CHENNAI: In the wake of a public spat between Infosys Ltd.’s board and founders over the issue of governance, analysts and industry peers alike want the company to quickly put in place an internal ecosystem that enables it to safely negotiate the challenges posed by hyper competition in the global marketplace.
“In the hyper competitive world, where global players are focussing on automation, the IT services game has become one of value than of cost,’’ said a CEO of a U.S.-based high-end IT services provider with a huge presence in India.
“To successfully make the transition and be a global player, Infy needs to focus on how to have an internal ecosystem that has a top of the pyramid and a bottom of the pyramid,” said the chief executive, who did not wish to be identified. “One system fits all is a solution of the past.’’
Asserting that there was nothing amiss in such a system, he said a company like Infosys required one pyramid for the high-end that generated disproportionate value and another for the volume piece of the business.
Queried on the controversy over the compensation package, a top executive of an IT venture here said, “If you pay peanuts you get monkeys.’’ According to him, value perception is changing with customers. “To match the value, Infy has to have a different breed of managers and they are expensive. As far as Narayana Murthy is concerned, I think his investment fund is not keeping him busy. This is a case of being a ‘helicopter parent’,’’ the executive, who declined to be named, added.
“The founders are essentially minority shareholders, and like any other shareholders can voice their discomfort with how the company spends its money,” said Jessie Paul, a former global brand manager at Infosys. “The board and management should take their feedback in that context only.’’ She asserted that the happenings at the company were not positive for the brand. “Though the promoters have very little ownership and no role in the board, their moral standing gives them disproportionate clout,” she pointed out.
“Infosys seems to be in a transformation mode, and the credit for that should go to Mr. Sikka and his team. At least the
market commentary was quite positive and there was a renewed vigour amongst employees,” said Ms. Paul, who is the Founder and CEO of Paul Writer, a marketing advisory firm. “The IT services model that Infosys rode to success on is no longer sufficient so to expect the same returns or the same cost structure is not feasible. If anything, I would encourage them to invest more of that cash pile,’’ she added.
