In change of heart, NR Narayana Murthy's Infosys likely to choose insider as next CEO

Written by Debojyoti Ghosh | Debojyoti Ghosh | P P Thimmaya | Bangalore | Updated: Sep 2 2013, 19:26pm hrs
InfosysThough Infosys CEO SD Shibulal's term ends only in 2015, the search for next the chief executive is a long-drawn-out process and multiple options are evaluated. (Reutera)
Infosys, which is in the midst of a major management overhaul, is likely to opt for an internal candidate as the next chief executive officer (CEO), keeping aside its plan of scouting for an outsider to lead its over $7-billion operations. The chances of opting for an internal candidate as the next CEO of Indias second largest IT services exporter is becoming stronger as the company plans to maintain the continuity in management rather than disturb this balance, sources aware of the developments told FE.

Quote: Infosys

Though CEO SD Shibulal's term ends only in 2015, the search for next the chief executive is a long-drawn-out process and multiple options are evaluated. Sources said it would be difficult for an external candidate to fit into the companys culture. Any external candidate as CEO will require a minimum of 10 months to understand the culture of Infosys and the company cannot afford such luxury in these times, the source said.

Given the rapidly changing scenario of the global IT industry and competition intensifying, it would be challenging for a company like Infosys to lose time in such management transition. Infosys also faces serious competition from Nasdaq-listed Cognizant, which has overtaken it in terms of dollar revenue growth. Sources said any external candidate will also have to deal with a strong personality like executive chairman NR Narayana Murthy, who has an iconic status in the Indian IT industry.

Earlier, there were reports that Infosys had appointed global executive headhunting firms to scout for external candidates for the CEOs post. It was understood that Murthy had also begun certain informal talks with some of them, though the identity of the candidates was not known.

The option of an internal candidate also takes credence with the developments within Infosys after Murthy returned as the executive chairman from June 1. Since then, Infosys has witnessed three high-level exits, including board member Ashok Vemuri, considered to be a key contender for the CEOs post after Shibulal.

His exit follows that of senior vice-president and head of global sales and marketing Basab Pradhan in July. In August, financial services head for the Americas Sudhir Chaturvedi had quit.

An Infosys official said the decentralisation initiative was Vemuris brainchild and he got support from Shibulal. With Murthy centralising the decision-making and shelving Vemuris plan to give greater autonomy and bring accountability to business verticals, his hands were tied up, added the official.

Earlier, it was understood that the three in the race to be the next CEO were Vemuri, BG Srinivas and V Balakrishnan or Bala. Now, with the exit of Vemuri, the race seems to be between Srinivas and Bala.

In recent developments, Bala has been given greater responsibilities by Murthy, including taking over as the chairman of its European subsidiary Infosys Lodestone, the Switzerland-based management consultancy firm it acquired last year, or leading the price negotiations of various contracts signed by Infosys.

Balakrishnan candidacy for the CEOs post was clearly enunciated when he left the position of CFO in October last year with endorsement from Murthy. He had stepped down from his role as the CFO to shoulder responsibilities in the product platforms, BPO and India business space.

Balakrishnan is an extraordinary individual. He represents the best traditions of Infosys... He has decided to voluntarily give up the CFO position in favour of a younger candidate... just like Mohan (Pai) did in 2006. I have no doubt at all that the nominations committee will look at him (Bala) at the time when they have to choose the next CEO, Murthy said in a statement last year.