Becoming Truly Global Enterprise

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INFOSYS
Reinvention of Infosys: Becoming Truly Global Enterprise
Author: Praveen Gupta
• Publisher: SAGE Publications: SAGE Business Cases Originals
• Original publication date 2017
• Region:Southern Asia
• DOI:http://dx.doi.org/10.4135/9781526411341
Abstract:
June 2014 spelled an end of an era for Indian software services company Infosys Ltd.
Mr. N. R. Narayana Murthy, the 67 year old co-founder and then executive chairman
of the company announced that he along with two more co-founders S.
Gopalakrishnan and S. D.Shibulal was leaving. He felt that to take the company to
greater heights in the wake of new challenges in the information technology (IT)
industry bold moves were needed. The intent was to allow a new leader to bring the
company into the future and become a truly competitive firm. New chief executive
officer Dr. Vishal Sikka was considered more familiar with newer paradigms like big
data, cloud infrastructure, artificial intelligence and automation. As a leader, he was
expected to win bigger deals, renew core services and help Infosys to differentiate on
value rather than cost. He needed to work on transformational initiatives such as:
processes; onboarding; training; marketing; employees on bench; corporate culture;
and customer-centricity. Moreover, the clients of IT services globally were facing
extreme cost pressures due to disruptions which added pricing pressures on firms like
Infosys. The firm needed to scale up innovation and drive strategy to be globally
competitive.
Dawn of New Period
Before taking over his new assignment at Infosys, Dr. Vishal Sikka was a member of
the Executive Board and the Global Managing Board of SAP AG, the Germany based
information technology (IT) company. He had contributed significantly to SAP’s
innovative products and its global strategy. He was widely acknowledged for his
contribution in the ground-breaking product SAP HANA, a new in-memory database
technology, all SAP applications, cloud and other technology solutions. He was also
widely known for transforming SAP’s innovation culture and successfully co-creating
IT products along with their clients. He was tapped for the top position at SAP at one
point, but he had left SAP in May 2014 for personal reasons. During the Extraordinary
General Meeting of Infosys in June 2014, it was announced that as per design, two
founders, Narayana Murthy and Kris Gopalakrishnan, would be stepping down
voluntarily as Executive Chairman and Executive Vice Chairman on June 14, 2014.
To maintain continuity and for a smooth transition, both of them would continue on the
board till October 10, 2014 (One India, 2014).
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It was like an end of an epoch for Infosys, which had been a bellwether company for
the Indian IT services industry for over two decades. The three remaining co-founders
– Murthy, S. Gopalakrishnan and S.D. Shibulal – were leaving after 33 years with
Infosys. Sikka would be leading the 160,000 strong Infosys talent pool. Murthy as
Executive Chairman could have stayed for another four years while Gopalakrishnan
and Shibulal both had one year remaining in executive roles and another five years in
non-executive roles. But the trio decided to step down to give Sikka free rein. During
2013–2014 ten senior executives had resigned from Infosys but Murthy had expressed
that the departure of these senior executives from Infosys would be in the best
interests of the company in the long run (Sharma, 2014). President and board member
B. G. Srinivas was once tapped to take the chief executive officer (CEO) position after
Shibulal. His resignation astonished many employees and clients. Murthy asked most
unit heads to prepare an action plan and communicate effectively with clients to clear
doubts about leadership changes. After Murthy returned to Infosys in June 2013 as
Executive Chairman, Srinivas was the tenth senior executive to resign. The tremors
from such resignations were being felt throughout the organization. It had also affected
the employees’ motivation. Infosys was seeing high attrition rates of above 18 percent
at their operational level during the first quarter of 2014. This kind of attrition raised
worries among investors. Infosys shares fell around 8 percent in a single day in June
2014. Srinivas’ resignation was also seen as a blow to Murthy’s credibility as a
visionary leader. Murthy had shaped the fortune of the company from its birth in the
1980s (Sharma, 2014).
