Infosys revamps its consulting business
Firm appoints Sanjay Purohit to revive the $350 million business, which includes its Lodestone subsidiary
Bengaluru: Infosys Ltd is undertaking the biggest organizational and management revamp at its consulting business, as the country’s second largest software exporter tasks Sanjay Purohit with reviving the fortunes of its $350 million business, including that of its Lodestone subsidiary.
Infosys acquired Swiss consulting firm Lodestone in 2012 for $350 million. As part of the first management reshuffle undertaken by chief executive Vishal Sikka last month, the company has decided to bring Lodestone under the consultancy service line.
“To strengthen and consolidate our consulting services, we are integrating Lodestone and our Management Consulting Services Unit into a single entity that will reside within Infosys Limited,” said a spokeswoman for Infosys, declining to share details.
The new structure, which becomes operational from 1 April, will be headed by Purohit, formerly head of Edgeverve, the products, platforms and solutions subsidiary of Infosys, according to two company executives who declined to be named.
In his new role as head of Infosys consulting, Purohit will be based out of Palo Alto and will also oversee Lodestone. For now, it is unclear if Infosys will retain the brand name Lodestone or change it to Infosys consulting.
Nonetheless, some experts termed this as a bold move as it helps Infosys work as a coherent unit in the consultancy space.
“This actually makes sense as it looks like Sikka wants to separate ERP (enterprise resource planning) and consulting business,” an analyst said on condition of anonymity. “So bringing back Lodestone makes sense as it can use its capabilities to make inroads in the US market where it already does some small work.”
Infosys’s consulting business has close to 5,000 people, with Lodestone having a little over 1,100 employees, according to one of the executives cited above.
Earlier in February, Infosys undertook a management reshuffle on its delivery side, as part of Sikka’s “new and renew” strategy as the company aims to become the “next-generation services firm”.
Infosys has decided to have a structure under which each of its seven service lines, including big data and analytics and consulting, will offer solutions to Infosys’s customers across different industry segments, such as banking and financial services and energy and utilities.
Some experts said they will wait for details on how Infosys want to project itself in the consultancy space, which is dominated by global information technology (IT) giants, including Accenture Plc.
Accenture during the three months ended November 2014, earned more than half of $7.9 billion from consulting business.
“I suppose fundamentally it needs to be about more than just relocating some executives,” said Thomas Reuner, principal analyst at Ovum, a London-based IT research firm. “Until we hear any more details it is difficult to assess.”
To be sure, Infosys is trying to scale up its presence in the US, which accounts for nearly 60% of the Bengaluru-based company’s revenues.
Last year in November, Infosys decided to hire 2,100 people in the US, with nearly 200 executives to be hired in the consultancy space.
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