As was being speculated recently, Indian technology major Infosys announced Thursday Vishal Sikka will take over as CEO and MD of the company with effect from August 1.
The Economic Times of India had been pimping this story for weeks, claiming it was a done deal. Opinion among my colleagues was divided. Some thought it was BS, those who know the Indian media rather better were convinced the story was true. Me? I couldn't see it. Again from MoneyControl:
Reacting to the news of the appointment, former CFO V Balakrishnan said he hopes Sikka will be able to meet the challenge of turning around Infosys. “Sikka has been a products man but the whole services business is changing too, and becoming more product-oriented with respect IP, etc.”
This must be what the Infosys nominations and governance committee was thinking at the time of making the selection. One veiled clue comes in the formal announcement where Sikka said:
I look forward to working with and learning from talented Infoscions around the world. Computing technology is reshaping every industry across every walk of life. We, at Infosys, have a unique opportunity to deliver breakthrough solutions that will bring greater value to our clients, employees, investors and other stakeholders.
[My emphasis added]
However, there are many questions about this appointment.
Sikka has little operational experience of running a services business. Does that make this a strange choice? At one level - yes. Infosys has 160,000 employees, most of whom are engaged in services related activities. However, the traditional Indian based services business in general is in decline. The demand for ERP implementations in particular is maturing and the constant ratcheting of staff rates is driving many customers to rethink their implementation and sourcing strategies.
Sikka will need to take counsel from the finance teams able to parse his plans and figure out a course that will allow a transformation of the business without running it aground.
Sikka has one important card he can play in the short term to shore up that business. His deep HANA experience can be leveraged for implementation purposes but that will require some very rapid fleshing out of expertise among the rank and file. He cannot be hip deep in those implementations AND run a company of Infosys size. It would not surprise me to find that certain people currently within the SAP orbit jump over to Infosys. He still has a lot of friends there who were genuinely saddened and shocked at his sudden departure.
Sikka is also a very fast learner, one of the fastest I've ever met. He will have picked up many invaluable lessons from his time in SAP leadership that can be put to good use as he settles down to business in his new role.
The good news is that as part of the announcement, Infosys is effectively gutting its board of tenured personnel and hangers on. This should give Sikka the one thing he could never get at SAP - his choice of lieutenants and enforcers. The degree to which he chooses wisely will be closely watched.
The other good news is that the market seems to like this appointment. Following the announcement, the share price popped one percent in early trading on the Mumbai exchange.
In the meantime I wish Sikka well. As someone who came to know him reasonably well during his time at SAP and with whom I spoke on several occasions around the time of his departure, I can see how he will have a decent period of grace before the financial analysts insist on a return for their investment in him. He will need it. In fact he already as it in some measure since he comes on board 14th June but only as CEO in waiting. that gives him six precious weeks in which to get the bones of a leadership team around him that he can trust to do the short term heavy lifting.
Infosys has become something of a basket case and rejuvenating what was once a pioneer comes with enormous challenges. If he succeeds, then the rewards will be fabulous.
In the meantime, there is an analyst call in about seven hours so more on this later.
Update: Vijay Vijayasankar who worked under Sikka piles on in similar vein:
Vishal is not a services sales guy, and he is not an operations guy. But he is terrific with customers and he knows the who is who in technology and is close to many CXOs at customers . So yes, this could work very well for Infy if he builds a team around him that knows the services business well, and has operational excellence. It also helps him that most of the current infosys leadership team is stepping down before he takes over. Vishal gets a clean start – much like Bill McDermott got a clean start at SAP with a new(ish) team . Win or lose – its on him now. No pressure, eh? :)
But then leadership team can only do so much – it is on the infoscions rank and file to make the shift to an innovation agenda. Vishal moves at a speed that is hard to keep up with, and he is not exactly a process oriented dude – I know that first hand. So my suggestion to infosys employees is to get some rest while you can, and then be ready for a wild ride :)
Bonus points - here's a video Jon Reed and I shot at SAPPHIRE with an Infosys customer on SAP technology: