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MANAGEMENT CONTROL SYSTEMS
INFOSYS TECHNOLOGIES LIMITED
Submitted By:
ABHISHEK ANAND
DEEPESH MITTAL
SUHAS CHAUDHURY
SAURABH JOHARI
SHALINI YADAV
SANAM LAKHANI
RUMELI DEY
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CONTENTS
INFOSYS ...................................................................................................................... 3
ORGANIZATION STRUCTURE ....................................................................................... 3
Infosys in the beginning .......................................................................................... 3
Period from 1989 - 2002 .......................................................................................... 3
2003 Onwards ......................................................................................................... 4
MANAGEMENT CULTURE ............................................................................................. 4
CONTROL PROCESS .................................................................................................... 5
INFOSYS’ GLOBAL DELIVERY MODEL .......................................................................... 6
IMPLEMENTATION OF GDM MODEL .......................................................................... 7
ADVANTAGES FROM GDM ........................................................................................ 8
RESULTS AFTER THE IMPLEMENTATION OF GDM ..................................................... 8
CHALLENGES ........................................................................................................... 9
RECOMMENDATIONS .............................................................................................. 9
COMMUNICATION ........................................................................................................ 9
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INFOSYS
Infosys Limited was started in 1981 by seven people with US$ 250. Today, they are a global leader in the
"next generation" of IT and consulting with revenues of US$ 6.604 billion (LTM Q2-FY12).
Infosys defines designs and delivers technology-enabled business solutions for Global 2000 companies.Infosys also provides a complete range of services by leveraging our domain and business expertise
and strategic alliances with leading technology providers.
Their offerings span business and technology consulting, services, systems, product engineering, custom
software development, maintenance, re-engineering, independent testing and validation services, IT
infrastructure services and business process outsourcing.
Infosys pioneered the Global Delivery Model (GDM), which emerged as a disruptive force in the industry
leading to the rise of offshore outsourcing. The GDM is based on the principle of taking work to the
location where the best talent is available, where it makes the best economic sense, with the least
amount of acceptable risk.
Infosys has a global footprint with 64 offices and 65 development centers in US, India, China, Australia,
Japan, Middle East, UK, Germany, France, Switzerland, Netherlands, Poland, Canada and many other
countries. Infosys and its subsidiaries have 141,822 employees as on September 30, 2011.
Infosys takes pride in building strategic long-term client relationships. 98.5% of our revenues come from
existing customers (Q2 FY 12).
ORGANIZATION STRUCTURE
Infosys in the beginning
Infosys was a start-up founded by 7 individuals. Early days were a constant struggle due to the 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 were few of the
characteristic.
Period from 1989 - 2002
In 1989, company lost some key accounts this lead to a drastic change in the overall strategy. The period
after liberalization led to massive growth. The company 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 and the Project Matrix Structure was employed within
the production unit.
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These changes lead to increasing complexity, moderate formalization and moderate degree of
centralization.
2003 Onwards
Company had become too big to carry on without modifying the existing structure so the concept of
decentralization was brought in. The company was divided into IBU’s (India Business Units), each IBU
concentrated on a particular sector and this made the company more customers focused.
Managers of each IBU were empowered to take decisions to further the IBU’s prospects and within each
IBU the project matrix structure was carried forward. Decentralized system with an ability to take quick
decisions was build.
In 2007, the IBU concept was further refined to take into account geographic growth and opportunities.
The company has adopted a free form organization devoid of hierarchies. Everyone is known as
associates irrespective of his position in the company. This system not only helps in creating the feeling of equality but also helps in developing project leaders
MANAGEMENT CULTURE
Culture represents collective norms and behaviors of a group of people be it any region, country or an
organization. Organizational or management cultures are the characteristics that are based on morals,
values, traditions and personnel behavior. It is generally set by the higher management in an organization
and most of the times it acts as a control mechanism.
The various dimensions of Management culture are as follows:
Process vs. Result - whether the company focuses more on the manner in which work is done or the
outcome. Job vs. Employee- whether the company focuses more on the work to be done or on its
employee’s wellbeing. Open vs. Closed - whether anyone can fit into the organization or only special few
people can join. Loose vs. Tight Control - management casual or serious. Normative or Pragmatic -
whether ideologically driven or market driven.
According to Mr. Narayan Murthy “It is our vision at Infosys, to create world-class leaders who will be at
the forefront of business and technology in today's competitive marketplace. This has been at the
forefront of their management culture.
Infosys is often voted as one of the top employers of India for its management culture and employee
friendly practices which often act as their control system as well.
Infosys’s stresses that its operations are driven by key values that s called as C-LIFE.
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Customer Delight: A commitment to surpassing the customer expectations. Leadership by Example: A
commitment to set standards in their business and transactions and be an exemplar for the industry and
our own teams. Integrity and Transparency: A commitment to be ethical, sincere and open in their
dealings. Fairness: A commitment to be objective and transaction-oriented, thereby earning trust and
respect. Pursuit of Excellence: A commitment to strive relentlessly, to constantly improve themselves,their teams, their services and products so as to become the best.