Srinivas had focused on different verticals like financial services, engineering services,
insurance, energy, manufacturing, strategic sourcing, marketing and strategic
alliances. After his departure, his portfolio was assigned to Shibulal. Srinivas was
leading the company business in most client-facing activities which was not Shibulal’s
forte, because he primarily focused on operations. By May 2014, the Infosys board
had made up their mind to install a new CEO who would be the first non-founder. The
company selection panel worked with Development Dimensions International and with
an executive research firm Egon Zehnder. The panel looked at both internal and
external candidates. As per planning, Murthy would leave his position of executive
chairman and Murthy’s son Rohan would also leave. Rohan had joined the company
only one year back as Executive Assistant to Murthy. A year after returning, though
highly respected, Narayana Murthy had not been able to resurrect the declining
fortunes of the company. Competition had been stiffer this time from firms like Tata
Consultancy Services (TCS), Wipro and Cognizant. Also Murthy’s return to Infosys in
an executive position after a gap of five years signaled that the company was running
out of ideas and leadership. It is creditable that Murthy and others did not allow ego
and personal prestige to hinder the process of leadership change (ET Bureau, 2014).
See Table 1 for the Infosys timeline.
Table 1: Infosys Timeline
1981 Infosys was established by N. R. Narayana Murthy and six engineers in Pune,
India, with an initial capital of USD 250.
1983 Relocated corporate headquarters to Bangalore, Karnataka, India.
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1994 Moved corporate headquarters to Electronic City, Bangalore. Opened
development center at Fremont.
1999 Touched revenues of US 100 million. Listed on the US NASDAQ Stock Market.
2001 Infosys revenues touched USD 400 million.
2002 Touched revenues of USD 500 million.
2003 Established subsidiaries in China and Australia.
2004 Annual Revenues touched US$ 1 billion. Infosys Consulting Inc. was initiated.
2006 Infosys celebrated 25 years of its foundation with 50,000 employees, revenue
USD $2 billion.
2007 Kris Gopalakrishnan, Chief Operating Officer, took over as Chief Executive
Officer (CEO). Nandan M. Nilekani was appointed Co-Chairman of the Board of
Directors.
2008 Infosys crossed revenues of USD 4 billion with annual net profits crossing USD
1 billion.
2011 Murthy handed over chairmanship to K. V. Kamath; S. D. Shibulal took over as
the CEO and Managing Director (MD) from Kris Gopalakrishnan; Infosys crossed USD
6 billion mark.
2013 Infosys board appointed Murthy as Executive Chairman.
Dr. Vishal Sikka took charge as the CEO and MD from S. D. Shibulal.
Changing Times for Infosys
In 1981, N. R. Narayana Murthy and six of his partners had embarked on the Infosys
journey with USD 250 initial capital. The company was applauded by all for its talent,
hardworking executives, client focus, business model, delivery excellence, leadership
and sticking to corporate governance. Infosys was the first in terms of employee stock
options, listing on the US NASDAQ Stock Market, announcing quarterly financial
results, taking measures against insider trading, and for the concept of a lead
independent director. Infosys employees worked on fabulous campuses, and they had
career growth opportunities and continuous training through the Infosys Training
Center at Mysore. At the leadership level Infosys executives had clear rules: Nandan
Nilekani was a strategist; Krish Gopalakrishnan, a technologist; Shibulal, a project
delivery specialist; Mohandas Pai, a financial expert; and Murthy the senior and a
mentor to all, provided the glue to hold the team together and crafted strategy.
However, Nandan left in 2009 to head a government of India project; Pai, a nonfounder, quit in April 2011 when he saw that a non-founder would not attain the CEO
position. In August 2011, as a matter of policy Murthy stepped down from the executive
role on the board after reaching age 60. Three founders – Ashok Arora, N. S.
Raghavan and K. Dinesh –had left Infosys at an early stage. The loss of key leaders
and many senior executives during 2009–2012 created a void. Some of key accounts
like British Telecom and Adidas were lost or reduced in revenue (Das & Kalbag, 2013).
