Subscribe / Unsubscribe Enewsletters | Login | Register

Pencil Banner

IT outsourcing provider Infosys gets facelift with new CEO

Stephanie Overby | June 23, 2014
Indian outsourcing provider Infosys is making some fundamental changes, starting with appointing a new CEO, to transform itself and regain its prominence in the offshore IT services industry. However, it will take more than a new CEO to transform the company.

Software executives, however, can struggle to make the transition to services. Consider Leo Apotheker's short stint at hardware and services firm HP. "While we laud the bold approach Infosys is making by putting a technology products innovator at the helm, the firm is still primarily a services business with a services culture," says Fersht.

"However which way we look at this, services is about people first. The CEO needs to understand what make millennials tick, how to develop training programs, how to keep wages low and morale high, how to develop succession plans and 'up and out' models that work, how to inject analytical and creative thinking into its staff." Sikka must make the company's front-line employees happier and stabilize the organization, agrees Reuner.

At the same time, Infosys needs to embrace increased automation. "This is more of a threat to current IT services and BPO delivery models, where advances in robotic automation software are enabling clients to reduce their already offshored services by a further 20 to 30 percent by replicating manually operated processes in robotic software solutions," says Fersht.

"As robotics become more mainstream, because of client requirements, those providers with strong ability to replace labor with robotic process automation are going to be at an advantage." Last year, Infosys struck a revenue-sharing partnership with robotic automation provider IPSoft, an indication that it recognizes that need to accelerate its automation option, says Reuner.

Time Will Tell if New CEO Will be Capable of Transformational Change
Sikka doesn't take over until August. So it's too soon to say whether the new CEO will be capable of making such transformational change. "Stabilizing the company is one thing," says Reuner. "Catching up with peers who put in stellar results quarter after quarter is another. Even if you fix the internal problems, you still have the competitive pressure."

While co-founder N R Narayana Murthy has officially stepped down, he could remain involved in decisions behind the scenes, which could thwart turnaround efforts, adds Renuer. "I don't see him just playing golf."

"Sikka needs to balance the realities of the present world with the one we're moving into. Infosys isn't IBM; isn't at the sheer size and scale that it can throw all its eggs into the cloud basket and take its eye off the ball with its existing business. Infosys needs to keep one foot firmly planted in the reality of today's business, while also developing for the future," says Fersht.

"Vishal needs to take a pragmatic view of the pace at which Infosys can really change and evolve," says Fersht. "Coming up with the big vision is one thing. Executing on it is another."

 

Previous Page  1  2 

Sign up for CIO Asia eNewsletters.