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Infosys to have new board of directors by 2015

Thursday, 27 February 2014 - 6:00am IST | Place: Mumbai | Agency: dna

Kris Gopalakrishnan to leave in April next year; co to hive off more non-performing divisions.

A month after Infosys realigned its structure, creating two presidential positions to replace its executive council, executive chairman N R Narayana Murthy announced that there would be another restructure of the internal Board in 2015.

Speaking at a Deutche Bank investor meet in Bangalore on Wednesday, NRN said, "Shibulal (CEO) retires in March 2015 we will ensure that there is a suitable person to replace that place. We have had changes in internal board of directors. You will see some more changes till then. Kris Gopalakrishnan (executive vice-chairman) will leave in April 2015. Srinath Batni (member of the board and Head of Delivery Excellence) will also leave by November 2014 and Omkar Goswami (independent director) by December 2015."

Post Infosys's Q3 results in January, current CEO, SD Shibulal said Batni would be replaced by Chandrashekar Kakal, senior vice-president of global delivery at Infosys.

The news comes a day after Infosys said it was hiving off its products, platforms and solutions (PPS) business into a new entity called Edgeworks, that would include banking division, Infosys Finacle, under new CEO, Sanjay Purohit.

An overhaul of Infosys 3.0 strategy to focus more on services instead of solutions and products is definitely on and will prompt many more leadership changes with the changing structure.

"Finacle is the only product of Infosys to have survived. Under the 3.0 strategy, NRN is trying to accommodate a second tier of leaders in the system, after making the non-performers exit. The Edgeworks structure will be followed for other processes, as well – with other non-performing processes, likely to be hived off or merged into another unit, just like the non-performing PPS division. Rohan Murty, executive vice-assistant to father, NRN Murthy also said Infosys was looking at an acquisition to grow Edgeworks," said a source requesting anonymity.

NRN Murthy also recently said that non-performers would not be tolerated – whether at the top, middle or lower level-- and the company had initiated a programme to induce attrition of non-performers.

At a Bank of America Merrill Lynch investor meet last week, NRN had said, "Our costs have ballooned very rapidly in the last 2-3 years. For example, on-site compensation was 36% of the overall revenue in 2010-11 and it went up to 46.3% in 2012-13. A part of it was because we hired people at high salaries outside India and these people did not add value to the company. Our desire is that Infosys should get back to industry leading growth rates. What that growth rate will be is something that we will tell you as we move forward."

However, some industry experts feel the recent internal Board revamping is not a part of the ongoing exercise to 'trim the flab' in Infosys.

Sashi Bhushan of Prabhudas Lilladher, said, "The names announced on Wednesday are stepping down due to retirement, and there is nothing more to read into it."

Infosys management said it has set up an Infosys Leadership Institute to ensure picking of potential leaders who can be trained to rise up to management roles in the organisation. This will also mitigate the impact of the steady stream of exits at Infosys, numbering eight top-level exits in the last eight months since NRN's return.

Infy to give 5-7% wage hikes this year
Infosys has announced hikes of 5-7% for fiscal 2015, according to company sources. This is against employee expectation of double-digit hikes in the range of 10-12% and average industry standard of 8%. Narayana Murthy, executive chairman of Infosys, had announced a second wage hike for employees. However, the 5-7% hike is below the average industry standard of 8%. Attrition at Infosys currently stands at industry-high of 18%.

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