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K.V. Kamath new Infosys chairman
Infosys
Technologies Ltd. Saturday appointed K.V. Kamath its new chairman,
succeeding N.R. Narayana Murthy.
Kamath will take over as the head of the IT bellwether Aug 21 when
incumbent founder chairman Murthy will retire on reaching the age
of 65.
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The appointment of K.V. Kamath, the
non-executive chairman and ex-CEO of ICICI Bank, as chairman of
India's third largest IT company is surely an important milestone
in the history of the company which, not too long back, was the
face of Indian IT exports industry. It was increasingly facing
criticism for refusing to change. Kamath's appointment to the top
job is the explicit response to that criticism. He is the first
outsider to occupy an important position on the Infosys board.
So what should one expect from Kamath? Or a better question still:
from Infosys with Kamath as chairman?
There are two expectations from Kamath. The first is to be able to
fill the big shoes of N.R. Narayana Murthy. With his long-standing
experience, he seems to be the best person available to be the
successor to NRN. He is respected, is known for his values, has
clarity of vision, and has been an institution builder himself. It
is safe to say that to play a "traditional" chairman's role,
Infosys has chosen the best man around. If anything, Infosys could
expect to become a workplace of choice for the fairer sex, if
Kamath's track record in ICICI Bank is anything to go by.
But that is the less challenging part for Infosys as a company.
Even its staunch critics would agree when it comes to corporate
value, corporate governance, and financial discipline, Infosys is
among the best companies in India. Kamath may ensure that it
remains that way, but that is about it.
Where Infosys will be really tested is not whether it remains a
good institution but whether it changes fast enough like some of
its peers have begun to. Kamath has been a risk taker at ICICI
Bank while not compromising on discipline. In a heavily regulated
industry like banking, he almost built ICICI Bank's retail
business from scratch to make it not only India's second largest
bank but as one of the most admired banks globally when it comes
to use of technology to grow. The stories of Kamath's risk taking
are part of Indian banking folklore. As a young officer, he
believed in Dhirubhai Ambani's vision to help him as a banker. As
an organization, ICICI Bank has always been ahead of its peers in
addressing new opportunities.
Infosys, on the other hand, swears by the phrase de-risking. So
much so that, even when revenues have been affected with changes
in external conditions, operating margins have not been allowed to
fall below 28 percent. De-risking is a stated strategy of the
company. If its BPO business is much smaller than peers TCS and
Wipro; if its India business is negligible compared to the other
two tier one IT companies; and if its share of revenues outside
North America is significantly below the other two, blame it on
that penchant for not taking risk. Why, while TCS and Wipro have
done significant number of acquisitions, in India and abroad,
Infosys has not acquired a single company outside its BPO
business, in last five years. The only one it tried to - Axon - it
backed out at the first hurdle.
If Infosys has to really change, it has to take some risk. And in
Kamath, it has one of the most reliable risk takers in India, as
its chairman. If Kamath goes a little beyond a traditional
chairman's role, and gets hands on - as he has always been -
Infosys could silence all critics.
Sources say, Kamath has got clear mandate to be hands-on in at
least in one area: developing the home market for Infosys. Infosys
draws a little more than 2 percent of its total revenue from India
while TCS and Wipro make about 9-10 percent from the home market.
There is a big catch up that Infosys has to do. Kamath's
relationship with most large corporates of India are extremely
strong. Infosys is apparently looking forward to leverage that
relationship. Insiders say that Infosys is looking at targeting a
few verticals including government, banking and retail to start
with. While it already has inroads into banking with its core
banking product, Finacle; now it wants to get newer businesses
from banks as the latter expand their product portfolio. It is
believed that a new senior appointee may drive government business
for the company.
Kamath's experience in ICICI Bank and his proximity to many top
CEOs in Indian business may finally help Infosys achieve its
long-standing dream of tapping the domestic market. A few big
deals may put it on equal footing with Wipro and TCS in the India
market.
(Shyamanuja Das
is the Editor of CyberMedia's flagship publication, Dataquest.
He can be reached at
shyamanujad@cybermedia.co.in)
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