How Vishal Sikka turned around Infosys in three years

How Vishal Sikka turned around Infosys in three years [ad_1]

BENGALURU: When Vishal Sikka took over the reins of Infosys three years ago, the company was in disarray , hit by a regular exodus of top executives, lagging growth compared to its industry peers, low employee morale and a high level of attrition. He had his task cut out: turn around the IT behemoth in the age of digital technology and put it on course.

Infosys CEO Vishal Sikka resigns: All that the company said

Infosys CEO Vishal Sikka resigns: All that the company said

After months of simmering tension between Infosys' current management and its co-founders, the company's CEO Vishal Sikka has resigned. Sikka has cited personal attacks on him as the reason for the sudden resignation. Here's all that the company said about Sikka's resignation.

​ Distressed by personal attacks on Vishal Sikka

The Board understands and acknowledges Sikka’s reasons for resignation, and regrets his decision. In particular, the Board is profoundly distressed by the unfounded personal attacks on the members of our management team that were made in the anonymous letters and have surfaced in recent months.

False allegations have harmed employee’s morale

As the Board has previously stated, a series of careful Board denounces the critics who have amplified and sought to further promote demonstrably false allegations which have harmed employee morale and contributed to the loss of the Company’s valued CEO.

Vishal Sikka to continue as executive vice-chairman till new CEO takes over

Infosys said, "Sikka has been appointed executive vice chairman effective today, and will hold office until the new permanent Chief Executive Officer and Managing Director takes charge, which should be no later than March 31, 2018."

Succession plan for the company brought into effect

The company said that the succession plan for appointment of a new managing director and CEO has been operationalised by the Board and a search for the same has been commenced.

Sikka to take $1 salary as executive vice-chairman

Sikka will take an annual salary of $1 during his tenure as executive vice-chairman.

Infosys founder NR Narayana Murthy: Sikka not CEO material

In an interview to a business daily, Infosys founder NR Narayana Murthy took Sikka head on and said that he felt the Silicon Valley import was more of a CTO material and not fit for CEO position. Sikka was with software giant SAP before he took over as Infosys CEO.

The former SAP executive was quick to highlight the threats and opportunities that automation would bring and how Infosys, if it had to survive in the new age of technology , needed to change its model from a hardcore software services company to one innovating products and platforms. To support this, Sikka had set an ambitious target of $20 billion in revenue by 2020, with operating margins of 30% and employee productivity of $80,000 and at least in the beginning of his tenure, the wind seemed to be in his sails. Infosys reported higher percentage of revenue growth for two consecutive fiscals, of 9.2% and 7.35%, beating Indian rivals TCS and Wipro but falling only behind Cognizant. Margins also improved, with the company closing the past quarter at 24.1%, beating TCS for the first time in many years. Shares of the company soared about 30% in the first two years as investors cheered. In the last one year, starting August 1, 2016, shares have fallen 15%.



The first non-founder CEO of Infosys had to deal with multiple challenges. In spite of Sikka's incessant harping on automation and products such as Skava and Panaya, new services contributed 8.3% while the plat forms 1.6%, totalling just $26.5 million of total revenue in the first quarter.



At the same time it was also difficult to change the culture of the company . Sikka has spoken of a dual strategy -to renew traditional business with automation, and develop new businesses around new digital technologies.



Adding to it all was the tussle between the board and the founders since the beginning of last year over issues ranging from former CFO Rajiv Bansal's severance package to the real motive behind the Panaya deal and the board's decision to raise Sikka's pay last year by 55%.



At the end of his third year, experts wondered how Sikka would pull himself out of the bind he had gotten into. Some wondered if he would stay on and attempt the difficult task.True to their fears, the Infosys CEO put in his papers, leaving Infosys in almost a similar cloud of uncertainty as he inherited.

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