The company attracts the best talent from across the country through a selection process and the
employees are required to go through training process for 14 weeks. In addition all the employees are
required to go through some form of training every year and some of the chosen employees are trained at
the Infosys Leadership Institute to take on higher responsibilities in the company. The company follows a
variable compensation structure which is dependant on the performance of the individual and the team as
a whole. Thus the company follows a closed culture where only few people who can go through the
selection process and training can only fit in.
Infosys does take care of its employees by providing facilities from fully furnished Infosys hostels for the
trainees to restaurants, movie theatres, swimming pools, gymnasiums and several other facilities in the
Infosys Development centers. Moreover it follows an informal culture in office where the employees
(seniors and subordinates) address each other by only their first names which facilitates easy and open
communication within the organization and in turn motivates the employees to work for the benefit of the
organization.
Thus it can be concluded that in Infosys their management culture acts as their control system wherein
their result driven attitude and closed culture ensures best output from the employees and refrain them
from unethical practices whereas the facilities provided like ESOPs , informal communication practices
and sources of entertainment provide motivation for the employees to serve the company.
CONTROL PROCESS
Reducing cost of compliance using Continuous Controls Monitoring (CCM)
Increased globalization, complexity in business environments and higher emphasis on corporate
governance drive the need for compliance. Compliance can be external, i.e., imposed by legislation, or
internal, which is driven by organizational policies and procedures. Progressive and matured
organizations such as Infosys consider compliance as an enabler to meet business objectives. Their
focus goes beyond the requirement of law and use compliance as means to increase process efficiency
and stakeholder confidence.
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Continuous Controls Monitoring (CCM) assumes a periodic review of controls. It is important to note that
for risk and compliance, CCM involves near real-time review, which can be performed only if testing is
automated. Hence, automation of testing is the key to Continuous Controls Monitoring.
Initially, compliance was virtually non-existent since there were only few frameworks available. Internal
control did not involve testing and assessment and internal audit was largely concerned as group
reporting to Chief Financial Officers (CFO) and not the audit committee. The Sarbanes Oxley Act, 2004
was the landmark legislation for compliance despite which companies faced lack of defined processes for
compliance. However, as compliance evolved, organizations realized that automation, i.e., control
execution and compliance program management, was key to reduced cost of compliance.
CCM helps reduce the cost of compliance through:
REDUCED EFFORT: Automated testing of controls reduces effort for review REDUCED AUDIT COST:
Auditors place greater reliance on automated testing and reduce effort on substantive testing
INCREASED FREQUENCY OF AUDIT: CCM enables more frequent audit with reduced cost MULTI-
COMPLIANCE CAPABILITY: CCM supports compliance with multiple regulations thereby ensuring
controls are tested only once REMOTE MONITORING: CCM enables testing of controls from remote
location, enabling monitoring controls in a cost-effective manner PROACTIVE MONITORING: Near real-
time testing prevents fraud and revenue leakage CORPORATE GOVERNANCE: CCM’s near real-time
monitoring prevents control failures and enables corrective action to ensure a secure organizational
image.
Implementing CCM follows a process similar to software implementation. Effective planning is important
to maximize value of investments by ensuring standardization, optimization and automation.
Automation is the key for successful CCM implementation. Unless the controls are automated, it is difficult
to test using a tool. The design of CCM is primarily dependent on reporting requirements, compliance with
regulations and internal policies, key controls to be monitored, etc. Automated testing can be monitored,
assessed and reported from remote locations.
INFOSYS’ GLOBAL DELIVERY MODELThe salient features of GDM are outlined below:
• The large scale software development projects were divided into 3 categories:
The first category included tasks that were to be carried out at the location of the client.
The second category included tasks that needed to be carried out closer to the client.
The third category consisted of tasks that could be done in remote locations, where process-
driven technology centers with highly skilled manpower were easily available.
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• The project work was carried out with teams located at different locations across the world
working round-the-clock on the project.
• Infosys used two types of Global Development Centers (GDCs) – Proximity Development Centers
(PDCs) and Offshore Development Centers (ODCs) to carry out the activities related to software
development.
• The major components of GDM included – knowledge capture, daily handoffs, quality control,
continuous improvement, mobilizing and demobilizing staff as required, recruiting and training the
right kind of people, billing for cross-border teams and connectivity of the locations.
• Infosys developed People Knowledge Map which had contact information of the individuals who
were expert in specific areas so that people working on a particular project could contact them in
need.
• Infosys benchmarked its IT services against international quality standards like ISO 9000, CMM
and the Malcolm Baldrige framework.
IMPLEMENTATION OF GDM MODEL
• Infosys used the services of several service providers along with a mix of satellite and fiber optic
links with facilities for alternate routing. Video conferencing was used for executive level
discussions and training.
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• As a part of expansion, Infosys launched GDM Plus, an enhanced service delivery model, a
combination of more services and excellence in execution. GDM Plus was Infosys’ strategic
response to changing market conditions and the competitive landscape to deliver high volumes to
customers. Execution excellence was to be achieved through business solutions, technology,
domain expertise, quality, operational efficiency and people development.
