The recent management changes at Infosys would help the company to centralise some decision making and optimise costs, opine analysts.
India’s thirds largest exporter appointed Ranganath D Mavinakere, Binod Hampapur Rangadore and Nithyanandan Radhakrishnan as members to its Executive Council. Further, all three of them will be reporting to Chairman N.R. Narayana Murthy.
Analysts and industry watchers opine that these appointments were made in key areas at an important juncture. Mavinakere will head the cost optimisation initiative, Rangadore will head delivery of software projects from across geographies and Radhakrishnan who heads the legal department within the company will all report to Murthy.
“This move clearly indicates that he wants to directly handle certain functions,” said A.K. Prabhakar, Senior Vice-President - Equity Research, Anand Rathi.
Prabhakar’s views are echoed by others in the industry who feel that with Murthy’s comeback, decisions pertaining to some of the key pain points for the company will be addressed sooner rather than later.
Another former Infosys executive told Business Line on condition of anonymity that the company was not taking decisions faster, which is the reason why Murthy wants to oversee certain key business areas, which is critical for the company to look into at this point in time.
On the issue of cost optimisation, Infosys is under a lot of pressure from Indian and global peers, who have figured out a better mix of lower margins (when compared to Infosys) and employee costs, according to industry watchers.
“This clearly indicates Infosys is willing to cut down on its pricing and is aggressive about cost control within the organisation,” said Kris Lakshmikanth, Founder of recruitment firm Head Hunters India.
Santhosh Babu, Founder of Organisation Development Alternatives, a top management coaching firm - opined that organisations have to do two types of cooking. “Cooking sour involves cost reduction and cooking sweet is about showing the big picture, the future where the organisation is headed.
Industry watchers feel that this is one of the key areas that the company has missed out when compared to peers such as TCS, Cognizant or HCL Tech.
Apart from pricing, compliance is turning out to be an issue with the company as it faces potential lawsuits in the US. “Murthy wants to handle this from close quarters unlike the past,” said Prabhakar.