In picking Salil Parekh as new CEO, Infy hopes to rebuild consulting business

With the appointment of Salil Parekh as the new Infosys CEO, the software major is hoping to rebuild its position by strengthening its consulting business, culturally align with co-founders and soothe the frayed nerves of its 150,000-odd workforce.

Parekh’s taking over of one of India’s strongest brands has evoked mixed reactions from industry watchers. As positives, observers like Sanjoy Sen, Doctoral Research Scholar, Aston Business School point out that his experience with Capgemini, a European software services giant, will be handy in building the consulting business, which contributed one-third of Infosys’ $10 billion revenues but is struggling to take off.

“This business needs to be rebuilt; without consulting, one cannot expand into its marquee client base,” added Kris Lakshmikanth, CEO, HeadHunters India.

Key vertical While the consulting business contributed around 32.3 per cent of revenues last fiscal, it is clubbed with the Package Implementation business, which industry watchers say contributes to the majority of this business. IT analysts expect the Infosys stock to go up tomorrow, but continue to be “watchful” about the company.

Another consideration that many fear may weigh heavily on Parekh relates to the extent of influence of the founders, who hold a 12.75 per cent stake in the company.

Sanjay Padode, Secretary, Centre for Developmental Education, IFIM Institutions, said that the founders will not let go of their baby so easily and Parekh will need to work with them.

“He has not faced these issues in the past and it will be interesting to see how he copes with things,” said Padode.

As Parekh is set to tackle all this, employees are hoping that a clearer direction from the new CEO will align with their interests.