In an industry that by and large follows a simple equation of more people equaling higher revenues, issues facing companies like Infosys are, expectedly, also about people. Recruitment is the number one challenge, trailed narrowly by training, deft deployment and attrition control.

Infosys added about 17,000 people in FY 2005-06. The company is looking at hiring another 25,000 this year. With most recruits needing to be trained or re-skilled, investments are huge. It is spending $65 mn on doubling the capacity of its 270-acre Mysore Global Education center, the largest corporate training center in the world.

Getting the supply side right is critical for scale and growth. There were reports about growth slowing in Q4 due to execution issues: that skill-set mismatch had caused the company to turn away from new business or give it away to sub-contractors. Infosys denied the report and Q4 growth did not really slow down. But with growing complexity of projects, rapidly finding the right and ready people is a challenge.

NANDAN NILEKANI CEO, President and MD, Infosys

Infosys recruited over 4,000 experienced people in the last 12 months to maintaining the number of managers and leaders. It had an advantage with an average employee age of 24 (and 43% of the employees below two years' experience) compared to Wipro's 26. But attrition, which had dipped a bit, a year earlier, inched up to 11.2% from 9.7%. There is still the perpetual middle management pressure to contend with, something the company's new HR chief TV Mohandas Pai will brave this year. Pai gave up the CFO position to V Balakrishnan, former senior VP of finance and company secretary, to take charge of HRD, education, research and admin. Former global HR head of the company, Hema Ravichander, had quit in May 2005 after a decade-long stint.

After Murthy
There is more transition in store as chairman and chief mentor N R Narayana Murthy steps down on August 20, the day he turns 60, to continue as non-executive chairman. Nurturing future leaders may also remain his domain: He's been running a project called 'Thousand Boardroom Consultants' for the past two years, where employees are groomed to interact confidently with the CXOs of Fortune 500 organizations.  

CEO Nandan Nilekani, meanwhile, continues to spend much of his time with customers. Especially with the ones who have a strategic partnership with Infosys. Half the time he is on the road with the rest divided between “creating an enabling environment for the company to grow”, strategizing, meeting employees, investors and the media.

Group One
Most of Infosys' constituent divisions and companies have grown well in FY 2005-06. The company's 'One Infy' service is also gaining momentum.

One Infy lets clients buy multiple services units deals with one contact point at Infosys, which ensures that different services are combined properly and delivered. The company revamped its account management, to have one person responsible for a relationship: the engagement manager, to whom managers report from different service lines.  Finacle, its core-banking product, reportedly registered five wins because of One Infy.

Progeon, the BPO subsidiary, is also a key part of the group's end-to-end solutions play. With BPO and IT getting increasingly integrated, Infosys, which bought back Citibank's stake in Progeon, may well consider changing Progeon's name back to something like Infosys BPO in the next couple of years.

Deliberate Differentiation
Much of the year saw work on differentiation, and changing the way the company is perceived or services are delivered. Through its consulting group, it launched a solutions program. With this, the company is bringing out solutions based on industry trends, say in anti-money laundering or in RFID-based applications. Second, even in its traditional services, it attempts to differentiate. In maintenance, for example, it uses its 'intelligent production support platform' to allow use of past history and data to solve maintenance requests much faster.

The other strategic initiative at Infosys last year involved preparing for large contracts and deals. It involves recruiting people from outside the country with prior experience. The much talked about ABN Amro deal did give the company some confidence, though it was reported to be a price compromise. But it meant visibility in Europe, a geography with more potential than the current 25% revenue contribution.

Even so, big deals have lower rates and longer lock-in. When business is growing, Infosys is reluctant to tie up big resources on long-term projects, especially at low prices.  That's not a capability or execution issue, but a business decision for Infosys: it prefers to be choosy about its deals.

Goutam Das
goutamd@cybermedia.co.in

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