational excellence to deliver GDM

• Capability to attract & keep talents

• Strong financial

• Strong relationship with Large Corporations

• The company has bases in 44 global development centers, most of which are located in India, although

the company has offices in many developed and developing nations

• Infosys is in a strong financial position. The business turned over more than 680 crore in 2011 . This means that it has the capital to expand, and also the basis to leverage potential investors.

Weaknesses

• Over-reliance on US economy• Limited position in value chain (i.e. No

presence or relationship with consulting business

• Despite being a huge IT company in relation to its Indian competitors, Infosys is much smaller than its global competitors. Infosys generated 6443 crore, which is relatively low in comparison with large global competitors such as TCS (7569.99 Crore).

Opportunities

• More cost/speed conscious customers

• Market growth

• Higher awareness on off-shore model

Threats

• Wage inflation due to competition on talents (15+% / year)

• Newer disruptive business models (i.e. web services, web 2.0

REFRENCES

• WIKIPEDIA• INFOSYS-AR-11 PDF• FUNDAMENTAL STRUCTURE OF ORGANIZATION

PDF FILE• OFFICIAL BOARD.COM(ORGANIZATION CHART)