Infosys Reshuffles Its Deck

The corporate reorganisation at Infosys will have far reaching impact on the company’s future. BG Srinivas, global head of Manufacturing & Engineering business will take over as the new leader of the company's Financial Services & Insurance business. Ashok Vemuri, present Global Head of its Financial Services & Insurance business will now lead the company's Manufacturing & Engineering business. Both Srinivas and Vemuri were inducted into the Infosys board in June last year and are top contenders for being chosen as the first non-founder CEO of Infosys.

The announcement is a highly unusual one from Infosys. Unlike Wipro, which routinely rotates its top leadership, Infosys has almost never done job rotations of this kind. Infosys believes in change with continuity and is a stickler for tradition and routine. Vemuri and Srinivas have led their respective businesses for almost a decade now and they were chosen to lead these verticals for a specific reason. Both joined Infosys in the late ‘90s, Vemuri coming from Citibank and Srinivas from ABB.

Given how counter-intuitive this move is, the motivation for a role swap of this nature must be really big.

Infosys is going through a difficult phase. On January 12 this year it announced that growth next quarter will be flat, dragging its stock price down 5 percent.

In a press release announcing the new responsibilities, S D Shibulal, CEO and Managing Director, Infosys said, "We have always focused on giving our leaders a diverse set of experiences over time to fully realize their potential. Ashok and BG's track record in leading high growth organizations has been superb. This change allows them to leverage cross-industry experience to help our clients Build Tomorrow's Enterprise." The changes are effective April 1, 2012. Ashok Vemuri and BG Srinivas, both members of the Infosys Board of Directors, will continue with their existing regional leadership responsibilities for the Americas and Europe, respectively.

Srinivas has long been held as the favourite candidate for the CEO’s job by company insiders and they believe that giving him charge of a vertical that brings in 35 percent of Infosys revenue has taken him closer to that goal post.

A bigger reason behind this move could be the company’s performance. For the longest period, Infosys has been the shining star in the BFSI vertical, which has some of the biggest spenders of technology in the world. But over the years Infosys’ is losing its edge in this business. TCS and Cognizant have aggressively grown their market share in this crucial segment. For the quarter ending Sept 30, 2011, Cognizant’s BFSI revenue stood at $655 mn, Infosys was at $ 616 mn. Although Cognizant’s margins are much lower than Infosys, its aggressive growth cannot be wished away. (Cognizant has not announced results for the Dec ending quarter). Infosys insiders think of BG (as Srinivas is called) as a turnaround artist and credit him with growing Europe from a small outpost into a region, which now brings in over 20 percent of revenue.

But this latest organisation reshuffle, combined with all the changes made in the last 12 months, clearly indicate that Shibulal is pressing all the necessary levers to put Infosys back on the growth mode.

Two weeks ago, I’d met Shibulal at the Infosys campus, and he displayed no signs of any nervousness or stress given the environment the company is facing. He is now fully in charge of all executive decisions and appears extremely confident that the strategy that he has embarked upon will transform Infosys into the next generation consulting and services organisation. I asked Shibulal if he had received any advice on how he should do his job in such trying circumstances. He said the only advice he remembered was what NRN Murthy (Infosys founder and Chairman Emeritus) told him in Chicago last year. He said Murthy told him, "Shibu, take tough calls".

People close to the company also say that there is now a lot more empowerment at the business unit head’s level. Shibulal says that what was earlier a rubik's cube structure  has now been smoothened into a much simpler matrix structure. Business unit heads now have the freedom to sell multiple service lines without getting entangled in the red tape. Where every small financial decision needed to be whetted by the CFO’s office earlier, now business unit heads have more control and have clearly told their sales team – “get the order and we will take care of the rest”.

The thoughts and opinions shared here are of the author.