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Infosys founder plays down top management exits; focuses on innovation

Infosys founder plays down top management exits; focuses on innovation

11:08am EDT

By Lehar Maan and Soham Chatterjee

BANGALORE (Reuters) – Infosys has enough senior managers to run the business even if more executives leave India’s second-largest IT services exporter, its founder said on Saturday, after a spate of staff exits triggered concerns about a leadership vacuum.

N.R. Narayana Murthy played down the departure of at least 11 senior executives since he was brought back from retirement in June last year to help regain market share, saying some of them were low performers.

Infosys has for the first time picked an outsider Vishal Sikka, former senior executive at German software company SAP AG as CEO, as it seeks to boost sales of high-margin services and stem a staff exodus. [ID:nL4N0OT0Z3]

“We are confident that we have enough budding leaders to handle any eventuality of some more people leaving us,” Murthy, who stepped down as the chairman of the company on Saturday, told an annual shareholders meeting.

The annualized rate of attrition at Infosys – the number of staff leaving or retiring – was a record 18.7 percent at end-March, 2.4 percentage points higher than a year earlier, out of a workforce of more than 160,000.

The departures included at least 11 top executives, some of whom were responsible for key business sectors at the company, which was founded by Murthy and six other engineers in 1981.

“Some had been identified as low performers by the external evaluation agency and the board. Some were evaluated to be low performers by senior management,” Murthy said, playing down concerns of the management exodus on the company’s growth.

SILVER BULLET

Infosys, a pioneer in India’s $100 billion-plus outsourcing industry, was taking several steps to bolster innovation and tap new technologies, as “commoditisation” of the company’s core IT outsourcing business increases, Murthy said.

Infosys, like its local rivals Tata Consultancy Services and Wipro, has relied for decades on labour-intensive, low-margin contracts from Western clients including Citigroup and BT Group Plc.

“The silver bullet for this company and this industry in the medium to long term will be how much of what we do today can be done faster and cheaper by employing intelligent software agents,” he said.

Infosys shareholders are betting on Sikka, who will take over on Aug. 1 from current CEO S.D. Shibulal, to turnaround the company by tapping opportunities in new technology areas including cloud computing and mobility.

Sikka, 47, is considered to be an innovator in the global software industry. A computer scientist by training, he was key in developing and marketing SAP’s flagship product, HANA, which helps firms analyse large amounts of data quickly.

 

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About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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