Yes, it's not a question mark but an exclamation mark. The reason is simple, it seems other than the few who are deciding future for the company, everybody else knows what's going wrong and what the company should do to come out of the current mess.
The world changed, the Indian outsourcing industry business model changed, client's expectations changed, everything changed but what dint change - the management theories and principals of Infosys. They did not and have still not realized that what worked in the early stage of their growth story will not kick again. The processes, software delivery execution, labour arbitrage, all this have become commodities now and clients in the west now know names of Indian IT services firms other than TCS and Infosys as well. The global giants such as IBM and Accenture have learned the services outsourcing trick too and can easily downplay smaller firms on the basis of economies of scale.
But wait, if these global problems are hurting it then it should be same for TCS, Cognizant and HCL as well, then why only Infosys is feeling the heat. Yeah, so there comes the problem of old school of management. The CEO search which became headlines now, should have been questioned right when Mr. Nandan took over from Mr. Murhty. Many of you will wonder why, as Nandan had the best run for the company under his leadership. But the bigger question here is of CEO succession planning. If I am not wrong, many of you would also agree that even if there was a test then to choose CEO, Nandan surely would have cleared the test with flying colours. And then that would have set up a clear direction for Mr. Kris and Mr. Shibulal to either learn the tricks of the game or stay out of the CEO race. As what Shibulal faced in his tenure may very well be outcome of policy decisions made during Kris CEO term. If they had already decided that all four will become CEO - come what may - then the company should not have gone public unless all four had completed their term as CEO. It is not only illogical but unethical as well for a publicly listed company to run like a privately owned one (I know Mr. Murthy considers Infy as his child, still!)
And then the stubbornness of the company to not to lower its margins though it kept loosing clients to peers (mostly HCL which grabbed maximum number of clients) in the last few years. The premium pricing which it thought it commands in the market because of brand value, was a farce. When the entire world was running through financial crisis and geographies which provide bread and butter to Indian outsourcing sector were in deep financial problems, and the clients were looking for cost-effectiveness, the company remained aggressive on pricing on the basis of its brand name solely. The peers, who already had developed delivery excellence at par with Infy, were quick to react to the changed dynamics and client expectations took on this opportunity to closed on Infy expired deals.
So, more than a fresh new CEO, perhaps the pressing need is to get out of old clutches, create a new line of dynamic leaders who read and react to the market more sharply and restore its glory back. With Nasscom predicting around 15% growth for FY14-15 for IT sector, the opportunity to bring back growth is right there, it is just the question "Does it really want to get back on the right track!!"
The world changed, the Indian outsourcing industry business model changed, client's expectations changed, everything changed but what dint change - the management theories and principals of Infosys. They did not and have still not realized that what worked in the early stage of their growth story will not kick again. The processes, software delivery execution, labour arbitrage, all this have become commodities now and clients in the west now know names of Indian IT services firms other than TCS and Infosys as well. The global giants such as IBM and Accenture have learned the services outsourcing trick too and can easily downplay smaller firms on the basis of economies of scale.
But wait, if these global problems are hurting it then it should be same for TCS, Cognizant and HCL as well, then why only Infosys is feeling the heat. Yeah, so there comes the problem of old school of management. The CEO search which became headlines now, should have been questioned right when Mr. Nandan took over from Mr. Murhty. Many of you will wonder why, as Nandan had the best run for the company under his leadership. But the bigger question here is of CEO succession planning. If I am not wrong, many of you would also agree that even if there was a test then to choose CEO, Nandan surely would have cleared the test with flying colours. And then that would have set up a clear direction for Mr. Kris and Mr. Shibulal to either learn the tricks of the game or stay out of the CEO race. As what Shibulal faced in his tenure may very well be outcome of policy decisions made during Kris CEO term. If they had already decided that all four will become CEO - come what may - then the company should not have gone public unless all four had completed their term as CEO. It is not only illogical but unethical as well for a publicly listed company to run like a privately owned one (I know Mr. Murthy considers Infy as his child, still!)
And then the stubbornness of the company to not to lower its margins though it kept loosing clients to peers (mostly HCL which grabbed maximum number of clients) in the last few years. The premium pricing which it thought it commands in the market because of brand value, was a farce. When the entire world was running through financial crisis and geographies which provide bread and butter to Indian outsourcing sector were in deep financial problems, and the clients were looking for cost-effectiveness, the company remained aggressive on pricing on the basis of its brand name solely. The peers, who already had developed delivery excellence at par with Infy, were quick to react to the changed dynamics and client expectations took on this opportunity to closed on Infy expired deals.
So, more than a fresh new CEO, perhaps the pressing need is to get out of old clutches, create a new line of dynamic leaders who read and react to the market more sharply and restore its glory back. With Nasscom predicting around 15% growth for FY14-15 for IT sector, the opportunity to bring back growth is right there, it is just the question "Does it really want to get back on the right track!!"
No comments:
Post a Comment