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Infosys had grown from a seven-person start-up in 1981 to a 155,600 strong employee
base with USD 7 billion revenue by March 2013 (Table 2). It had been recognized as
India’s most admired and respected company until 2010. After 2010 the halo had
dimmed. In Business Today’s annual listing of “India’s most valuable companies”
Infosys fell from Number 2 in 2010 to Number 6 in 2012. Similarly in Business Today’s
“Best Companies to Work for” list it held the Number 2 position for three consecutive
years before 2010 but fell to a much lower rank afterwards. Not only was employees’
confidence and affection for the company waning, but clients had less praise for the
company. The period 2010–2013 saw rigid contracts with clients, positioning of high
margin pricing models, a less focused customer relationship and a struggle in
leadership. The company struggled to match the industry growth rate. TCS, the
industry leader widened the performance gap between Number 1 and Number 2. The
third-placed IT services giant in India, Cognizant, overtook Infosys in Q2 and Q3
revenues in 2012. Top leaders like Murthy and Gopalakrishnan had accepted that
Infosys had underestimated the change in business model in the wake of new
technologies. These newer services created smaller projects that changed the
revenue profile and the clients also preferred the subscription model to purchase
services on cloud. Then CEO Shibulal started “Infosys 3.0” a strategy to widen the
focus and move up the ladder of value chain. Shibulal had rolled out an ‘Infosys 3.0’
strategy, seeking high-end consulting, innovation and more “non-linear revenue” and
some clients like PepsiCo had preferred TCS over Infosys as their consultants for
more innovative projects which were focusing on analytics, and transportation
optimization systems (Das & Kalbag, 2013).
Challenges for Vishal Sikka
The founder-leaders had performed exemplary services for the company during its
inception and development phase. Once global competitiveness set in, the rules of the
game changed. The outsourcing of IT services to India came under tremendous stress
and US-born companies like Cognizant started challenging Infosys. The organization’s
culture, once the backbone of a successful enterprise, needed a break. Instead of
rigidity, there was a need to usher in a new era of openness, free exchange of thoughts
and innovation. The policy of passing the CEO baton to successive founders was not
working. The Infosys leadership institute largely focused on preparing junior and
middle management leaders; it hardly served the top leadership dilemmas. Weak
customer relationships affected the company’s performance in a tough competitive
environment. All the more the competitors were led by brilliant sales persons, for
example, M. Chandrasekaran at TCS, D’Souza at Cognizant and Vineet Nayar at HCL
Technologies. Leadership succession in Infosys was somewhat less bold
(Knowledge@ Wharton, 2014).
In 2013, Narayana Murthy returned to Infosys as Executive Chairman and his son
Rohan Murthy as Executive Assistant to the Chairman. Despite noble intentions,
Rohan Murthy’s appointment as executive assistant to the Chairman by Murthy
affected the morale of many senior employees. The non-family employees were
disappointed and started leaving. Rohan was given special tasks like measuring
individual productivity, automation in software development, mentoring of junior
employees, using online training methods to retrain people and to inculcate the
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innovation culture. However this also led to installation of software on all computer
screens of some of the units of Infosys that tracked employees’ productivity which was
measured in the number of hours one sat across the computer screen. This move was
totally disliked by most employees. It led to a great level of lack of transparency,
distrust and discontentment.
The Chairman’s office was not keen to continue with many senior people or
experienced lateral hires. Rather they wanted fresh staff from top B-schools for sales
activities but generally these new graduates refused because variable pay was either
non-existing or very low (Das, 2014); in a way, the departure of three co-founders was
a very emotional and painful moment for Infosys. By appointing a CEO from outside,
Murthy and the Infosys board showed courage, imagination and vision. They showed
their urge to transform both internally and externally. Sikka came with robust
credentials from SAP, though he lacked experience in heading sales or profit and loss
accounts on a big platform. There were imminent challenges before him like
organization structural changes, customer responsiveness, entering to newer areas,
creating a larger profit in a bigger value chain, pricing strategy, delivery and arresting
a high attrition rate. The high attrition rate was the biggest challenge for Infosys. Not
only did it reflect poorly on the human resources policies and the general work
environment, it also meant loss of talent, demotivation and a serious jolt to leadership
development objectives. The changing times required greater expectations from
clients in terms of cost-effective solutions which were more aligned to their
requirements – Infosys was falling short in terms of automation and artificial
intelligence. The Indian IT services industry traditionally worked on back end support
services which were always in the lower side of the entire IT value chain while the
greater profits were enjoyed by those companies who were good providing services
further up the value chain.
