Infosys Technologies, Limited 293Copyright © 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtencorporation but the nimbleness of a start-up—yet another paradox. As a result, Infosys
developed a complex strategy characterized by:
Scalability
Murthy wanted to build a scalable corporation that could simultaneously grow in
terms of revenues, profitability, people, cultural value systems, and value chains.
Nandan, the then COO, summarized scalability as “the ability to constantly evolve while
avoiding a major disconnect in our operations. We constantly dissect the global IT
domain — not just our competition, but also our customers, their businesses, their
processes, and then try to foresee problems they would face in the future. Then we test
our analyses and learn from our mistakes.” Infosys’s initial trials with scalability were
frustrating, but with time, the management realized benefits of developing a scalable
organization. As K. Dinesh, one of the directors, said, “IT firms operate in an environment
that, at best, can be described as the sum total of all the business environments in which
our clients operate. We have to master numerous technologies, which change very
frequently, customer needs are in constant flux, and projects have to be executed across
multiple cultural systems. We couldn’t have survived as a stable organization!”
Developing scalability required meticulous long-term planning. The management
would take a cold hard look at the future and try to project revenues by different growth
areas. These projections were used to assess the future requirements of capacity, people,
training, and investment in technology. As Nandan explained, “You have to do forward
planning, take a long view of the business, which in turn translates into the necessary
investments in people, technology, and physical infrastructure.”
Scalability ensured that despite the operational rigidity that usually accompanies
a firms’ organic growth, Infosys remained a flexible organization that adapted with time.
Murthy summarized: “The crux of scalability is to ensure that we grow simultaneously
on all fronts while maintaining the quality, agility, and effectiveness of a small company.”
PSPD Model
Another one of Murthy’s brainchild, the Predictability Sustainability Profitability
and Derisking (PSPD) model was a robust revenue forecasting system. Exhibit 6
illustrates the model. Predictability and profitability referred to the future revenue
situation of the company. For example, Murthy mentioned regarding predictability: “I
just cannot imagine how any company can fail to estimate its revenues for the next year
and still call itself a healthy business. Which Fortune 500 client would like to depend on
a vendor whose CEO is not certain about the company’s future?”
Sustainability had a broader meaning and was defined in terms of five parameters
that ensured longevity of the corporation. They include: a climate of openness, learning
attitude among the employees, a value system ensuring fairness, increased speed of
execution, enhanced imagination to pioneer great ideas, and excellence in ensuring a
seamless execution of these parameters.
Submodels were developed to achieve the three strategic goals of predictability,
sustainability, and profitability. Predictability and sustainability were ensured by the
Customer Relationship Model (CRM), and profitability was ensured by the Global
Delivery Model (GDM), which required shifting costly project components from the
client location to relatively cheaper locations around the world.