Reference no: EM131478053
Infosys Threats
Employee Retention â âvital and most valuable assetsâ Itâs been headache for Infosys to retain its skilled staff in US because often these employees came to US on non-immigrant visa were re-hired by US based companies like Accenture, IBM and McKinsey (Changing H1B status from one employer to another can be done in one day). This constraint company to provide better services to clients and often company has relay on headquarters for their service deliveries.
Indian Smaller Start Firms with US venture capital funding â Infosys is a traditional outsourcing and consultancy company offer routine services like application development and IT infrastructure management, but these start-ups are focusing on newer areas like cloud computing, mobile technology and 3D images to the personalization of search and product recommendations (3DiPSPR) which Infosys lack behind with rapid changes in IT industry. Often these small startups funded by US venture capital funds enjoy adequate funding with cutting edge technology. US retailer Target working with 5 Indian start-ups on different areas ranging from automaton to 3DiPSPR.
Direct investment in India â India is now seeing a boom in investment with a large number of funding to run US based operations. Facebook recently bought Bangalore-based Little Eye Labs for 300 million US Dollars, company builds performance analysis and monitoring tools for mobile android apps. Other US companies like Accel partners, Lightspeed venture, Charles River and Sequoia Capital invest $ 623 million on different Indian companies.
Fierce Competition in US and Home - Infosys focused on financial services, healthcare, telecom and entertainment industries. Competition is often fierce in these sector between McKinsey, IBM and Tata. Infosys has been struggling to maintain its competitive advantage on price and services. Infosys hasnât award single federal contract yet because Infosys UD division deemed as overseas company and US government favor US based companies for their contracts. Recently company lost $ 100 million ISGN (mortgage services) contract to unknown Indian company KK Birla group.
Automation & Artificial intelligence â Infosys is not exempted from automation because automation make more and more manual tasks are possible to be done automatically. IT administration, business process operations like IT support and IT service desk easily can be turn into automation.
Issues and Importance
Employee Retention
The company has rolled out two major initiatives aimed at employee engagement and retention, which, is core value of the business model. The first of the two initiatives is the recently announced restricted stock offerings to employees across various levels.
âThe restricted employee stocks are being offered with a vesting period of four yearsâ, per company spoke person Richard Lobo.
âSecondly, we also have a robust ârewards for performanceâ plan in place. We are now looking at differentiating rewards based on performanceâ, he adds.
The reward strategy and the stock options are both significant measures to retain talent and keep them motivated, not just for the coming quarters but for years to come.
Handling Startups mushrooms
In order to handle startups issues company rewriting DNA of Infosys by introduced Design Thinking - a way of problem finding and solving based on imagining a better end result. Perhaps, an example could be, should one solve for a better car, or for better transportation. Tesla versus Uber? Or Uber using Teslaâs cars, or Uber using Teslaâs cars with self-driving and self-learning software?
Some 90,000 Infosys staff have already done âat the minimumâ the basic one-day Design Thinking training the company offers them. And over the last 16 months, 18,500 project managers and project-manager equivalents were mandated to come up with at least one innovation in each of their spheres of influence that made a difference to their customersâ businesses.
Direct Investment and Fierce Competition
Infosys created various divisions within the company to attract more contracts and investments from US private companies. Consulting, Strategy and architecture, business transformation, enterprise process and applications, digital transformation and insights and analytics are few new division created within US based divisions to handle these issues. More and more US employees were employed to handle sales, marketing and consulting to brand US division as US company. The company hired 1,500 US professionals for consulting, sales and delivery during the 2016 financial year. In addition, it will hire close to 600 Bachelors and Masters graduates from US Universities over the next twelve months. With this program, Infosys will bolster its expertise in client relationship management, consulting and technical delivery. The addition of these employees will help Infosys provide its clients local market insights, industry-leading technology expertise, and timely responsiveness to critical issues.
Automation & Artificial intelligence (Al)
Top management believe, automation and Al is inevitable. Infosys already exploring how the technology can work for the company, while many remain focused on planning their approach. What is clear, however, is that the successful use of Al and automation requires balance: employee engagement vs greater automation, changing business model vs customer satisfaction. The company focus is to harness the vast array of possible rewards while minimizing the many potential risks.
Company understood significance of the potential benefits, automation and Al adoption continues to spread more widely throughout organization and begins to touch and impact more and more employees and customers.
But ethics are significant hurdle to be addressed because Al challenge company core value âEmployees are vital and most valuable assetsâ. The key responsibility and challenges here for Infosys are to properly address ethical concern as they try to maximize the potential of Al technology, but as they seek to amplify the potential of the human workforce.
Infosys approach to Threats
Infosys has been waiting for a longtime to capitalize on the skilled immigrant restrictions. Remember, Infosys is not a US company and developed IT infrastructures to do most of the work in India. This restriction gave great opportunity for the company to charge premium prices on their services while keeping cost to minimum. Now competitors like IBM, Accenture, Mckinsey has to pay salary of $130,000 (minimum) for overseas worker to do the same job, which effect the competitive pricing on the market. The recent restrictions by US government has created a skilled vacuum for US companies because these overseas workers come with unique skillsets and work as clan (team is inferior word in their terminology). Now US companies must hire 2 or 3 local employees to replace overseas worker, who worked 12 hours a day and 80 hoursâ week. In order to avoid this situation Infosys and its competitors are moving their operations to their existing nearshores locations like Canada and Mexico. This week Infosys start negotiation with AirIndia, an air carrier to remobilize its IT army to move around the world for their overseas operations.
US diplomatic ties with India is always been tit for tat. New approach by US government to limit skilled immigrants create new hurdles for US companies to do business operations in India, South Korea and China.