Reference Auto

Infosys has been on a rejig exercise for quite a while with the latest one being appointing ace banker and former ICICI Bank chief KV Kamath as chairman, in place of founder NR Narayana Murthy, but with this move, will the country’s second largest software company trump the largest IT firm, that is Tata Consultancy Services or TCS?

Infosys, despite several shake ups, has not been able to match TCS on revenues as yet. In fact, the revenue gap between TCS and Infosys has been widening.

TCS has substantially scaled up revenues with Infosys with the gap now burgeoning to Rs 9,824 crore compared to half that figure, that is, Rs 4,792, in the financial year 2006-07.

Bangalore-based Infosys has promoted chief operating officer or COO SD Shibulal as chief executive officer or CEO with the current CEO S Gopalakrishnan being elevated to the post of executive co-chairman.

These changes will be effective from August, when Murthy steps down as chairman. Earlier, Infosys received a major blow when its HR head TV Mohandas Pai stepped down.

It was widely perceived that Kamath’s appointment has somewhat whittled down the role of Gopalakrishnan. But that seems to be far from the truth.

While 62-year-old Kamath’s induction has been seen as bringing in a man of wisdom into the Infy fold, the operations of the company will be looked after by Gopalakrishnan and Shibulal.

Murthy was one of the co-founders of Infosys, which started with a minuscule $1,000 in the early 1980s. The company, since then, has been growing exponentially, with revenues now standing nearly at Rs 20,000 crore.

With intense competition under way, Infosys not only has a long way to go to catch up with TCS but is also facing threat from a new star Congnizant.

Rivals such as TCS and Cognizant have been eating into Infosys share owing to the Bangalore firm’s policy of premium pricing, which is considered a rigid approach, while the Bangalore-based company has also shown less aggression in trying to sign deals.

Results for the last quarter of the previous financial year were disappointing and Infosys missed market expectations for a second time. Moreover, with the process of growth still uncertain in the US, Infosys may find the going tough in the near to medium term.

So, what can Kamath bring into Infosys? Murthy had led the first level of growth at Infosys, and with market conditions changing, Kamath has been roped in to take Infosys to the next level.

With Kamath having financial acumen (which can come to use during mergers and acquisitions), and with Gopalakrishnan and Shibulal there to steer his ship, can the former ICICI Bank head help Infosys surge ahead of TCS to make it the top IT firm in India or can only fresh blood (a complete overhaul of the management with induction of young faces from Infosys as well as outside) do the trick.