After 2011, Infosys had taken a beating in almost all areas including corporate
governance. Sikka immediately focused on three fronts, namely employees,
customers and investors. Infosys had developed few path-breaking IT products. In
fiscal year 2012–2013, Infosys grew at a rate of 6.6% against industry growth of 12%.
The company’s margins also slipped to a new low. Employees continued to feel
demotivated, disengaged and attrition reached an all-time high (Knowledge@
Wharton, 2014).
In the last few years, many senior executives had left the organization and most new
managers were not familiar with the eco-system. There was not much serious
challenge to Sikka despite him being an outsider. However the situation demanded
Sikka show extraordinary entrepreneurial leadership qualities in his early days. He had
to achieve a fine balance between continuity and change. Employee handling had to
be deft and required communication of vision with clarity. Sikka consulted with top
leadership and articulated the path to harness core competencies. An immediate
challenge was to restore employees’ confidence and to check attrition at senior and
middle management levels. He revived the position of chief operating officer which
had been discontinued in 2011. Sikka was ready to reshape and accelerate change at
Infosys. The initial change had been welcomed by Murthy, the board, employees and
markets as well: new leadership and its subsequent whiff of fresh thinking would be in
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the larger interest of the company. After Srinivas’ exit, Murthy sent an e-mail to unit
heads to prepare an action plan to overcome any kind of client resentment due to
significant changes in management. He wrote that in the end they would succeed in
earning and retaining the goodwill of their clients, employees, and investors (Sharma,
2014).
New Initiatives
In his first executive order, Vishal Sikka approved more than 5000 promotions. He also
announced incentives like latest i-phones to star performers amongst employees and
revival of E-sops schemes. On a short term basis he wanted to focus on revenue
growth and market share, forgetting margin. As his priorities, Sikka identified value
creation and investing in new branding. He planned to leverage automation and other
disruptive technologies. Value prepositions required to be reworked to help clients
grow their top line. Despite growing automation, IT outsourcing would still remain a
people oriented business. The CEO had rightly identified that he needed people who
were visionary and thought leaders. Infosys changed its focus to recruiting more senior
consultants rather than frontline workers to support expansion and growth. The
employee empowerment, team work, and team decisions were encouraged. The
decision-making habit was encouraged down to the level of client facing executives
and not kept exclusively to team leaders only. Sales people were encouraged to reskill
and to become more business-centric. He planned for buyers to be made more aware
of new innovative value prepositions like greater efficiency, faster decisions by
empowered sales teams from Infosys and to clearly differentiate it from rivals like
Cognizant, TCS and Wipro. A shift was also needed in terms of moving away from
areas that demanded more human resources, such as application development and
maintenance jobs. Sikka instead focused the company on new areas of digital
competency such as analytics, mobility and social media on the cloud platform.
Because these businesses required different talent models, stronger teams, and
investment cycles, Sikka’s software industry experience would turn out to be useful
(Overby, 2014).Bottom of Form.
Focus on Innovation and Change
For many decades, cheap labor and currency arbitrage had sustained the Indian IT
industry. Most IT services firms had indulged in hiring a cheaper workforce, spending
less on talent development and training while Sikka had an IT product background
focused on innovation and automation. When questioned about his deviation from
older practices, Sikka said, “Good things in life do not come in templates”.
In 2015 the Indian IT services industry had reached USD 118 billion and implementing
new ideas would be challenging. It could well disrupt the company’s current harmony.
Sikka shared his thoughts with 160,000 employees in January 2015, urging them to
start new habits and behavior. He asked his employees to be mindful and curious, to
speak up, learn and teach. He set a different tone in the year 2015 and announced a
cultural shift to make the company driven by innovation. Despite doubts, most analysts
had chosen to be patient with the new CEO’s policies. They were willing to give him
time before passing judgment (Alawadhi, 2014).
