Why Infosys star is fading
Infosys, the most respected technology company in India for several years has started signs of cracking. The myth and aura which was meticulously build around them has started crumbling. Although painful for many, this is just the beginning of the process. My experiences and inputs from various IT and business leaders globally, it was coming out clear that Infosys was doing far too many things which has to have an impact very soon on their sheen. Few years back, I was in the process of getting quotes from various established vendors for partnership in our IT organization as an end user. While every major IT company in India responded and looked serious about the potential opportunity, there was no response from Infosys. It was finally told to us by one of their senior managers that as a policy, Infosys do not do any business in Indian market nor there is any mandate from their management about the same. Therefore Infosys as a company cannot participate in the given business opportunity. It left many of us thinking as to how a company with no national participation can be the most respected Indian company in India. This prompted me to make candid remarks against them in the NASSCOM Leadership forum in early 2009 where I was one of the speakers representing a large Indian business house. It is again a matter of thinking that IBM, being a North American company has bagged largest deals in India amounting in several billion USD. The most notable among them are Bharati Telecom, Vodafone India and Idea Mobile multiyear deals. I am sure, Infosys leadership were not awake from their dreams till then. HCL was quick to realize their mistakes and Vineet did an excellent job turning them around. Wipro is following the suit although very late. Infosys however has been complacent all along and they are going to pay a heavy price for their attitude. My friend in US who had an experience of dealing with Infosys in one of their negotiations commented that there is a vast difference he found in the attitude of Infosys staff and Cognizant teams. While Infosys teams were busy showing the campus and their assets they have build and finally being highly inflexible in negotiations, Cognizant technology teams spend all their time in understanding the requirements and preferred to visit the customers instead of spending time in showing their campus. They were highly flexible on commercials and the deal was done. The arrogant Infosys staffers did not even follow up or attempted to understand what went wrong. The only thing their teams did was to push harder for more work and how they can add more headcount at onsite locations. The good thing about Infosys teams however he commented was that level of customer relationship by account teams which resulted in them being paid premium for their services, but bad economic situation is simply eroding that advantage very fast. Another senior IT colleague of mine in US puts this very simply. Nothing justifies the premium charged by companies like Infosys, mainly when US companies struggles with less than 5% margin and Infosys keeps posting 30% profits year on year. Many companies are looking at options for putting Indian captive companies instead and manage them well to get far better cost and quality advantage. In my opinion, Infosys leadership has been glorified by media and Indian government far more than what they actually deserve. This is high time when they wake up and save their shareholders from the loss which seems almost certain in years to come.