Infy should have listened to Mr Murthy

The Infosys website has a lot to say about the company’s close association with government projects. Sample this: The software major is “proud to be involved in the nation-building journey” and several of these projects are “compelling evidence of our efforts to enable India’s growth story and make it a reality for all its citizens”.

Given the events over the past couple of months, the carefully chosen words may look like a cruel irony. One of India’s marquee companies has been named and shamed by the government repeatedly and that includes tweets by the income tax department stating that the “Ministry of Finance has summoned Sh Salil Parekh, MD & CEO @Infosys… to explain to hon’ble FM as to why even after 2.5 months since launch of the e-filing portal, glitches have not been resolved.”

This came a month after Finance Minister Nirmala Sitharaman tweeted that she hoped “@Infosys & @Nandan Nilekani will not let down our taxpayers…”

It’s anybody’s guess as to why the government went on an overdrive on tweets and press statements against the company and did not talk to it directly about its displeasure over the handling of the new tax portal. It’s an unequal battle anyway as very few, least of all India Inc which has usually crawled when asked to bend, would have the guts to point out the abject failure on the part of government officials in the portal mess. All that Infosys managed to say is it was fully committed to doing all that it took to sort out the glitches. What remained unspoken was the utter failure of the tax officials to ensure adequate trial runs so that the problems were kept to a minimum before a public launch.

There is no denying that Infosys must take a major part of the blame for the problem. Former Infosys director Mohandas Pai hit the nail right on the head when he told Swarajya magazine that companies like Infosys didn’t have the domain expertise in complex matters like income tax as they were technologists. Infosys, he said, also goofed up by not setting the right expectations. They should have gone to the government and told them that an adequate number of chartered accountants should be deployed with the help of ICAI — a move that has now been taken. Infosys also should have put more senior resources to interact with government officials and shown better project management and testing skills.

Points taken. But what about the accountability of government officials who were in charge of overseeing the project? If they could show their nimble-footedness in shaming Infosys publicly, why didn’t they show the same alacrity before the portal was launched? The tax department just forgot the basic thing that when a new and complex system like an IT portal was being set up, adequate trial runs were the minimum that’s required. The other factor in government projects is the lack of ownership, as bureaucrats get transferred regularly.
 

Infosys should have known better as its problem in dealing with the government is nothing new (the company faced similar problems when it was working on the MCA21 and the GSTN projects). This is what Infosys co-founder NR Narayana Murthy said six years ago in an interview to CNBC TV18. Mr Murthy said Infosys and other tech companies did not make any profit on government projects and unless the Centre came up with reasonably attractive and competitive set of clauses, large companies would not be keen on working with it. Highlighting issues such as delayed payments and changes in project requirements mid-stream, the former Infosys chairman went on to add that government projects needed to have clauses at a par with international practices. Infosys should have taken Mr Murthy’s words more seriously.

Other Infosys executives also had gone public in the past with their frustration in dealing with the government. In an interview to this paper, C N Raghupathi, Infosys’ then vice-president and head of India business unit, had talked about how the company was taking a “hard look” at government deals to see if they made sense. The main problem is the buy-in. Even if the top bureaucrats are convinced, they fail to convey that vision to the rank and file, posing execution issues as many of these transformational projects require collection of tonnes of data at the last mile.

Besides, the way the government structures its technology projects is also flawed. For example, most government technology contracts require the vendors to work as a system integrator, which means they have to not only provide the software and services, but also have to arrange the hardware elements, which constitute over half the total project cost. While most IT companies have to pay the suppliers of the hardware upfront, the payment from the government comes many months later.

The short point is that the tax portal problem is a goof-up by both sides, and making Infosys the only villain in the story is quite unfair. Almost two weeks after the RSS-affiliated Panchjanya accused Infosys of being anti-national, Ms Sitharaman was the only government representative to say that what had happened was “not right” and that the two sides were working together to resolve the glitches.

One wishes that a government, which had been talking repeatedly about the need for bridging the trust deficit with industry, had come to the company’s defence much earlier. Infosys certainly deserved better.