Tag Archives: Infosys

‘I’ve Been the No.1 Factor in Every Step Infy Took’

Taking his last bow at the Infosys AGM on Saturday, chairman and chief mentor N R Narayana Murthy talks of his 30-year legacy and of what it means to dare to hope

 

There is an almost Jesuit sense in the way N R Narayana Murthy sees the role of luck in life. The man, who has come to personify the phenomenal success story of India Inc, has repeatedly dwelt on how turning points in life are often fortuitous events though, to make the most of it, one’s response to it is anything but.

At the 30th Annual General Meeting of Infosys on Saturday, in effect his last working day before he formally retires as chairman of the board on August 20, NRN spoke of his three-decade experience leading his company with a seed capital of $250 to one that generated a revenue of $6.1 billion in 2011, as “both exhilarating and humbling”. In his valedictory speech, he went on to speak of how his story is one of what any average person anywhere is capable of doing, but behind the aspartame phrases, one could detect the grit that made him, over the years, take the life and death decisions his co-founders often shied away from.

Twenty years ago, on a blustery Saturday afternoon not very different from the one yesterday, in a small office in a leafy lane in Bangalore, NRN, by his own account, sat without saying a word for four hours. After nine years of unremitting, often despairing, work Infosys had finally begun to make some money.  The company, defying the doomsayers, had proved that it cannot be written off, and more importantly a foreign investor was willing to shell out a million US dollars to buy it. His six co-founders – including the likes of Nandan Nilekani, Kris Gopalakrishnan and Shibulal – debating the offer in the room, to a man wanted to sell.

Then NRN spoke and he provided an entirely different perspective on the Indian economy’s liberalisation that was just kicking in, of the possibilities it afforded and of which the buy-out offer itself was a small encouraging sign. He spoke passionately but to the point, and in half an hour he had won new converts and the company has since then never looked back. He was the real progenitor of Friedman’s ‘flat world’ though the credit, at least for its conceptualisation, goes to the more articulate Nilekani. On Saturday, at the AGM, NRN, untypically, allowed a little triumphalism to creep into his speech when he pronounced, “I have always been the No 1 actor in every decision this company has made.” It was sharp and unambiguous, and it was fully merited.

As a student in the district headquarters town of Mysore in the mid-1960s, NRN’s dream was to become a “junior engineer in a hydroelectric project in the new temples of Nehru’s India.”  The most he would he concede to his ambition was the “macho” one of building a generator for the power plant. But then, life began to give him chances, unlooked for, unforeseen.

Narayana Murthy’s wife Sudha with son Rohan and daughter-in-law Lakshmi Venu at the Infosys AGM

From Kanpur IIT where a fortuitous meeting with an American academic revealed to him the magic of computers and his stint in IIM-Ahmedabad, to his now mythologized hitchhike from Paris to India, rudely interrupted by 72 hours in a Bulgarian prison that rid him of his Leftist sympathies forever, NRN learnt to see both triumphs and trials as tacit lessons for continuous improvement. “Learning from experience, however, can be complicated. It can be much more difficult to learn from success than from failure. If we fail, we think carefully about the precise cause. Success can indiscriminately reinforce all our prior actions,” he said at a pre-commencement address in 2004 for students of New York University’s Stern School of Business.

It is this relentless rigour that saw him lead the Infosys turnaround in the late nineties and make it the first-ever Indian registered company on the Nasdaq. He was the main architect  when it pioneered such things as stock options for employees, internal transparency, a fun-filled workplace ethic and global delivery model that made Infosys, all of which became the industry norm for corporate governance and, far more importantly, showed the world what was capable with just brain power and sweat equity.

Of late, Infosys has slipped to second place in the IT sector behind main rival TCS in terms of net profits, and its last quarter results were not particularly favourable, a point that came in for some criticism on the part of the shareholders at the AGM. From August 20, when NRN turns 65 and will be divested of all official roles in the company he founded, a new leadership, many of them his trusted protégés, will take over. The jury, as it indeed is in such cases, is out on what they will be able to do the company in the long term, but NRN apparently has ensured that his main legacy that he bequeathed in the form of casually dressed men and women seen loitering in Infosys campuses, often the best and the brightest, who, when confronted with a problem and its even more outrageous solution, retort ‘why not’?

