Business Profile of Infosys and its founder, Narayan Murthy Essay Example

Powerful Peoples. In 2001, Narayana Murthy was named by TIME/CNN as one of the 25 most influential planetary executives. He was the first receiver of the Indo-French Forum Medal ( 2003 ) and was voted the World Entrepreneur of the Year - 2003 by Ernst and Young. The Economist ranked Narayana Murthy eighth on the list of the 15 most admired planetary leaders ( 2005 ) and Narayan Murthy besides topped the Economic Times Corporate Dossier list of India 's most powerful CEOs for two back-to-back old ages - 2004 and 2005.

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April 26, 2004

What makes Infosys tick?

Infusion from Infosys Technologies co-founder and CEO Nandan M Nilekani 's interview to CIOL:

Actually when Infosys was formed, all of us were working with Patni in Mumbai and Narayan Murthy was our foreman at that place, heading the package group. The group strongly felt that there is a demand to make a really professional company, one that was based on really strong moralss and values. We besides wanted to make a company that truly valued people. That is how we started. The fact of the affair is that there were many such companies that started at the same clip during early '80s, nevertheless, what made us different was that we stuck it out-we realized that it was non a dash but a endurance contest and we were long distance smugglers. We went through hard times, but none of us digressed from the common vision. All of us believed that Infosys was bigger than any of us and we were willing to subordinate our self-importances and our desire to larger boats. I think that

finding to make a first company, to lodge together, willingness to maintain Infosys in front of any individual-perhaps these are the characteristic non many people and companies had to the extent we had. That 's why we were able to last the endurance contest for last 23 old ages.

Infosys Technologies is one of the few Indian companies that has changed the manner the universe looks at India.

No longer is India a land of serpent smoothies and mendicants. It is now perceived as an economic giant to think with, spliting with superb package applied scientists and ambitious enterprisers. And Infosys is an symbol of India 's information engineering glorification.

Infosys has many number ones to its name: The first Indian house to name on Nasdaq ; the first to offer stock options to its employees. . . The company crossed $ 1 billion in grosss for the first clip in 2004. TCS, nevertheless, was the first Indian IT house to exceed $ 1-bn in grosss. Infosys is an administration that inspires awe and regard, globally. On July 2, Infosys completed 25 old ages in being. This is its astonishing success narrative, illustrated by rare exposure.

The thought of Infosys was born on a forenoon in January 1981. That fatal twenty-four hours, N R Narayana Murthy and six package applied scientists sat in his flat debating how they could make a company to compose package codifications.

Six months subsequently, Infosys was registered as a private limited company on July 2, 1981. Infosys co-founder N S Raghavan 's house in Matunga, northcentral Mumbai, was its registered office. It was so known as Infosys Consultants Pvt Ltd.

What was the company 's get

downing capital?

US $ 250. Murthy borrowed $ 250 from his married woman Sudha to get down the company. The front room of Murthy 's place was Infosys ' first office, although the registered office was Raghavan 's place.

Who were Murthy 's six friends who joined custodies to establish Infosys?

Nandan Nilekani, N S Raghavan, S Gopalakrishnan, S D Shibulal, K Dinesh and Ashok Arora.

Are all of them still the establishing managers?

Murthy is presently main wise man and president while Nilekani is the main executive officer and pull offing manager. Gopalakrishnan, Shibulal and Dinesh are managers. Raghavan retired as joint pull offing manager in 2000. He is presently the president of the consultative council of the N S Raghavan Centre for Entrepreneurial Learning at the Indian Institute of Management, Bangalore. Ashok Arora worked for the company boulder clay 1988 and left after selling his portions in the so unlisted company back to the other boosters. He moved to the United States where he now works as a adviser.

'Murthy was ever broke '

'Murthy was ever broke. He ever owed me money. We used to travel for dinner and he would state, 'I do n't hold money with me, you pay my portion, will return it to you subsequently. ' For three old ages, I maintained a book of Murthy 's debts to me. No, he ne'er returned the money and I eventually tore it up after our nuptials. The sum was a small over Rs 4,000. '

-- An extract from Sudha Murthy 's reminiscences. She is the married woman of Infosys laminitis N R Narayana Murthy.

Those yearss, Murthy wanted to make something with his life, but he had

no money. Murthy was married to Sudha on February 10, 1978, while he was working with Patni Computers.

