Infosys's new CEO may only need to deal with its realpolitik to get a free hand

Salil Parekh clearly has the CV for the top job at the iconic IT company. His career shows he may also have the skills needed to keep all constituencies happy

Harichandan Arakali
Updated: Dec 5, 2017 01:23:06 PM UTC
BANGALORE, INDIA JANUARY 6, 2012: Salil Parekh, CEO of application services businesses of Capgemini, photographed during an interview with Mint. (Photo by Hemant Mishra/Mint via Getty Images)

By all accounts, Salil S. Parekh, CEO-in-waiting at Infosys, played a stellar role in helping Capgemini SE become pretty much the only large European technology services company to successfully tap India as a base of operations at global scale. He was therefore reportedly in the running for the top job at the French IT company itself, where he is currently CEO for UK, north America and Asia.

He may also have lost out to Vishal Sikka in 2014 for the CEO role at Infosys, according to a report by the Economic Times in India. Well, he’s got another shot at the job now, after the Bengaluru company confirmed over the weekend that he will join it as CEO and MD on Jan. 2.

Parekh’s CV is just as impressive as Sikka’s, albeit in different ways. His background in consulting, at the multinational accounting firm EY, where he was a partner in India, makes him well suited to whisper in the ears of his soon-to-be-clients CEOs at most of the world’s biggest corporations.

One other crucial skill his career suggests he possesses, may be that he could be, at the end of the day, better at taking along every constituency involved at Infosys. And that could make all the difference by earning him the free hand he’ll need to return 200,000 Infoscions to stability and onto the path of industry-leading growth.

By the time Sikka quit Infosys, no one of any consequence doubted or questioned his AI evangelism and the related initiatives he had set in motion at the company that clearly seemed to be working. “It has become a part of who we are,” COO UB Pravin Rao himself has said more than once. Therefore, what Sikka needed, but lost, was the support of the one constituency that eventually proved too powerful to treat as just minority shareholders – the founders, and in particular, NR Narayana Murthy.

Murthy’s campaign on “governance deficits” at Infosys – involving a large pay out to a former CFO, and the suggestion that it was related to an acquisition the company made – ended only with Sikka’s leaving. There were even multiple independent investigations of a whistle-blower’s allegations – which Murthy had raised to support his concerns – which concluded that Sikka and the then board of the company, led by Chairman R Sashayed, didn’t do anything wrong.

Even Nandan Nilekani, the co-founder who has returned as non-executive chairman has said he fully agreed with the findings of the investigations. Therefore, we may not really know exactly what transpired that set Murthy dead against Seshasayee and Sikka. And Murthy’s influence eventually proved strong enough to effect a change of guard at the company.

This is the scenario that Parekh inherits. He will be only the second career professional to take on the top job at Infosys, which until Sikka was run by one or the other of the original founders – for more than three decades. And the year-long fight between Murthy and the former board and Sikka has definitely cost Infosys time, and certainly market value for investors.

In comparison, Tata Consultancy Services continues its steady growth, Wipro is showing signs of getting its own mojo back under Abidali Neemuchwala, and US-based Cognizant Technology Solutions has surged ahead with billion-dollar-plus acquisitions.

On the business front, Parekh no doubt will have able colleagues to help him run the company, including the extremely down-to-earth and unflappable Pravin Rao. A few other factors may also help, such as Parekh operating from India, rather than from the US. On the Murthy front, Nilekani’s active full-time involvement should certainly help.

There is no dearth of rumours where Infosys is concerned, including that the founders will eventually sell out and a large PE firm will probably buy in. Thing is, even in the three years he got at Infosys, Sikka did return the company to industry-level growth, although an ambitious plan to get to $20 billion by the year 2020 was jettisoned even before he left.

Parekh may have a chance to see Infosys touch that number if not in 2020, then a couple of years down the line. It would be a shame if this experiment too failed for reasons other than free-market competition.

The thoughts and opinions shared here are of the author.

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