At the AGM towards the end, as the pathos-filled lyrics of Kabhi Alvida Na Kehna livened up a power-point presentation, NRN, seated on the dais, was a study in concentration. In the reticence, and the slightly sagging shoulders, however, one imagined a little pensiveness. But the man, as always, has his future decoded and ready. As he has said: “I believe that we have all at some time eaten the fruit from trees that we did not plant. In the fullness of time, when it is our turn to give, it behooves us in turn to plant gardens that we may never eat the fruit of, which will largely benefit generations to come. I believe this is our sacred responsibility, one that I hope you will shoulder in time.” Those words, like the man’s name, are bound to endure for a long time.

source: http://www.bangaloremirror.com / Cover Story / by Anil Nair / Sunday Jun 12th, 2011

The Beginning of an Era

All eyes on you: Infosys' attempt to maintain continuity while managing change is reflected in the elevation of S. Gopalakrishnan (left), CEO and MD, to Co-Chairman. S.D. Shibulal, COO, will take over the former's duties. File photo: G.R.N. Somashekar
All eyes on you:  Infosys’ attempt to maintain continuity while managing change is reflected in the elevation of S. Gopalakrishnan (left), CEO and MD, to Co-Chairman. S.D. Shibulal, COO, will take over the former’s duties.
File photo: G.R.N. Somashekar / The Hindu

The company is in its third stage of evolution: Infosys 3.0

A change at the top of any large and successful corporation always appears cataclysmic to those outside it. Infosys Technologies Ltd., which unveiled a ‘leadership succession plan’ on Saturday, was no exception.

The stepping down of its “iconic” Chairman, N.R. Narayana Murthy, heralds the end of an era spanning three decades in which Indian companies established themselves as the preferred choice of global corporations seeking to outsource work offshore.

Child of the boom

Infosys was unique in the sense that it was truly a child of this boom. It saw the opportunity, built a viable model for this task and quickly scaled it up to make it a viable proposition for the large corporations to outsource their work here. Of course, there were other companies such as Tata Consultancy Services, which had been in existence well before the IT services boom had even started. Wipro, too, had started business in the IT space, but it had its eyes set on the hardware space. The point is that among all the IT biggies, Infosys was the only company that was truly a child of the outsourcing boom.

It’s complicated

Although it is tempting to relate Infosys’ current challenges to the impending departure of Mr. Murthy and several of his colleagues, the reality is much more complex.

The company’s strenuous attempt to portray the transition as one which will maintain continuity while managing change is reflected in the elevation of S. Gopalakrishnan (the current Chief Executive Officer and Managing Director) to the position of Co-Chairman of the Infosys board, while appointing an ‘outsider’, K.V. Kamath, a banker, as the new Chairman.

A new era

Much as the media likes to identify the change of guard at Infosys with the beginning of a new era, the fact remains that the new era is much more than merely the departure of these founders. Infosys today, is undoubtedly under pressure, just as the rest of the business is. Margins have been dipping even as wage costs have been rising, but the biggest factor since the global meltdown has been the increasing risks associated with uncertainties in the global economy.

Industry leaders were smug initially, claiming that the virtual collapse of the businesses since 2008 would only spur more outsourcing. Companies, driven by the cut-costs-at-any-cost frenzy, would give them more work, they argued. The sceptics, who argued that business would be more difficult in an uncertain world, were simply silenced.

The turn of events in the last year shows that not only has ‘robust growth’ not returned, but volatility and unpredictability, best exemplified by the currency gyrations, remain the biggest risk for companies in this business.

Difficult environment

In the last four years, Infosys’ revenues doubled — from $ 3 billion to $ 6 billion — while the number of employees increased from 72,000 to a little over 1.3 lakh at the end of the last fiscal. It is evident that it is going to become more and more difficult for Infosys to maintain this rate of growth.

Infosys has always been regarded as a company that does not condescend to work on small margins or deal sizes. But in a difficult economic environment, the scope for such deals would become lesser, as Infosys has seen in the last few quarters.

Infosys, in the last few years, has also attempted innovative pricing solutions such as the one by which it only seeks a fraction of the cost that its solutions save for clients.

Mr. Gopalakrishnan pointed out that consulting and value-added services now contribute about one-fourth of the overall revenues. In addition, application development and maintenance contributes about 40 per cent to revenues.

Chief Operating Officer S.D. Shibulal, who takes over Mr. Gopalakrishnan’s duties from August 21, outlined his vision in taking the company to the third stage of its evolution — Infosys 3.0.

The first stage was about developing the Global Delivery Model, the second was about integrating the model with the company’s consulting practice and expanding the scope of Infosys’ services and the third would be “about evolving our model further to remain relevant to clients, said Mr. Shibulal.

Meanwhile, the industry awaits with interest the reorganisation of the company’s business divisions, which Mr. Shibulal expects to complete in two months.

 

http://www.thehindu.com / V. Sridhar / Bangalore / May 03rd, 2011