Infosys Limited

Summary:

1989: The crisis, and how Infosys began to grow

Who is to be blamed for Infosys poor performance?
2013: Return of Narayan Murthy
Rohan Murthy leaves Infosys
2014: Infosys under Vishal Sikka’s leadership
Accusation of visa fraud
2009: Infosys fires 2,100 for poor performance.
 1989: The crisis, and how Infosys began to
grow
• Infosys wanted to make an impact in the American market & got its first
joint venture partners in KS Associates.
• In 1989 the collapse of the KSA joint venture led Infosys to its first crisis.
The company was on the verge of collapse.
• One of the founder-partners -- Ashok Arora -- was dejected with the way
the company was going, and decided to quit.
• Infosys was almost sold off: The company was going through a rough
phase. Many stakeholders thought that it was wise to sell it off.
• However, Narayan Murthy had other plans and in 5 hours long meeting he
convinced others to work even harder.
• In 1992, the market liberation took place and Infosys never looked back
since then.
 Who is to be blamed for Infosys' poor
performance?

• Chief operating officer S D Shibulal was promoted as CEO in

2011.
• Under Shibulal’s leadership, Infosys has not only lost to
closest peer CTS but increased the gap with larger competitor
TCS
• Sales were down, profits were down, employee morale was
low. The reason was not that the market was down; other
competitors had done well.
 Who is to be blamed for Infosys' poor
performance?
• The blame for this lost focus is often put on the company’s ‘Infosys 3.0’
strategy and its execution, which was conceptualised and closely led by
Shibulal.
• It was a strategy shift from bread and butter service provider to
emphasize on making sophisticated product for the long haul — had left
investors confused and overall revenues were on a steady decline.
• Strategy Infosys 3.0 was in the right direction. But without that
background, you can't build the next level. So, to that extent, Shibulal was
ahead of the curve.
• Almost everybody agrees that the intention was right but the timing was
bad because hardly anybody was willing to spend on massive
technological transformation which requires high-end consulting work.
 Who is to be blamed for Infosys' poor
performance?
• Additionally, the problem got aggravated when Infosys lost
focus on their core job, like BPO (business process
outsourcing) and infrastructure management services
• Shibulal’s tenure also coincided with the post-recession
period when top Fortune 500 clients had tightened their IT
budgets.
• On Glassdoor, an employee-rating website, Shibulal’s approval
rating stood at 50-60% in 2014—the lowest among CEOs.
• The basic problem of Infosys has been this leadership crisis.
• A failure of the board: One of the most important
responsibilities of any board is planning for succession—
identifying at least one leader who can immediately take up
the role if the current CEO gets hit by a bus.
 Interesting, right?
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