Infosys 3.0

When Vishal Sikka was appointed to the Infosys top job, it was broadly referred to as Infosys 2.0. The company had ruled the Indian IT scene for over 30 years riding on the back of the big IT outsourcing boom. That was passé. Global IT spending was increasingly tilting towards the digital space and the focus was shifting from BFSI to SMAC. Here SMAC referred to the heady combination of Social media, Mobility, Analytics and Cloud. So what exactly will be Infosys 3.0?

A good choice for CEO

The decision to appoint Salil Parekh as the next CEO of Infosys was met with a lot of appreciation. During his two decade long stint with global consulting major, Cap Gemini, Salil had literally turned around the India business. With top-end IT consulting experience, a grand shop-floor experience of managing complex IT projects and a customer oriented approach, Salil Parekh was the right man for the right job. The choice of Salil Parekh was not just about academic or professional credentials. That is something Parekh had in plenty, anyways. Above all, Parekh is seen as the typical consensus man, the perfect choice in the current scenario for Infosys. Unlike Sikka, Parekh is known to push disruptive changes in the organization without overly disturbing the existing structure. That should surely hold Parekh in good stead as he takes on the job!

Where is the line of control?

While Pravin Rao will go back to playing the role of the COO, there will be the larger-than-life presence of Nandan Nilekani in the day-to-day affairs of Infosys. It is not too clear whether Nilekani will now cede his role in Infosys and move on. Considering the past experience with Vishal Sikka, Infosys may opt to continue Nilekani in his current role for some time. That is going to be a big challenge for Parekh as the lines of control are likely to become extremely blurred with both of them operating simultaneously. That could be a potentially risky situation which could result in duality of control within the organization, something that is best avoided in these delicate times.

What about the promoter group?

The bigger question will be 3-fold. Firstly, what will be the constitution of the new board of directors? Secondly, what role will the founding promoters play in terms of enforcing corporate governance? Lastly, what is the institutional mechanism for resolving any differences between the promoter group and the board? That is what most of the institutional investors will be interested in. As Infosys gets ready for a new CEO, business expansion will not be the main worry. Primarily, it needs to address how the Infosys board and the promoter group will interface. That will be the key to Infosys 3.0! ©

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