Eight years after he relinquished all responsibilities at Infosys to take on the task of building the Aadhaar infrastructure, Nandan Nilekani has returned to the company he co-founded in 1981.
Peter Bendor-Samuel, CEO of outsourcing research firm Everest Group, said Nilekani’s return to Infosys signals a commitment from the board to try and heal the divisions between board members, between board and founders, and internally within the ranks of Infosys employees. But he said the board changes do not by itself self-resolve the underlying issues that caused this split.
The boardroom shake-up at Infosys on Thursday signalled a truce to the blood-letting between the founders and the directors that cost the company and its shareholders dearly . While the exits of R Seshasayee and Jeff Lehman were on the cards along with that of Vishal Sikka, that of John Etchemendy was a bit of a surprise. As was Roopa Kudva and Ravi Venkatesan staying on.
Peter Bendor-Samuel CEO of Everest Group, said “It’s interesting that not all members are stepping down and this probably signals that the board is not raising the white flag to Murthy who, I understand, they are very upset with. Nilekani’s return to Infosys signals a commitment from the board to try and heal the divide between board members, board and founders and internally within the ranks of Infosys employees.“
On the day that Infosys co-founder Nandan Nilekani was brought in as the Board Chairman, analysts said that the move may allay investors’ fears in the short term, but over the long term, all eyes are on who the next chief executive will be.
“Nilekani(‘s) return to Infosys signals a commitment from the board to try and heal the divided between board members, board and founders and internally within the ranks of Infosys employees. Clearly Infosys needs to bring these stakeholders together and present a united front to the Industry, shareholders, and clients,” Peter Bendor-Samuel, CEO of research firm Everest Group told Moneycontrol.
Infosys co-founder Nandan Nilekani was announced as its Board Chairman on Thursday and analysts view the decision as a step in right direction. However, in long term, the challenge remains as to who would be named the next chief executive.
“Nilekani(‘s) return to Infosys signals a commitment from the board to try and heal the divided between board members, board and founders and internally within the ranks of Infosys employees. Clearly, Infosys needs to bring these stakeholders together and present a united front to the Industry, shareholders, and clients,” Peter Bendor-Samuel, CEO of research firm Everest Group told Moneycontrol.
Read more in The American Bazaar
BENGALURU: The board of Infosys is coming under fire with experts probing whether it has failed to effectively shield outgoing CEO Vishal Sikka and resolve differences with founders, instead of escalating matters to a warlike situation.
“The board has handled this situation poorly — they brought in Sikka, endorsed his strategy and then did not provide him adequate support and allowed Murthy to undermine him. Sikka also has some of the blame as it became clear early that he needed to build a relationship with Murthy and take him along,” Peter Bendor-Samuel, CEO of US-based research and advisory firm Everest Group, said.
Infosys’ search for a new chief executive, apart from being a challenge for the company, will also be an attempt to shift the power centre at the company back from California to Bengaluru, where the founders are based.
Sikka was based in Palo Alto, California, and ran India’s second largest IT services company majorly sitting in the US.
“This cannot help Infosys positioning in the US and other export markets such as the EU,” Peter Bendor-Samuel, chief executive at consultancy Everest Group said.
Infosys, rocked by internal turmoil and without a permanent chief executive at the helm, is in danger of losing ground to rivals and missing growth targets for the fiscal, say analysts who anticipate further turbulence at India’s second-largest software services company following the sudden exit of its CEO Vishal Sikka on Friday.
“Infosys will have to move quickly to establish a new governance mechanism for its top clients and reassure them it is still committed to the vision Sikka had articulated,” Peter Bendor-Samuel, CEO of IT consultancy Everest Group, told ET.
Many analysts are disappointed with Infosys CEO Vishal Sikka’s exit. They expect more attrition at the top, difficulties in finding a good replacement, continuing tensions between the board and the founders, and confusion around the company’s direction. And all of this is expected impact the company’s performance and weigh on the stock, at least in the short term.
Peter Bendor-Samuel, CEO of outsourcing research firm Everest Group, said the founders may take some pleasure in Sikka’s resignation, however, Infosys faces a difficult task in replacing him and the abrupt departure puts Infosys in a difficult situation. “Few strong or promising executives will want to take on the troubles that Sikka had with a divided board,” he said.
Vishal Sikka on Friday resigned as the chief executive (CEO) and managing director (MD) of Infosys Technologies, India’s second-largest software services company. While the board of Infosys accepted the resignation of Sikka with immediate effect and appointed U B Pravin Rao as the interim CEO & MD, Sikka has been appointed the executive vice-chairman of the company.
“He (Sikka) tried to focus on the fast growing digital market, however, this strategy has been less successful with competitors such as Accenture and Cognizant being more successful in digital business. The final strategy Sikka has attempted to deploy is to join Accenture in acquiring companies in the fast growing digital market. However, he has been somewhat constrained by his board led by the Infosys founders in executing this strategy aggressively,” Peter Bendor-Samuel, chief executive of global IT research firm Everest Group, had told Business Standard earlier.
If you are a young software professional still flush with the excitement of being hired from campus a year or so ago and cherry-picked for training programmes, take a deep breath before you read this.
Anecdotal evidence shared with Moneycontrol suggests that companies are sacking youngsters within a year of having hired them as they get increasingly desperate to cut costs in the face of slowing growth and automation.
The IT industry is coming to grips with a market shift from an arbitrage-first model to a digital-first model, said Peter Bendor-Samuel, CEO of consultancy Everest Group.
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