Infosys gears up for major rejig

According to the many sources FE spoke to regarding the rejig in the current management structure,the Bangalore-headquartered IT firm is critically evaluating performances of those holding senior positions or heading large business verticals.

Under Murthy,performers are being rewarded while the laggards are being sidelined, said an individual aware of the developments.

Infosys,which had lost a bit of sync with its customers due to slower decision-making,is bringing in a more robust structure that will give more autonomy,especially to the companys front-end sales staff. In the past,the IT major followed a very centralised leadership structure,which saw it losing business to rivals such as TCS and Cognizant.

Murthys big focus at Infosys has been on its traditional line of business application development and maintenance,BPO,testing and infrastructure management. Sources said that the chairman has been interacting very closely with customers and the expectation is that he could swing some large deals shortly.

These developments could also result in certain reshuffling of portfolios once again. Board members and senior executives like Ashok Vemuri and BG Srinivas are expected to play significantly different roles with one of them assuming a market-facing function and the other responsible for delivery.

It is likely that Infosys would also be looking at bringing back the role of chief operating officer COO,which was dismantled after SD Shibulal became the CEO. However,the debate is still on as to whether the company should go for an external candidate as CEO or pick someone internally after Shibulals term ends in 2015.

V Balakrishnan,the former CFO of the company,is expected to shoulder more responsibility,which will include managing customer relations as well as overseeing the critical finance department.

Internally,Infosys has seen management transformation in the last two years,including reshuffle of top executives.

In a key move last month,Infosys appointed Balakrishnan as the new chairman of its European subsidiary Infosys Lodestone,the Switzerland-based management consultancy firm it had acquired last year. Balakrishnan replaced fellow board member BG Srinivas,who currently heads the companys Europe and financial services and insurance verticals.

The majority of the brokerage houses are eagerly awaiting to hear about the new strategic direction to be undertaken by Murthy.

We expect Infosys to maintain its FY14 outlook but share more details on what changes NRN Murthy would bring to business strategy and execution, IDFC Securities said in its report.

Earlier this year,the IT-services major also announced leadership role changes for two of its top officials Nandita Gurjar and Srikantan Moorthy. Gurjar took over as the head of the companys education and research department,while Moorthy took on Gurjars HR portfolio.

Industry experts point out that the biggest challenge for Infosys currently to get its front engine sales and marketing roaring back to life. Its sales team appeared rudderless over the last four to six quarters.

Infosys,which announces its first-quarter earnings for the current fiscal on Friday,saw its global sales and marketing head Basab Pradhan resigning from the organisation earlier this week to start his own venture.

FE last month reported that Murthy has started to woo back some of the senior-level employees who left the organisation in the recent past to join rival firms. Since taking charge of the companys operations,Murthy has begun reaching out to former employees,particularly those involved with the sales function.

Brokerage house CLSA in a recent note said,Murthys return would definitely bring back the operational and review rigour which has been definitely missing during the current CEOs tenure and has resulted in a unidirectional slide in margins and a continuous miss on the companys own financial guidance. Seen in conjunction with the recent raise in base salary of employees across the board,Murthys comeback should also raise employee morale and revitalise the company.

Infosys performance over the last two years never really matched with the peers or industry. Analysts feel that in an economic environment where the business momentum is slowing down,Infosys is unlikely to see any quick reversal in its fortunes. The company is now in the process of addressing many of the internal issues after Murthys come back.