Analyzing the organizational behavioral changes required for driving non-linear initiatives in Indian IT services companies

Abstract

IT Service Providers (Indian TCS, Infosys and Wipro, and majority operations India based Cognizant) have been growing at a very fast pace in the last decade. The growth till now has been directly linked to the headcount increase and as these companies plan to grow even more (Wipro wants to be a $ 10 bn organization by 2012, Cognizant $ 12 bn by 2015) they really need to break the current growth model as the requirement of adding resources at such a pace is becoming increasingly difficult and not feasible. Also, if they do continue to grow at this pace, they need to factor in impact on management costs, margins, flexibility of the organization and per person cost. Also, with the currency fluctuations, sustainability of labor arbitrage model itself is under question. Hence all these big companies are exploring new models which would break the tight linkage between people and growth, while enabling them to achieve their stated revenue and profitability numbers. The top 20 IT companies in the world are moving to sort of competitive convergence , wherein the Indian companies are trying to move up the value chain by ramping up their business domain consulting skills, whereas the big boys of the industry (HP, IBM and CSC) have also setup operations in India and are sort of moving down the value chain, leading to asymmetric competition and also making pure labor arbitrage unattractive. In such an environment the large IT services companies (Indian or traditionally operating from India) are trying to develop a business model wherein they delink revenue growth from employee count, increase the revenue per employee by: ? Implementing strategies to move moving up the value chain Increased, increased customer focus ? Most and most importantly change in behavior at all levels (organization, vertical, horizontal, enabling functions to the lowest level employee) to ensure alignment with organization s non-linear strategy and initiatives. In this project we expect to research on how various companies are handling the organizational behavior aspects which come in to play when non-linear initiatives are pushed forward as a strategy.