In 1981, it was Murthy 's thought to get down Infosys. Murthy had a dream, and no money. So Sudha gave him Rs 10,000, which she had saved without his cognition. Murthy and his six co-workers started Infosys in 1981.

No, it was non in Bangalore, but in Pune that Infosys set up its first office, in 1981. The house that Murthy and Sudha bought with a loan became the first Infosys office. As Murthy ran Infosys, Sudha took up a occupation as a systems analyst with the Walchand Group of Industries to back up their family.

In 1983, Infosys moved to Bangalore when it got its first client, Data Basics Corporation from the United States. The first mini computing machine arrived at Infosys in 1983. It was a Data General 32-bit MV8000. The really following twelvemonth Infosys switched from mini to chief frames with a CAMP application for a Data Basics client

A immense battle, twenty-four hours in and twenty-four hours out

When they began traveling in front with Infosys, the laminitiss -- Murthy, Nilekani, Shibulal and the others -- took a steadfast determination -- that their married womans would non be involved in the running of the company.

So after Murthy, it was Nilekani and his married woman Rohini who moved to Bangalore. But they had no house to remain. So the Nilekanis stayed with the Murthys at their Jayanagar place in Bangalore.

Rohini took attention of Murthy 's boy as Sudha helped compose package programmes for Infosys. There was no luxury, merely battle, twenty-four hours and dark. They had no auto,

no phone. Murthy subsequently recalled that it was non the luxuries of life, but the passion to make something new and advanced that made them maintain traveling on and on and on. Despite the battles, the Murthys, the Nilekanis and the other spouses took clip out for field daies in Bangalore

The crisis, and how Infosys began to turn

The first old ages of Infosys were non smooth. Most of the laminitiss -- Murthy, Nilekani, Dinesh, Shibulal and Gopalkrishnan -- were into composing codifications. And they wanted to do an impact in the American market.

So Infosys got its first joint venture spouses in Kurt Salmon Associates. Gopalakrishnan, who had spent clip working in the United States, was the public face of the KSA-Infosys venture in America. But the joint venture collapsed in 1989, go forthing Infosys in the stumble.

Gopalakrishnan relives the memories of those yearss. `` We had nil after eight old ages of seeking to convey up a company. Those who studied with us had autos and houses, '' he says.

The prostration of the KSA joint venture led Infosys to its first crisis. The company was on the brink of prostration. One of the founder-partners -- Ashok Arora -- was dejected with the manner the company was traveling, and decided to discontinue.

The others did non cognize what to make. But Murthy had the bravery of strong belief. 'If you all want to go forth, you can. But I am traveling to lodge ( with it ) and do it, ' Murthy told them.

The other spouses -- Nilekani, Gopalakrishnan, Shibulal, Dinesh and Raghavan -- decided to remain. And therefore began to shoot the seeds of Infosys '

tremendous growing.

The Nasdaq listing

It is said that Infosys began acquiring large discoveries from the US market.

How? The initial raid of Infosys into the US market was through a company called Data Basics Corp as a 'body-shop ' or on-site developer of package for US clients. Later, Infosys formed a joint venture with Kurt Salmon Associates to manage selling in the United States.

Even today, Infosys derives about two-thirds of its gross from the United States, functioning corporate clients like Reebok, Visa, Boeing, Cisco Systems, Nordstrom and New York Life.

Infosys is the largest publically traded IT services exporter in India, supplying services to 315 big corporations, such as GE and Nortel, preponderantly in the USA.

It was the first Indian company to name on the Nasdaq stock exchange in 1999.

And the other Infosys group companies?

Progeon Ltd: The Infosys BPO arm.

Infosys Technologies ( Shanghai ) Company Limited: The company 's base in China.

Infosys Australia Pty Ltd: Infosys ' Australian venture.

Infosys Consulting Inc: The company 's raid into the confer withing concern.

25 old ages absolute finding, and growing

In the last 25 old ages, Infosys has been turning and turning.

Today, Infosys is India 's 2nd largest package exporter. It now enjoys a strong liquidness place with over Rs 6,000 crore ( Rs 60 billion ) in assets, including excess hard currency.

During 2005-2006, the Infosys internal hard currency accumulations more adequately covered working capital demands, capital outgo and dividend payments go forthing a excess of Rs 1,612 crore ( Rs 16.12 billion ) .

