Narayana Murthy Returns to Infosys as the Firm Attempts To Accelerate Its Turnaround Effort

0

Infosys announced over the weekend that N.R. Narayana Murthy, one of its founders, is back with the company as its executive chairman. This is Murthy’s second stint with Infosys, having served as its CEO from its inception in 1981 until 2002 and as its chairman from 1981 until 2011. Given Infosys’ string of poor results under CEO S.D. Shibulal, questions were frequently raised about his continuance in the role. However, the odds of Shibulal stepping down or being replaced were considered slim as it is widely perceived that the company wanted to give all of its founders an equal chance to run it.

Under these circumstances, we aren’t completely surprised by Murthy’s appointment. Given Murthy’s extensive experience and his track record with Infosys, we like his addition to the executive management team. Despite coming in as executive chairman, we expect Murthy to have his hands full and become actively involved in the company’s management from now on. We think the mandate for Murthy is very clear–take the company back to its glory days. Infosys is no longer considered as the bellwether of the offshore IT services industry and it recently ceded its position as the second-largest offshore IT service provider to Cognizant CTSH .

Analysts don’t expect to see any major changes to Infosys’ longterm strategy, which, in our opinion, is very sound. Given the increased commoditization of the legacy application development and management services, Infosys’ plans to move up the IT services value chain should help it over the long-run. In the near term, we expect Infosys to sort out its go-to market strategy and its pricing issues, and Murthy’s appointment could accelerate the firm’s turnaround.

 

Suggested Reading: Most Popular Video Games of All Time

Share.

Leave A Reply