Mumbai-based Patni Computer Systems will launch an 'entrepreneurship programme' for its employees with a target to achieve 10 per cent of revenue from new products and services in the next two years.
Under this programme, employees can work on innovative ideas, for which the firm will provide funding and help in setting up a team.
The programme is part of the company's initiative to allocate 10 per cent of their cash reserve to initiatives that are technology-led.
"This is perhaps the first time in the industry that a risk-reward model is being worked out. Later this month we will roll out the 'entrepreneurship programme'.
The idea must have a capacity to generate revenue and should also have a go-to-market model in place," said Jeya Kumar, chief executive officer, Patni Computer Systems.
Patni will fund two ideas or individuals per year. An employee can bring his/her idea to the table and once it is sanctioned, can work on it for a period of 18 months. During the 18-month period, the employee will not get the variable component pay of their salary.
"Since the employee will move out of variable pay this is a personal risk. But once the service is live, the compensation architecture changes. We do not mind paying a certain percentage of the revenue that the model will generate to the employee," added Kumar.
The company is still working on the exact details of the compensation package.
If the idea does not work-out after the stipulated period the employee can go back to their old job.
"We have talked to people who would be interested in such a scheme and have come up with the idea. We have realised that one has to balance between individual and company aspirations. This will help us coming up with new products and services," said Kumar.
As of June 30, 2010 the company's cash and cash equivalents (including short term investments) was at $466.6 million (Rs 2,179 crore).
After paying out the Rs 800 crore (Rs 8 billion) towards the special dividend that the company had announced recently at Rs 63, it is left with a cash reserve of Rs 1,379 crore (Rs 13.79 billion).
Kumar believes that innovation is the only way that will make the industry grow faster and this model will help Patni to be at the edge of innovation.
Last year, the company had announced setting up of an 'innovation lab' and had initiated a process to move its infrastructure to cloud computing platform.
"By the end of September, this year, Patni will be the first IT services firm to have moved all its infrastructure on cloud computing," said Kumar.
With this, the company expects to save 30 per cent by way of capital expenditure and 30 per cent on space when the process is complete.