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To lift employee morale, Sikka unveiled several new initiatives based on recent
employee feedback. Before, employees had felt their feedback was a mere formality,
but Sikka got it exactly right by seriously acting on their ideas. The loudest cheer was
reserved for the announcement of dress code relaxation. Sikka declared that Infosys
would ‘untie the knot’, shelving the compulsory tie as part of dress code. All levels of
employees gained internet access at the work place, a benefit that had been restricted
earlier to a few, based on project requirements. Infosys’ intranet facility was made
accessible through all personal mobiles and tablets. The CEO resolved to make
internal processes simpler. He decided to employ those ‘Infoscians’ who had left in the
last few years for different reasons but were still connected with the company. He
emphasized reskilling employees, encouraging innovation, a customer-centric
approach and the need for training employees at the company’s Mysore training
facility.
In the third quarter of fiscal year 15, Infosys saw 13 percent growth in its net profit at
USD 500 million over the same period the year before. Revenue stood at USD 2122.4
million, registering a growth of around 5.9 percent over historical. Sikka expressed
satisfaction over his ‘renew and new’ strategy and he felt that it was well received by
clients and by the industry. Fifty-nine new clients were added to the Infosys kitty.
During the third quarter of fiscal year 15, 13,150 new employees were added to the
company, bringing total employee strength to 170,000 employees by December 31,
2015. There was a slightly adverse impact due to 1.8 percent dollar appreciation
against most major currencies during the third quarter. The company’s volume grew
by 4.2 percent in the third quarter over the previous quarter while operating margins
stood at 26.7 percent (Chandran, 2015). Infosys released a 100 percent variable
payout to all its employees for the third quarter of fiscal year 15, which was a repeat
of the second quarter of fiscal year 15 announcements. The Innovation Fund was
expanded from the current USD 100 million to USD 500 million to launch start-ups and
partnerships globally with ventures centered on India- (Alawadhi, 2014).
Shift from Infosys 3.0
Many experts felt Infosys had failed to catch up with the wider IT industry globally.
Before Sikka, there had been slow transformation. Infosys planned 3.0 strategies
where the company would not merely provide software solutions, but also would also
focus on transformational projects. Along with the IT services it would also work with
the business side of clients. The company would also work several new solutions
based on market needs like cloud computing, enterprise mobility, and sustainability. It
had currently four verticals, that is, Financial Services and Insurance, Manufacturing,
Energy, Utilities, Communications and Services, and Retail, Logistics and Life
Science. For specific clients like the USA’s public service work, Infosys had
segmented its offerings into Business Transformation, Business Operations and
Business Innovation (CNBC Money Control, 2013).
After Sikka took over as CEO in August 2014, more than 10 senior executives from
the German software company SAP had been invited to join the Infosys ranks. The
objective was to transform Infosys into a next generation IT services company. Sikka
was reaching out to his former colleagues because it would help him in his strategy of
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‘new and renew’ where Infosys would be engaged in newer technologies like
automation and artificial intelligence which had hitherto been unheard of in the
company (Sood, 2015).
Challenges Ahead
In the beginning, Vishal Sikka expressed disappointment with the Indian IT services
industry because cheaper labor and currency arbitrage had been the only unique
selling propositions for several decades. He argued that the industry had over-utilized
the idea of cost focus through hiring mediocre people faster, training people less and
assigning them on the job faster. He expressed that the changes he would like to bring
might disrupt the company’s current harmony and could be risky as well. He urged
employees to develop curiosity, to ask questions, to challenge the norms and always
review the prevailing practices. The biggest challenge for him would be to bring about
a cultural shift amongst the employees and to transform them culturally and
operationally into a new avatar driven by innovation, delivering value to clients through
innovative services. This could be achieved only through a mindset change (Sharma,
2015).
The financial position of Infosys started showing impact from Sikka’s strategic efforts
(Table 3, Table 4 and Table 5) for the fiscal year 2015–2016 when Infosys announced
pay hikes. The raises were in the range of 6.5 percent to 9 percent to all employees in
India and 2 percent for employees outside India. The company also announced a few
steps including offering a 100 percent variable bonus payout for the third quarter
ending December 2014 to stem high attrition. Vishal Sikka announced the 9 percent
salary hike would go to top performers at Infosys while the average raise would be 6.5
percent (First Post, 2015).
