IT cos may do away with COO position
Rejigging organisational structure with less top-heavy model to drive future growth
- Established IT cos facing competition from technology startups
- Sustaining high revenue growth requires agile organisational model
- For instance, Infosys may do away with the COO as Pravin Rao set to retire
- Role of COO has been derived from manufacturing sector
- COO role might not be required for new age startups
- TCS also simplified its organisation structure
Bengaluru: Indian IT services firms are increasingly opting for simple organisational structure with less top-heavy model to drive their future growth.
Established IT companies are facing rising competition from technology startups in recent years.
Also, sustaining high revenue growth requires agile organisational model amid Covid-related disruption.
Sources in the know said that Infosys' move to do away with the Chief Operations Officer (COO) role is a move in that direction.
"The role of COO in technology industry has been derived from manufacturing sector. In some of the new age startups, this role might not be required, but the need for this role comes up taking into account the size of the company and complexities involved in delivery and operations. Some Indian IT firms are doing away with this role as they look at simplifying the organisation structure with less people on the top," said Pareekh Jain, an IT outsourcing advisor and founder, Pareekh Consulting.
According to him, if the functional heads of different verticals can manage the operations part, COO role may not be essential.
As the current COO of Infosys UB Pravin Rao is all set to retire, the company has decided to do away with the role. According to sources in the know, the IT firm will split the responsibilities between two presidents, chief human resources officer, chief technology officer, EVPs and SVPs.
Infosys' two presidents, Ravi Kumar who also posts the role of deputy COO and Mohit Joshi along with the CFO Nilanjan Roy will be given additional role post Rao's retirement.
Not only Infosys, most large and mid-tier IT companies are simplifying their organisational structure to drive growth.
After the new CEO, Thierry Delaporte took charge at Wipro, the company has also seen organisational changes. It replaced its earlier structure of seven strategic business units service lines and nine geographies with four strategic market units and two global business lines. Due to such reorganisation, the top layer of the company has come down.
Similarly, Tata Consultancy Services have also simplified its organisation structure by creating more accountability on P&L level.
"Startups usually have linear organisation structure with less people on the top, which helps in driving innovation. As Indian IT companies face competition from startups, they are trying to emulate the structure with less people on top and more delegation. However, the success of thismodel will be known after seeing the outcome," said a Mumbai-based analyst.