As on March 2006, the company had liquid assets including investings in liquid common financess of Rs 4,463 crore ( Rs 44.63 billion ) . This collectively makes the

liquidity strength of Infosys at Rs 6,078 crore ( Rs 60.78 billion ) .

Where are these financess parked?

These financess have been deposited with Bankss, extremely rated fiscal establishments and in liquid common financess. Infosys last twelvemonth derived an mean output of 4.48 per cent ( revenue enhancement loose ) from these investings.

The company received Rs 647 crore ( Rs 6.47 billion ) on exercising of stock options by employees and hard currency equivalents including liquid common financess increased by Rs 1,612 crore during 2005-06.

Key mileposts

Year of Incorporation:

1981

Become a populace limited company in India:

1992

ISO 9001/TickIT Certification:

1993

Attained SEI-CMM Level 4:

1997

Listed on National association of securities dealers automated quotations:

1999

Crossed $ 100 million in one-year grosss:

1999

Attained SEI-CMM Level 5:

1999

Crossed $ 400 million in grosss:

2001

Crossed $ half a billion in grosss:

2002

Crossed $ billion in grosss:

2004

Crossed $ 2 billion in grosss:

2006

Another Note on infosys

INFOSYS CASE STUDY - i??Narayana Murthy and Infosys '

The instance survey i??Narayana Murthy and Infosys ' describes how Narayana Murthy, set up India 's taking package company - Infosys. Narayana Murthy turned a little package development venture that he had set up with his friends in 1981, into one of the taking companies of the state. Infosys grew quickly throughout the 1990s Narayana Murthy distributed the company 's net incomes among the employees through a stock-option plan, and adopted the best corporate administration patterns. All this earned him congratulations and regard. In 1999, the company became the first Indian house to be listed on the Nasdaq Stock Market. In 2000, Infosys was poised to go a true planetary company.By 2000, Infosys ' market capitalisation reached Rs.11 billion and by 2001, Infosys was one of the biggest exporters of

package from India. Narayana Murthy had built an organisation that was respected across the state, with really strong systems, high ethical values and a nurturing working atmosphere.In February 2001, Infosys Technologies Ltd. ( Infosys ) was voted as the Best Managed Company in Asia in the Information Technology sector, in taking fiscal magazine Euromoney 's Fifth Annual Survey of Best Managed Companies in Asia.

KEY SUCCESS FACTORS

With his sound direction accomplishments, Narayana Murthy seemed to hold taken Infosys to the pinnacle of success with the following cardinal success factors:

1. Leadership squad: The leading squad needs to equilibrate vision with practical experience. In most instances, a engineering start-up will hold a airy and/or a proficient mastermind ( most frequently, these are the laminitiss ) in topographic point from twenty-four hours one. However, all to frequently, the leading squad is non rounded out by people who really know how to run a concern and how to drive gross revenues. Constructing a strong balanced squad can be one of the trickier facets of making a successful start-up because it needfully requires the airy and the proficient mastermind ( laminitiss ) to acknowledge their practical defects and give up some of the control of the concern. The thought behind a start-up is frequently person 's `` babe '' and, rather of course, they want to command every facet of its development. Once you move these people off from micromanaging the concern, the start-up Begins to hold a opportunity.

2. Well-conceived concern program: This is an country where the practical experience of a all-around leading squad gives the start-up a leg up. The concern program needs to be practical and elaborate. The

concern program provides the design for the growing of the company. Possibly more significantly, the concern program is how you demonstrate the viability of the concern to third party investors.

3. A strong merchandise: It is a given that the merchandise needs to be particular i?? something that will distinguish itself from the existence of viing merchandises - but there are other of import factors. Ideally, the merchandise will be one that can be protected by patent. If the merchandises can non be protected by a patent, so the start-up has to be positioned to capitalise on being the first to market. Absent patent protection, being the first to market and capturing every bit much market portion as you can before the copy-cats arrive is the following best thing. The merchandise needs to hold a ready market significance that there is a market for it and that either there is no existent competition or that the merchandise allows the company to distinguish itself from the competition.

4. Scalability: The scalability of the concern may non be critical to the success of every concern, but it is critical to drive a start-up to a big graduated table concern. In other words, if the end is to go a big, valuable company, scalability is cardinal. However, if the end is a small less exalted, so scalability is a small less of import.