Future Expansion through Acquisitions
Before 2014 Infosys engaged with clients in providing a set of people with only specific
skills, at a particular cost and within a certain time frame. There was much less
flexibility and a lack of customer-centricity. This approach could not go on forever.
Sikka envisioned stopping this process immediately to lift morale and performance.
Sikka emphasized newer areas of digital competency including analytics, mobility and
social media that can be delivered to clients on cloud platforms. He aimed to introduce
new products like artificial intelligence, automation and the “internet of things” as one
solution, but the company had to introduce innovative practices in every field. He urged
his colleagues to focus innovation to create more value for clients. He declared he had
no plans to acquire yesterday’s technology and pad revenue. He sought to acquire
companies that could help Infosys in automation, and artificial intelligence to help
revitalize services to improve productivity. An IT product company was also on his
radar but that would be amalgamated in their IT service model. Currently more than
40 percent of 22,000 Infosys projects were fixed price and not based on outcome.
Sikka wanted his company to grow revenue and profitability by ensuring that Infosys
moves up the value chain and focuses more on product and outcome based projects
which ultimately help clients in improving their revenues and profits. This strategy
would also give Infosys long-term competitive advantage in face of competition (The
Hindu, 2015).
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Giving Global Outlook
Within the first couple of months of assuming the role of CEO, Sikka helped Infosys
break away from the old mold. Infosys was no longer considered a conservative Indian
company but truly a global company undergoing metamorphosis in its selection of
teams, client engagement, and dealings with other stakeholders. New colleagues were
added from SAP, not only because they were close to Sikka at SAP but to transform
Infosys into a next-generation services player where products, platforms and new
technologies might be pivotal. Sikka was consistent in his approach. Sikka broke from
old practices and held his first board meeting at Chennai instead of Bengaluru. He
plans to hold the meeting at other major centers of Infosys like Pune and Hyderabad
in future. Infosys had sprawling campuses in each of those cities and the move was
to motivate employees in those places as well. Sikka was leaving his stamp on
organizational and strategic matters. He had encouraged top leadership to constantly
stay connected with co-workers through initiatives like ‘murmuration’, and crowd
sourcing of innovative ideas. Here the new CEO encouraged the 160,000 workforce
to share new ideas that could lead to process improvement, product development, and
client service improvements. Keeping the workforce together, keeping them motivated
and checking attrition rates were some of the objectives of this initiative (Rediff.com,
2015).
Sikka identified new challenges in terms of digitizing physical spaces at the front-end.
Infosys had achieved back-end digitization but Sikka believed that digital should be
ubiquitous and all pervasive. If a Mercedes S Class 2014 could be a great example of
digitized interiors with so many product features being controlled by digitized
technologies, then Infosys was aiming the same direction in retail stores, bank
branches or hospitals. Infosys should be in a position to provide greater solutions to
clients like retail stores, banks or hospitals through extensive research and
development. The future lies in more than just providing basic software and IT
solutions. Thus ‘Infoscions’ must focus on design thinking processes which would have
applications in customer problems. Over 12,300 ‘Infoscions’ had undergone training in
design thinking, after Sikka took over (Chengappa, 2015).
In April 2015, Vishal Sikka had started personally supervising approximately 12,000
client outsourcing projects, in order to strengthen relationships with top outsourcing
clients such as Bank of America to ensure that Infosys could generate more revenue.
Earlier he had started monitoring more than 1000 project managers across markets
and spoke to them on issues like how Infosys could design and deliver greater value
to clients. In particular, Sikka wanted to improve revenue from key accounts. He was
trying to inculcate a culture of raising value of projects by thinking in terms of solving
complex problems. He also wanted to introduce cultural shift from doing what was told
to delivering more innovative solutions (Sen, 2015).
