Turning a Giant Around

The following article is based on my own interpretation of the said events. Any material borrowed from published and unpublished sources has been appropriately referenced. I will bear the sole responsibility for anything that is found to have been copied or misappropriated or misrepresented in the following post.

Abhishek Barui, MBA 2015-17, Vinod Gupta School of Management, IIT Kharagpur

 

Vishal Sikka led Infosys came up with a stellar set of numbers for the fourth quarter running when they beat street estimates yet again. During the fourth quarter of fiscal 2016, Infosys’ top line grew by 1.6% and its operating margin improved by 50 basis points to 25.4%, bettering expectations. The company announced a final dividend of Rs 14.25 per share. Revenue growth in 2016-17, it said, would be in the range of 11.8-13.8%, compared to Nasscom’s projection for 10-12% export growth for the industry. What was really heartening to see, was Infosys’ forecast for the coming fiscal in the midst of decresing IT spends by leading multinationals.

Sikka, who is regarded as the architect of SAP’s best-selling in-memory database software HANA, has been attempting to reengineer Infosys around the themes of innovation and a focus on the customer. His so-called ‘Renew and New’ strategy appears to be paying dividends. While the pace of growth has picked up, employee attrition levels are down, and the stock markets are showing their faith— Infosys shares have risen by 44% on the NSE since Sikka took over.

Sikka has been advocating what is known as ‘Design Thinking’ which involves a user-centric problem-solving approach, and embracing automation to reduce costs and improve efficiency. He has attempted to balance the twin demands of building revenue momentum while positioning the company to cope with changes brought on by technologies such as cloud computing. Additionally, he has also changed many HR policies such as wearing business casuals to work, to make Infosys an employer of choice.

Sikka’s devising of strategy with a focus on longer time horizon is starting to turn around Infosys and making it a darling of the D-Street yet again.

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