THE 1980s posed a unique challenge for us. Infosys, with revenues then of about Rs 5 crore, and 200 employees – was a small, relatively unknown company. And suddenly we were faced with the prospect of global competition. It was a bit scary. In this Brave New World, an IBM, a Motorola, an HP could now establish a large presence in India and recruit the best brains from any campus. Who then would come to work for this small, unknown company called Infosys? A debate raged within our company. Should we throw in the towel or should we try and walk with the giants? Our founder, NR Narayana Murthy, decided to take the plunge. We would compete with the biggest companies and create something globally competitive.
That decision dramatically changed our mindset. It also led to a calibrated management call to action. In order to reposition ourselves strategically, managerially, competitively, we undertook a sectionalized revamp aimed at improving every aspect of the company in order to launch it into the global arena – finances, infrastructure, quality control, human resources, information systems, technology implementation, global best practices, increased capitalization.
Setting up a world-class infrastructure in order to give the big boys a run for their money needed a massive infusion of new capital. There was only one way to go. Go public. We did this in February of 1993. Until June of 1992 the government – the controller of capital issues – fixed the share price of a private company embarking on a public issue. Mercifully, that system was abolished just before we went on the stock market. We, therefore, were among the first companies to do what is called market pricing, based on what we believe is a true share value rather than have a New Delhi bureaucrat decide what it should be. Fortuitously, this was also a time when global investors started coming into the Indian stock market as Foreign Institutional Investors (FIIs).
In order to build global investor confidence in Infosys we benchmarked corporate ideals to international standards in areas such as corporate governance, shareholder disclosure, balance sheet analysis. The company, we believed, should be both ethically and financially strong. Our initial goal was to take our Rs 5-crore Hindu-rate-of-growth company to at least Rs 50 crore by 1995. We beat our own target hollow. Encouraged, we set our sights even higher and set a target of $100 million by the turn of the century. We beat that target, too. The next decision was only the logical step forward. If we were to be truly global we had to be listed abroad. This not only gives a company easier access to global capital but also makes you rise to the demand of running your company according to international standards.
In order to build global investor confidence in Infosys we bench marked corporate ideals to international standards in areas such as corporate governance, shareholder disclosure, balance sheet analysis
Around 1997-end we decided to list the company in North America. Until then, Indian companies were listing in the European countries on the GDR market. No Indian company had listed on the ADR market. We became the first Indian company to list on ADR in the NASDAQ in March of 1999. We had to spend two years in making sure that the laws in India and the laws in the US made it possible for us to do so. We had to make sure the financial accounting standards in India and the US were reconciled.
We didn’t stop there. We decided to climb another mountain – a billion-dollar mountain. By 1999 our revenues had climbed to $121 million. In March 2004 – five years later – Infosys joined the billion dollar club. For me personally, and for the company, this entire period of globalization has been a learning curve. It is critical that you define high standards and high goals. Nothing less will do. Setting a target by itself is not enough. When you approach your target you have to set a new target. If you do not, you become complacent. You tend to just sit back and rest on your laurels. In this way, you fail to achieve your true potential and fail to realize what new adventures lie ahead in the exciting field of your business. Setting new targets is also the way to move your managers and workers into greater levels of challenge, creativity and motivation.
My definition of being globally competitive, therefore, is always having ambitions that are much larger than you are. But ambition must be tempered with the art of the possible. I am personally convinced that more and more Indian companies are today poised on the brink of becoming global players. In our industry we had to go global very early in the game because we did not really have a market in India for our services. Today, the $16-billion Indian IT and BPO services have a universally acknowledged global reputation.
NASCOM predicts this figure will reach about $50 billion by the end of the decade. Across the world people have accepted the quality of India’s intellectual and human capital and its massive contribution to the knowledge industry. Indian companies are rapidly learning that becoming globally competitive means creating products and bringing value to your customer, running companies in an efficient manner and making sure there is a continuous improvement cycle.
