Infosys

Harnessing knowledge resources for increasing returns scalable structuration at Infosys Technologies... 

Figure 12.1. Infosys Technologies growth in revenues and after-tax net income, 1994-2003. (Source Infosys Annual Reports.)...

A key aspect of growth at Infosys is that the company has had to navigate major shifts in the global IT services market without faltering. For instance, at the beginning of the new millennium, the demand for Y2K-related IT services declined considerably. This decline was followed immediately by the boom and bust years in the dotcom and... 

For a detailed thirty-three-page version of the case on Infosys, see Garud, Kumaraswamy, and Malhotra (2003). 

Most firms boast beautiful buildings. This is certainly true of the buildings within the campus-like facilities at Infosys s headquarters near Bangalore, India. But, it would be a mistake to look just at Infosys s well-designed buildings. As one enters the company s campus, it is obvious that Infosys is also continually and systematically building its intellectual capital. 

This capacity to build is inherent in its employees who are specifically recruited for what Infosys labels as learnability. An Infosys word that is both noun and verb, learnability represents the ability of an individual to derive generic conclusions from specific situations and then to apply them to new unstructured situations. Thus, while employees at most firms may be proud of their learning ability, Infoscions are proud of their learnability. 

Learnability is much more than routine learning by doing. It includes an ability to reflect in action (Schon, 1983). Infosys s director of HR offered a concrete example of learnability and why it is so important ... 

Another way to interpret the maturity level of Infosys s processes is to consider them as vesting the firm with dynamic capabilities. Specifically, Infosys has nsed CMM as a framework not jnst to fine-tnne, but also question and change its software development methodologies over time. The head of the Quality Department explained how Infosys s software development methodology has changed since the adoption of CMM ... 

This philosophy of iterative and incremental action - one that in our literature would be closest to the notion of logical incrementalism (Quinn, 1978) - is not restricted just to software development, but pervades the entire firm. For instance, this methodology is implicit in the measured implementation process prevalent at Infosys. As Infosys s COO noted We tend to take small steps in different directions to see what the results will be, before taking big leaps. The philosophy is to take small steps and get feedback for two or three cycles before we scale up. ... 

Infosys has also set up proximity centers and development centers in different geographic locations around the world to mine local knowledge and resources. Besides, Infosys periodically undertakes joint projects with start-up firms and makes minority investments in small firms to track or gain access to cutting-edge technologies. 

Even in a culture such as that of Infosys where sharing is encouraged and embraced, it does not occur automatically. This is because everyday pressures drive employees to complete one project and immediately start another. Also, the rapid pace of change places a premium on learning new technologies instead of pausing to recount or record past experiences. Therefore, even Infosys has to strive to induce knowledgesharing at all levels. 

In firms such as Infosys, intellectual capital lies distributed among employees who can determine the extent and quality of their intellectual contributions. As Infosys s chairman pointed out, the firm s intellectual assets walk out of the door every evening and it is the management s responsibility to ensure that they return the next morning. 

What role can top management play if front-line knowledge workers make most decisions Surely, managers cannot continue to be the keepers of content as was the case in mass-production environments. At Infosys, it appears that managers are part of a larger process of mutual mentorship, a process that the founders hope will create an institution that survives them. Indeed, the philosophy of Infosys s top management is to recruit people who are brighter than themselves and then mentor them. 

Withont donbt, the capability to create, harness, and govern intellec-tnal capital fnlly is important. Eqnally important for a company dealing with continnal change is continnity or coherence amidst this change. There are several facets of Infosys that offer such continuity and coherence even as the company confronts continual change. 

For instance, it is second natnre for Infoscions to offer a model in response to qneries pertaining to Infosys s strategy. Whether it is their overall PSPD Model, the Global Delivery Model, or the Customer Relationship Model, these models codify bonnds for everyday decisions and actions. For instance, the PSPD Model codifies Infosys s strategic goals. Infosys s CFO and managing director explained ... 

It would be a mistake, however, to think of models such as PSPD as sterile tools applied without reflection to address challenges offered by the continually changing environment. After all, any model is but an aid to decision-making and cannot replace human judgment. Indeed, managers at Infosys who use these models are continually reminded of the need to use their judgment. 

A second facet that offers Infosys continuity with change is its culture. For Infosys, such cultural mechanisms are embodied in a set of core values which stress meritocracy. As an Infosys middle manager commented The Infosys culture is not an authoritarian or autocratic... 

Such sharing and openness also is reflected in Infosys s commitment to complete transparency in financial and operational aspects. For instance, Infosys reports its financial results to conform to the GAAP of seven different countries around the world. Infosys s director of Customer Delivery revealed another aspect of transparency We are open about our processes and knowledge. For instance, we have published a book on CMM which explains most of our practices. We are also happy to share our knowledge with customers and anyone else who asks. ... 

Indeed, such transparency transforms Infosys into a naked organization, making continual improvement and transformation critical for staying ahead. 

The two faces of the Greek god Janus symbolize an end as well as a beginning. If one were to apply this image to Infosys, we see that the promise of scalability lies in Infosys s ability continually to evolve from the very platforms it has created. When asked to comment on Infosys s journey and its ability to respond to future challenges, a founder-director had this to say 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... 

This confidence stems from a unique capability to co-evolve with the fluid IT environment within which Infosys operates. Continuity and change are inherent in Infosys s operations as it uses the very resources and capabilities it has built in the past as platforms to explore and exploit emerging opportunities. Scalability lies in Infosys s ability to encapsulate its past experiences such that the accumulated stock and associated flows result not in core rigidities - the perpetuation of Infosys as it once was - but in dynamic capabilities that fuel its continual transformation. That is, Infosys represents a continually upgradable platform, a firm that is always in the making. 

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