New Delhi: A year into his role as chief executive officer of Infosys Ltd, Salil Parekh has made the first big hire at India’s second-largest information technology (IT) services firm by naming former Cognizant Technology Solutions Corp. executive Mark Livingston the head of the consulting business.
Livingston, who scaled up Cognizant’s consulting practice from less than 1,000 consultants in 2008 to a 6,500-strong unit before leaving the Nasdaq-listed firm in February last year, joined Infosys last week, according to an executive familiar with the development.
This comes in the wake of Ken Toombs resigning as head of the consulting unit in October.
For now, it is not clear if Livingston, who reported to CEO Francisco D’Souza at Cognizant, will report to Parekh.
Infosys declined to comment.
Under Parekh, Infosys has looked at strengthening its consulting business. The company has made three acquisitions, across the US, Europe and Japan over the last nine months. It spent $75 million in April to buy WongDoody, the US-based ad agency, followed by a $76 million payout to buy Fluido, a Salesforce consulting partner in the Nordics in Europe. Earlier this month, Infosys stitched a joint venture with three Japanese companies, including Hitachi, Panasonic and Pasona, with the aim of scaling up business in Japan.
Livingston’s appointment is significant for three reasons, according to analysts and executives.
First, since taking over as the second non-founder CEO of Infosys after Vishal Sikka resigned last year, Parekh has appeared mindful of the cultural risks associated with hiring senior leaders from outside the company.
“Controlled outside hiring minimizes the risk of a culture hijack and creation of us versus them camps, that can result from a sudden influx from senior leaders from outside," JP Morgan Chase and Co. analyst Viju George wrote in a note to investors on 2 September, after meeting Parekh.
Thus, Livingston’s appointment reaffirms that Parekh is now looking to hire talent from outside the company in areas in which Infosys does not have required skill sets.
Parekh is believed to be a leader who understands the consulting space as he first worked with EY’s consulting division and then at Capgemini after it bought the former.
“My sense is we have a tremendous opportunity and options within, and now I’ve started to see quite a few people from outside who are calling me, or calling us, to join the leadership levels from some of our competitors," Parekh said in an earlier interview. “So we have the opportunity to start bringing people from outside as well. So far, I’ve not done that, but over time it will be a mix, predominantly of internal candidates and occasionally some external as well."
Second, over the last four years, the consulting business has been an Achilles heel for Infosys as the company has struggled to leverage its consulting arm to win more business from clients: For much of his three-year stint, Sikka acknowledged his company’s struggles to bolster its consulting business.
Over the last few years, Indian IT vendors, led by Infosys, Tata Consultancy Services Ltd and Wipro, have looked to build a consulting practice as they realized that it offered an opportunity when large enterprises over the world looked to simplify their existing technology and business operations. A strong consulting practice helps, especially as most Fortune 1000 companies want their IT vendors to offer them solutions in areas of data analytics and artificial intelligence-led platforms to help them run their business better.
Unlike Accenture Plc, homegrown IT firms do not get any significant business in fees from offering thought leadership and club revenue from software application development and implementation when reporting business from consulting practice. In the year ended 31 March, Infosys claimed to generate one-third or $3.54 billion of its $10.94 billion in revenue from what it called “consulting and package implementation".
Finally, Infosys over the last many years has looked at different approaches to build a strong consulting practice: from acquiring a pure-ply company like Swiss consulting unit Lodestone in 2012 to having a product-led approach in building consulting business by hiring executives from SAP and other product-led firms.
“Now, it seems that Infosys is looking to take a leaf out of its peers, especially as Cognizant is considered to having the strongest consulting practice," said a Mumbai-based analyst at a domestic brokerage on the condition of anonymity.