ADVANTAGES FROM GDM
Rapid growth in revenues
Lower risks
Talented workforce
Best results
Flexibility
Round the clock productivity
Faster response
Shorter lead time
Cost benefits
RESULTS AFTER THE IMPLEMENTATION OF GDM
Infosys’ revenues grew four-fold in the past four years and it also continued attracting a pool of high
quality talented professional.
In 2005-06, Infosys derived more than 40% of its revenues through new GDM based services like
package implementation, independent validation, business process management, infrastructure
management and systems integration
The benefits to clients included 35% reduction in cost and 75% reductions in time to market for
various products across various geographical regions.
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CHALLENGES
MNCs like Accenture, IBM Global Services, and Electronic Data Systems have started operating from
India and began offering the same offshore rates as Indian companies.
The entry of multinationals has put pressure on Infosys in terms of retaining talented manpower.
Infosys faced stiff competition from other Indian IT companies which were adopting new structures.
Infosys and its GDM were heavily dependent on US-based companies. Since the IT spending of the
US companies was decreasing and was expected to reduce further, it could put Infosys in a tight
spot.
Infosys also faced growing competition from countries like China and the Philippines which were
offering lower wages and more facilities.
RECOMMENDATIONS
Infosys has the first mover advantage in the domain but in order to retain the skilled employees under
highly competitive scenario it need to come up with some schemes for the employees. It could hike
the salaries or increase the perks that it has been offering so far.
As Infosys was a pioneer with the GDM model, they have already gained an expertise on this front
and can try discovering newer horizons and think of newer services that can be provided to the
existing and prospective customers. As the competitors are still trying to build their model from
scratch, it will take them time to acquire skills to the GDM model as well as to compete with the newer
services that Infosys would offer in the consequent time period.
COMMUNICATION
It is a well known fact that a sincere two way dialog is very important for any business organization to win
and keep the trust of its stakeholders. Infosys has always ensured that they have open and collaborative
communication channels with their customers, employees, investors and vendors.
Intensive customer interaction
As an IT services company, Infosys has a commitment to exceed the customer expectations as one of it
defined values. They make use of CSAT, an annual Customer Satisfaction Survey, to gauge the
satisfaction of their customers globally. This survey enables the customers to rate the company on key
parameters, including comparison with other global IT service companies. The company then analyzes
the feedback and identifies key areas for improvement like business strategy, people capabilities,
delivered solutions and services and innovation. Confluence, Infosys’ annual customer leadership
summit, is held for customers in Europe, Middle East and for customers in Americas. Selected senior
executives from global organizations share their ideas and best practices in the areas of innovation,
business, leadership and other sustainability aspects.
Facilitating employee-employer dialog
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The company treats their employees as their greatest assets and value their opinion and feedback to
improve the company’s performance as an employer. The company has developed multiple channels to
enable employees to express their opinions and participate in organization specific policy and process
definition exercises. These include:
Employee Satisfaction Survey (ESAT)
The company has partnered with Gallup, the world leader in employee engagement surveys, to conduct
the survey. The results of the survey indicate workplace strengths and weaknesses and examine the
drivers of the company’s workplace culture. This helps Infosys in benchmarking their workplace quality
against other organizations.
Quarterly Town Hall (QTH)
These meetings are held at organization and unit levels in order to share the quarterly progress of the
company with the employees. The senior management also conveys corporate strategies and new
policies through these meetings.
Sparsh
Sparsh is the name of the company’s intranet. It is an important tool for communicating key business
achievements, policies, operational strategies and messages from senior management.
InfyTv
India’s first corporate TV channel, InfyTv has created a decentralized, collaborative platform for richmedia content. It has emerged as a compelling communication platform.
CEO-employee column
The interactive column, hosted on Sparsh, allows employees to connect directly with the company CEO
every month. Any employee can directly share suggestions or raise queries on policies and strategies and
receive responses from the CEO. This serves as a platform for employees to approach, interact and
communicate with the top management.
HRD Blog
The internal communication team (IC) maintains the HRD blog, which enabled the employees to share
their views on the company policies, benefits, values and culture.
The company takes employee grievances and complaints seriously. Hearing Employee and Resolving
(HEAR) is a formal mechanism to help employees express unresolved grievances and instances of
discrimination.
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The Anti Sexual Harassment Initiative (ASHI) allows employees to report sexual harassment in the
workplace and cases are heard and resolved by an unbiased group.
Infosys has established control systems for complying with local laws on anti-corruption in the
geographies they operate. Infosys believes that employee participation is crucial in strategizing and
influencing the company’s business policies and operations. The employees are provided with the
following channels in order to participate in decision making processes:
Strategic and Action Planning meet (STRAP): Tier leaders participate in this annual meet to strategize on
the organization’s business plan for the year ahead.
Voice of Youth (VoY): Infoscions who have less than 5 years of work experience and are below 30 years
in age, are elected to the VoY team. These teams act as an important communication channel between
senior management and employee to recommend and plan location specific operational issues.
The Annual General Meeting (AGM) is the most important forum for direct communication with the
investors. A report on the company’s operations and financials along with select highlights is presented to
all shareholders who attend the meeting in person or view it on the company website.