Page 89 - DMGT520_ORGANIZATION_CHANGE_AND_DEVELOPMENT

Organization Change and Development

Notes
Before we elucidate on the happenings of 9/11, and its aftermath on the business
environment of Gold Smith it is quite essential to note following points:
 IT industry in ’99 was full of IT meat shops (Vendors like Infosys, Wipro, Satyam,
etc.,) and their top lines were rocketing.
 No vendor of international repute was present at that point of time in the domain of
IT consulting.
 Application services development was being heralded as next big thing and body
shopping was on its way out.
 Large pure play technologies firms (Lucent, Nortel) were moving their ODCs to
India in a big way.
Despite such indicators, which discouraged IT companies to diversify into IT consulting,
Gold Smith’s founder’s visioned enterprise management as organisation core competency.

Things are rosy and growth looks inevitable…
Around January 2001, Gold Smith was running full steam ahead with e-Business
Implementation work in the U.S. and India. Work was flowing in nicely and the leadership
team was busy in building infrastructure and channeling organisational value clarification.
The company had exceeded its fiscal target handsomely and the thinking was clear that the
next year the numbers would be doubled.
But there was also a realization that it was also a time to rethink the offerings on the
enterprise side of the house. Being a pure play e-business company was not going to scale.
On one hand, e-business was promising to become ubiquitous. On the other hand, as dot
coms were fizzling out, large enterprise customers were asking for a basket of competencies
and not just niche capabilities. The leadership team at Gold Smith was seeing the need not
only to expand our portfolio but also to prepare for the next round of growth and geographic
expansion. In order to make all of this happen, the time had come to think of a second
round of funding, and they set up an internal team to work on the same.
So, it was decided that the best person to spearhead the transformation from being an
e-business company in to a full-fledged enterprise solutions provider was Mr. Bagchi. So,
he returned from the US and started the process along with the charter to set up Europe
and Asia Pac.
A lot many globally recognized merchant bankers were calling on the company to offer
money as the market dynamics perceived the business and the company as belonging to
the next great investment opportunity.

Since there were a lot many merchant bankers interested in putting money in the
organisation, how to raise the capital for the next round of round of growth was not the
issue. Who to choose and how much to raise were the issues. After a long span of negotiations
and search, Gold Smith finally froze on one. It was January 200, by the time they settled on
the lead investor: The Capital Group and the co investors that included Franklin Templeton
and the first round investors.

Lawyers worked through the summer and finally the money hit the bank account in
August 2001.

Contd...

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