Home >Companies >News >Vishal Sikka as CEO ends Infosys’s founder-led era

Bangalore: India’s second largest software exporter Infosys Ltd has named former SAP AG global product head Vishal Sikka as its first non-founder chief executive, ending a search process that lasted several months and further uncertainty over the company’s future succession planning.

Founder N.R. Narayana Murthy will step down from his role as executive chairman from 14 June. He will continue in a non-executive role on the board till 10 October to ensure a smooth transition.

The latest developments mark the biggest-ever management transition in the 33-year-old company’s history, with the Bangalore-based firm appointing its first ever outsider chief executive. It also marks the end of an era for the company with all its founders, led by Murthy, set to leave.

The company has also re-appointed ICICI Bank Ltd’s non-executive chairman K.V. Kamath as its non-executive chairman.

Infosys, which is in the middle of a top-level exodus, has also elevated company veteran U.B. Pravin Rao as its new chief operating officer.

Along with Murthy, vice chairman and co-founder S. Gopalakrishnan will also step down from his role, effective immediately.

“I would like to thank our clients, the members of the board, all my colleagues at Infosys, ex-Infoscions, our investors, the media, and well-wishers of the company for their support and encouragement. I also want to thank the members of my office, the chief financial officer and the head of human resources for their fabulous support through my second innings at Infosys," Murthy said in a statement.

“I am honoured to lead Infosys, an iconic company built by pioneers in the technology industry. I look forward to working with and learning from talented Infoscions around the world. Computing technology is reshaping every industry across every walk of life. We, at Infosys, have a unique opportunity to deliver breakthrough solutions that will bring greater value to our clients, employees, investors and other stakeholders. I am grateful to the Infosys Nominations and Governance Committee, Mr. Kamath, Mr. Murthy and the board for this opportunity," Sikka said in a statement.

Sikka’s appointment does not come as a surprise. Media reports over the past month had indicated that Sikka was a frontrunner to take over the role of the company’s first non-founder chief executive.

Current chief executive and co-founder S.D. Shibulal will leave the company on 31 July, it said.

The executive chairman’s office will be dissolved with effect from 14 June. Murthy’s son and executive assistant Rohan Murty, whose appointment was co-terminus with the executive chairman, will also leave the company on 14 June. The remaining members of the chairman’s office will take up other responsibilities in the company.

“I think it’s a brave move to appoint someone like Sikka," said an analyst at a foreign brokerage who did not want to be named. “But he will now inherit the challenge of re-building Infosys from scratch—we’re looking at a potentially long turnaround period."

On Thursday, Infosys also said that the company had elevated 12 executives to the role of executive vice president—a move that experts said was undertaken to stem the steady exodus of top-level leaders.

After his appointment, Sikka who is widely credited as the brains behind SAP’s popular HANA software platform, tweeted: “Humbled to lead @Infosys an iconic pioneer in IT. Looking forward to learn & work with Infoscions & global clients on breakthrough innovation."​

Former Infosys executives and experts welcomed Sikka’s appointment and said a shift in the company’s future strategy is necessary, but cautioned that the rebuilding process and a potential turnaround in the fortunes of the former sector bellwether would possibly take a while, given Sikka’s lack of experience in the business of IT services.

“He comes from a products background and not from services, which is totally different," said V. Balakrishnan, a former board member at Infosys who left the company last December after a two-decade stint. “But I think the future of services business is related more to products and innovations—and that is where he can play a larger role."

“Also, the core team is very important and that is missing from Infosys right now. He now has the task of rebuilding the core team and that will take some time and will be challenging," he added.

“This is good news for Infosys’s push into the products world with its Edge platforms, but whether Vishal can transform the current uncertain strategy and direction of its services business is to be seen. The recent turbulence, ongoing management departures and plummeting moral of the firm needs to be reversed very, very quickly. Clearly such a dramatic appointment is designed to correct-course and set a new direction for the firm—and I laud the bravery and boldness of this appointment, but there are many questions that Vishal will need to answer in the coming weeks and months. I fear his lack of services leadership could be an impediment.," said Phil Fersht, chief executive and founder of outsourcing advisory firm HfS Research.

Shares of Infosys surged as much as 3.75% on BSE following Sikka’s appointment. At 11am, however, the shares reversed gains to trade 1.25% lower at 3,138 apiece, while the benchmark Sensex gained 0.31% to 25,553.55 points.

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