With Shibulal at helm, Infosys to redefine value at boundaries

With Shibulal at helm, Infosys to redefine value at boundaries

Bangalore: A few weeks ago, S.D. Shibulal, chief operating officer of Infosys Technologies Ltd, quietly oversaw the official restatement of the firm’s positioning from winning in the flat world to building tomorrow’s enterprise.

After Infosys board on Saturday named him chief executive officer (CEO) to take over from S. Gopalakrishnan, Shibulal returned to this theme, making it clear what Infosys was going to be in his tenure.

“Value is created at the boundaries," he said, meaning the boundaries between technologies and processes, client and vendor, new and old.

Gopalakrishnan will become executive co-chairman, both an “elder brother" in co-founder N.R. Narayana Murthy’s words and someone overseeing the “client, employee and investor connect".

Murthy will become chairman emeritus, with former ICICI Bank Ltd chairman K.V. Kamath becoming chairman. All the changes will be effective from 21 August, a day after Murthy turns 65.

While the company’s board a couple of years ago decided the age of retirement for board members would be 70, the founders decided to opt out. Kamath is 63 and can technically serve for another six-seven years.

For both founder-chairman Murthy and Shibulal, the next stage of Infosys’ growth has to be around building strategic partnerships with clients, increasing its relevance to them beyond being technology implementers, and constantly evolving the business model to keep up.

Shibulal has pointed to “seven themes or drivers" around which his clients’ vision of tomorrow’s enterprise will have to be built. He outlined the themes again on Saturday, with the first around the modern digital consumer, empowered, peer referenced, tech savvy and a co-creator of the products and services he or she buys.

The others are emerging economies; sustainability; smart, learning organizations; new forms of mobile and inclusive commerce; pervasive networks and computing; and integrated healthcare systems.

Another step has been taken—the word technologies will be dropped from Infosys’ name, which will become Infosys Ltd, reflecting a fundamental shift away from the information technology (IT) implementation company that it started out as.

The firm’s vision early on was to be a “globally respected corporation providing technology solutions". This evolved to a vision of being a globally respected corporation providing technology-led business solutions.

It won’t be easy. In fact, Murthy, in a recent interview with Mint, had identified the ability of the Infosys of tomorrow to build and deploy global, cross-cultural teams as a key emerging challenge.

And there is no doubt that as Infosys makes the necessary investments in moving up the value chain, its famous margins and pricing premium can come under pressure, said Abhishek Shindadkar, an analyst with ICICI Securities Ltd.

The company is already talking about increasing the headcount by 4,000 in China and revisiting its desire for an acquisition in Europe.

On his part, chairman-designate Kamath, who is expected to devote around 30 days of his time a year to his new position, is clear about his role—he is chairman of the board, and Infosys’ board processes are clear and well defined. Strategy and execution is for the management. He is a man who believes in “positive aggression", however, and one can expect some of that to influence the direction of the company.

Kamath, known for his keen understanding of the role played by IT in banking, cited two lessons on Saturday that he had learnt from his decades-long association with Murthy, with the latter playing the role of a quiet mentor. While one was the levelling, democratizing power of technology itself, the other was about the power of “discipline, empowerment and recognition" in obtaining “consistent and replicable quality" in an organization.

And Murthy himself is still there, with Infosys’ leaders “having the right to consult him", as he put it.

On Saturday, Murthy became emotional as he recalled how as Shibulal’s boss three decades ago at Patni Computer Systems Ltd, he had once ordered him not to leave the office till he had completed a certain task.

Murthy discovered later that Shibu did not leave the office for more than 48 hours, working late into the night so that the task could be completed.

He will have to put in a few more late nights as he sets about laying the foundation for building tomorrow’s Infosys.

Bloomberg and Reuters contributed to this story.