Wow. When the rumors leaked out about Vishal Sikka being tapped up for the Infosys CEO job, we thought this idle speculation, but a possibility that Vishal could have some role where he could absorb the nuances of the services business to potentially take over in a couple of years.
But - lo and behold - the old guard have decided it's time to make a dramatic change and a big bold statement to the world by placing the popular tech innovator, Vishal Sikka, in charge of rediscovering that elusive Infosys mojo that has been absent for some time now. So... is the Infosys monarchy behaving like a Premier League soccer club and making a panic play to stave off relegation to the second tier of providers, or is this the boldest move yet from one of the TWITCH* provider family to make a late run at the Champions League?
Vishal is a technologist and much admired by technology-driven executives. His recent departure at SAP demonstrated how loved he was by the techno-purists and was seen by many as SAP selling its technology soul to appease the money-men. He was a driving force behind SAP's HANA (Hasso Plattner's brainchild) and the firm's emerging Cloud capabilities - and his absence at the recent Sapphire event was even more depressing than Bill McDermott's keynote speech.
Vishal will be key to driving Infosys' platforms strategy. You only need to look at the acquisitions made by the likes of Accenture and IBM over the last couple of years to realize that Cloud-based platforms that underpin analytical, consultative value-add services are the long-term future of services. One of the brighter spots in Infosys' recent troubled history has been its investments in its Edge platforms which target key industries such as insurance and manufacturing, and horizontal competences such as procurement and marketing. Having a real tech products guy at the helm will do wonders for helping Infosys develop out these platforms further and develop a "products culture" for that part of the firm.
Something needed to change - and fast. Despite a pretty decent financial performance in the market over the last 18 months (though lagging its major Indian counterparts), it was still abundantly clear that Infosys was struggling to break from its legacy past and make the changes necessary to rebuild company moral, reinforce strategic direction and re-invigorate the whole company culture and ethos. With TCS and Cognizant continuing their surge, Wipro getting its own act together and the emergence of Tech Mahindra and HCL as genuine contenders for deals that Infosys would have easily won in days-gone-by, the firm was getting squeezed and executives continued to leave the firm at a frequent clip - some volunatily, but most forced out. Infosys had managed to become cast as a "legacy" provider by several industry observers, which is not a place anyone wants to be in this cut-throat market. Vishal is an outsider, he is new blood, he has youth on his side. He gives them the immediate facelift they were craving.
Vishal is not a services guy. Technology products people often struggle to understand the nuances, challenges and culture of IT and business process services. Most view services as the grunt work that does the plumbing, while all the important stuff gets done in the innovation lab. HP practically committed Hara-kiri when it appointed Léo Apotheker, a software executive (also from SAP), to fix a company whose primary business was services and hardware. Léo ended up blowing $10bn on Autonomy, for no fathomable reason, before being hastily ejected, and Meg Whitman is still cleaning up the mess he left behind. While we laud the bold approach Infosys is making by putting a technology products innovator at the helm, the firm is still primarily a services business with a services culture. The CEO needs to understand what make millennials tick, how to develop training programs, how to keep wages low and morale high, how to develop succession plans and "up and out" models that work, how to inject analytical and creative thinking into its staff. In addition, 94% of Infosys staff are still India-based and they need to figure out a people strategy that is global, not just tailored for the Indian employment market. However which way we look at this, services is about people first, and Vishal needs to figure out how to make Infosys a more attractive career proposition for the best college graduates and experienced executives, than the likes of TCS and Accenture.
Vishal needs to balance the realities of the present world with the one we're moving into. Infosys isn't IBM - it isn't at the sheer size and scale that it can throw all its eggs into the Cloud basket and take its eye off the ball with its existing business. Infosys needs to keep one foot firmly planted in the reality of today's business, while also developing for the future. While we all know the future is less about effort-based services and more about platforms with distinctive, value-add services, most of today's buyers are still focused on global scale with their global sourcing strategies and that is where the bulk of the money is - and will be - for a few years to come. Even on today's analyst call, Murthy declared that "10% of revenue being product driven in 5 years would be a good achievement", which is statement enough that Vishal needs to place a lot more focus on the 90%. Vishal needs to take a pragmatic view of the pace at which Infosys can really change and evolve - coming up with the big vision is one thing... executing on it is another.
The Bottom-line: The big vision is easy, executing on it is another ball-game entirely
Services firms are so much more than development labs - they are people environments the size of small cities that need very smart management which can manage their costs, while providing great careers for the brightest talent around. Vishal needs to make sure he has the right management under him which knows services back-to-front to create a world class services organization that can support its home-grown disruptive and innovative platforms. He must resist the temptation not to surround himself with yes-men, but with people who can challenge his vision and make sure they are evolving it in the right way to be as competitive as their rivals.
*TWITCH refers to Tech Mahindra, Wipro, Infosys, TCS, Cognizant, HCL