5. Adequate capital: . Without equal capital, the concern will fight. Possibly the concern will hold phenomenal gross revenues, but be unable to present the merchandise. Or, the concern may construct the merchandise, but lack the hard currency to adequately market it. Or the concern will be unable

to pull the leading squad it needs and the squad it has is diluted to ineffectiveness. Or, the concern is unable to capitalise on its `` first-to-market '' position. While it is true that the direction squad for a start-up has to be various and willing to have on different chapeaus, a capital-starved start-up can coerce the dilution of the direction squad to the point of everything being done ill. Quite evidently, in many instances, the luxury of holding equal capital does non be from twenty-four hours one. Finding the capital in a timely manner can be really hard. The more that can be done to turn to the other four points, the easier it will be to happen capital.

Launch of Infosys

Narayana Murthy obtained his Bachelor 's grade in Electrical Engineering from University of Mysore in 1967 and his Maestro 's grade in Technology from Indian Institute of Technology, Kanpur in 1969. He started his calling as caput of the computing machine Centre at IIM, Ahmedabad.In 1972, he went to Paris where he was portion of the squad that designed a 400-terminal, real-time operating system for managing air lading for Charles De Gaulle airdrome. Narayana Murthy was a leftist militant and mingled with Gallic Communists during his stay in Paris but his mentality changed while going around Europe. He believed that the lone manner to draw India out of poorness was to make more occupations, by puting up new companies.In 1975, he returned to India and joined Systems Research Institute, Pune, ( Maharashtra ) . He so headed Patni Computer Systems Pvt. Ltd. , Mumbai, ( Maharashtra ) before establishing Infosys in 1981, along with

six other professionals.

The Strategist

From the beginning, Narayana Murthy focused on the universe 's most ambitious market - the US. He had two grounds for this. First, there was no market for package in India at the clip. He believed that Indian package companies should export merchandises in which they had a competitory advantage.In 1987, Infosys entered into a joint venture with Kurt Salmon Associates ( KSA ) , a taking planetary direction consultancy house. KSA-Infosys was the first Indo-American joint venture in the US.

Peoples Management

Analysts felt that one factor which helped Infosys to turn at a faster gait than others was the low employee turnover.The turnover rate at Infosys was about 11 % as opposed to industry norm for package companies ' of over 25 % during the 1990s.Infosys ' keeping capableness was a map both of its strict choice processs every bit good as proactive HRD patterns. About 80 % of the center and senior degree executives were promoted from within the organisation...

Corporate Governance and Infosys

Analysts felt that Infosys became one of the most well-thought-of companies in India, through its corporate administration patterns, which were better than those of many other companies in India. Narayana Murthy 's move to adhere to the best planetary patterns was driven by his vision to go a planetary participant. Infosys adopted the rigorous US Generally Accepted Accounting Practices ( GAAP ) many old ages before other companies in India did...

Leaderships in the Devising

Narayana Murthy set up a Leadership Institute in Mysore, India, to pull off the future growing of Infosys. The institute aimed at fixing Infosys employees to confront the complexnesss of a quickly altering market place and

to convey about a alteration in work civilization by transfusing leading qualities.

I would wish to stop with a remark from Sri Narayana Murthy: He said, i??It is our vision at Infosys, to make first leaders who will be at the head of concern and engineering in today 's competitory market place...

This has been at the head of their corporate civilization! ! !

2. Company Profile

Infosys Technologies Ltd. provides consulting and IT services to clients worldwide. Founded in 1981, the corporate central offices are based in Bangalore, India. However, Infosys offices span the Earth. Since incorporation, one-year gross has quickly increased and it reached $ 500 billion in 2002. Unlike many other Indian IT companies, Infosys has concentrated on edifice applications and this has contributed to its planetary success. Infosys Technologies employs about 17,000 people worldwide, about 10,000 of whom are package professionals. 116 new clients in the fiscal twelvemonth ( FY ) 2002 added to the already esteemed list that includes Airbus, Cisco, Nordstrom and Boeing. Retail banking services account for around 4 % of entire gross. The company vision is to be the best globally, commercially and ethically. As such, Infosys has developed a C-Life rule of nucleus values that it aims to honor in all facets of its concern behavior.