Infosys’ top-level departure: many challenges ahead

infosys-careersThe recent departures of Ashok Vemuri, Infosys‘ head for financial services and the Americas, and several other senior executives, provide clear evidence that change is underway — and underway fast — at what was once India’s bellwether for the IT services sector. Executive chairman NR Narayana Murthy and CEO SD Shibulal are determined to steer Infosys in a new direction. Operationally, Murthy, backed by his new recruits, is going to add more operational acumen to the running of the firm.

Ashok Vemuri
ashok-vemuriMember of the Board
Head of Americas and Global Head of Manufacturing, and Engineering Services
Ashok Vemuri Member of the Board Head of Americas and Global Head of Manufacturing, and Engineering Services

Ashok is the Global Head of Manufacturing and Engineering Services at Infosys. In this role, he is responsible for all aspects of the business including setting strategic direction, driving financial and operational excellence and providing overall leadership.

Prior to his current role, Ashok was instrumental in establishing and leading the company’s Financial Services and Insurance global industry group. Under his leadership, the group grew to be the largest business segment of the company.

Ashok joined Infosys in 1999 and has served in a number of leadership roles across the company. He is the Chairman of Infosys China, serves on the board of Infosys Public Services and is responsible for business operations in the Americas, the company’s largest region in terms of clients and revenues.

Widely recognized for his expertise in global sourcing and technology-led transformation, Ashok was selected by Business Today as one of India’s 25 Hottest Young Executives in 2008. Ashok is committed to the education of future business leaders, serving on the Board of Visitors of the Fuqua School of Management at Duke University. He was also elected to the Forum of Young Global Leaders (YGL) by the World Economic Forum (WEF) in 2009.

More resignations from the executive council (the firm’s second-highest decision-making body) are on the way. We need to see an influx of visionaries at Infosys to help create the strategic capability the company needs for the long haul. In one year this is going to be a very different company; we don’t know yet how this will ultimately play out, but I suspect Infosys will be more disciplined with its internal costs and investments and more price-competitive against the likes of TCS and Cognizant.

The only real impact from customers, so far, is some concern on executive turnover and staff attrition. Most are still waiting to see how the company will rebound over the short term. The three people added to the executive council (in August) are in non-business finance and administration functions.

New Approach

Infosys seems to have just lost its mojo over the past couple of years, which is directly linked to the changes at the top, and the need of the hour is to develop new leadership talent to take its strategy forward. In addition, many new customers are saying “Why do we need the Cadillac when a regular Chevy will do just fine?” A lot of client requirements are straightforward and easy-to service with low-cost resources. Infosys has struggled to articulate a renewed vision for the future of IT services to encourage clients to choose them over some very, very aggressive competitors.

There have, however, been some marked attempts to bolster its fortunes with a much more assertive series of communications to market. There is a clear determination to roll out new platform solutions, and a more consultative client approach that can move them up the value pyramid. I would also point out that Infosys is not doing badly — it is simply being outpaced by the Cognizant and TCS machines in a commoditising market that is slowly losing steam.

The leadership at Infosys today has several challenges ahead. This includes globalising the Infosys business to be less India-centric (94% of the current workforce is still based here), increasing the consultative capabilities of the firm to be more of a transformative player, and less of an IT development shop, and expand more aggressively into large enterprises based in the European and Latin (non-English speaking) countries. We are also seeing increased progress with the firm’s BPO investments. Becoming the “Indian Accenture” is clearly a determined goal, and this involves bringing in new blood to effect this change more aggressively.

We see Infosys ahead of its India-centric competitors, in shifting away from this over-dependence on the legacy outsourcing model. Both Cognizant and TCS are outpacing the Indian-centric IT services market. And both are very different firms — Cognizant is sales and pricing focused, TCS very solutions focused. Everyone wants to grow exponentially at over 20% a year without having to make radical changes to their business models. (Source:ET)

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