Will Murthy succeed in rebuilding a 'desirable' Infosys?

New Delhi, Jul 1: At Infosys Ltd's annual general meeting, returning chairman N.R. Narayana Murthy sought a three-year lien from shareholders to rebuild what he called a “desirable Infosys”. Murthy's solution is to refocus the company on winning large revenue-yielding outsourcing projects in the short term. Over the past two years, the Bangalore-based IT giant has had a string of disappointing results as it struggled with a strategy to shift to higher value-added services by offering consultancy and software products and solutions.The 66-year old founder, had returned as executive chairman of Infosys following a request from the company's board, which was under pressure from investors regarding existing troubles. Infosys grew at half the pace of the broader industry in 2012-13. Murthy had stepped down as CEO 11 years ago. He is the company's second-largest shareholder.Murthy is hoping to rejuvenate the firm by revitalising his salesforce with incentives, spending more on the company's staff of more than 150,000, and offering flexibility on pricing to win large contracts. In a difficult operating environment, the company's rivals have strongly positioned themselves to win traction among both the consumers and investors. The company's current leadership has also failed to execute Infosys 3.0 well. In addition, it has also started losing its grip on bread-and-butter businesses like application development and maintenance while chasing margins. This year, Infosys expects to grow at a 6-10 per cent rate, lagging behind the industry's forecast of 12-14 per cent growth rate.Muthy, who has also brought his son Rohan as executive assistant, has also been calling former team-mates to check if they would like to work with him. Murthy has asked to be paid a token Rs 1 per year during his five-year term.“This calling was sudden, unexpected, and most unusual. But, then, Infosys is my middle child. Therefore, I have put aside my plans-in-progress and accepted this responsibility. I am grateful to K. V. Kamath—the chairman, the Board, and every Infoscion for giving me this opportunity. I intend to do my best to add value to the Company in this challenging situation,” Narayana Murthy said in a statement.“It's just like Steve Jobs coming back to Apple for a second time,” said T.V. Mohandas Pai, former director at Infosys and currently chairman of Manipal Global Education. “The company had become dysfunctional and was not operating properly, so he came back. Some companies respond to charismatic, strong leaders,” he said.“The problem with Infosys is the growth in sales. Murthy understands what needs to be done and he'll bring back the zing to the sales. His first goal will be to rebuild and refocus the sales team and bring sales home. Once the sales start increasing things will fall into place,” Pai said.Founded in 1981 by Narayana Murthy and six others, including Nandan Nilekani, Gopalakrishnan and Shibulal, Infosys has been rated of India's most high-profile IT companies. Recently, Infosys CEO S.D. Shibulal said the company has failed to live up to its manifest destiny. It has failed singularly in becoming a comprehensive solution provider, which is what International Business Machines Corp. (IBM) and Accenture Plc are.The challenge for the new leadership team will be to deliver a march over the competition and deliver good growth in both market share and margins. Given the reputation that Infosys led by Murthy had enjoyed over the years as one of the creators of the offshore development centre paradigm, for its quality and values, it will not be a mountain to climb for a company with the width and depth of talent it possesses. The success of Infosys will largely depends on how quickly he makes Infosys adapt to the new rules of business.