Sikka wanted to pursue his aim of having one-fourth of the company’s top leadership
positions held by women by the year 2020. Infosys did not have a legacy of having
many women leaders at the top despite having about 35 percent women at the
executive level. The inclusion of Dr. Kiran Mazumdar Shaw, Roopa Kudva and Dr.
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Punita Kumar Sinha as independent directors at the Board exemplifies that intention
(The Economic Times, 2015).
The CEO announced a major shift in strategy for its core banking product – Finacle.
Until recently, Infosys management was exploring selling off Finacle. Finacle revenues
had dropped from USD 341 million in 2012 to USD 297 million in 2014 because of
poor demand for next-generation banking solutions. Infosys had built 90 percent of its
customer and revenue base from Asia Pacific, Middle East, Latin America and few
nations in Europe; it was not focused on the US market. Sikka showed his intent to
include the insurance sector along with banking and to make it reach the US market
where there was demand for replacing core banking systems. The leadership change
at Infosys had the potential to increase Finacle’s relevance (Sood, 2014).
Infosys planned a fresh brand identity for the company. A few years ago Infosys was
able to command 15–20 percent premium from clients but of late many clients refused
to pay premium pricing. It was essential to rework client relationships. With 90 percent
of the company’s business coming from foreign markets like the US, Sikka started
devoting time to communicating his ideas and vision. Brand essence has to be sold
inside the company before the employees could sell it outside. From USD 400 million
in the year 1999, Infosys’ brand value had risen to USD 9 billion in the year 2011. But
then there had been significant changes in the industry. Cognizant was half the size
of Infosys in 2007 but had outpaced it in the next few years. TCS had widened the
revenue gap and bridged the profit gap between itself and Infosys. A brand is more
than a logo; rather it is the customer relationship. So brand Infosys was rethinking its
branding strategy and was reworking its relationship with clients (Mishra & Jayadevan
2015). Infosys should remain ahead of the curve vis-à-vis the competition. The client
facing employees and teams should be empowered for decision-making. The
company should develop path breaking solutions to clients; the sole objective being to
help clients stay ahead of the curve in their competitive domain.
In 2015–2016, Infosys initiated innovative projects like ‘Zero Distance’ which was an
extension of Design Thinking and promised to their clients a saving of more than USD
1 billion a year. Under this project, thousands of employees had to initiate more
efficient ways to complete a project or offer new solutions in more than 90% of 8500
projects under process. More than 70,000 of ‘Infoscians’ had undergone day-long
design thinking classes. They had to develop into proactive and innovative employees
and support their clients. The objectives announced for zero distance projects were to
achieve cost saving and greater efficiency at clients’ place. Infosys achieved revenue
of USD 7.02 billion in the first 9 months of fiscal year 15 and was rightly placed to
become a USD 20 billion next generation services firm (Live Mint, 2015).
CEO Vishal Sikka had announced five priorities to propel Infosys performance and
drive innovation in fiscal year 16 and fiscal year 17. These priorities were: ‘scale up
innovation engine by introducing new products and platforms’; ‘achieving greater
revenue per employee’; ‘ achieving zero-bench’; ‘focus on BPO [business process
outsourcing] and Edgeserve’; and ‘change in continuous education curriculum at
Infosys’ (Thimmaya & Darlington, 2016).
Conclusion
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In the long term, an organization sustains and performs on the basis of the quality of
top leadership, management skills, vision, strategies and their execution. Murthy and
his founder colleagues had nurtured Infosys as a fledgling organization and saw
through its successful journey to a mature organization. However, over a period certain
things are to be unlearnt while other aspects are to be relearnt. In fact it is a wonderful
experience in corporate leadership how much and what is to be unlearnt. The passing
of the baton to Dr. Vishal Sikka has been a bold and a visionary decision on the part
of the outgoing leadership. It is not an easy task to hand over the reins of an
organization after undergoing all the birth prangs and seeing it through to achieving
maturity. For Murthy and his top level team Infosys was a lifelong endeavor. Sikka had
ushered fresh thinking into the working style, through process changes and
introduction of long term objectives. It remains to be seen how successfully he
balances out the past, present and future of Infosys. This in fact is the foundation of
most business organizations who aspire to be sustainable over the long term.

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