Sarojini Damodaran Shibulal, the 57-year old CEO of Infosys, is a true geek. His favourite pastime is to pull apart gadgets and put them together again. At home, he is the official technician who fixes and installs all things electronic.
While Shibu, as he is known, cannot do the same thing with Infosys — much as he would love to — with the Lodestone acquisition, he is at least attempting to put the company back onto a growth trajectory.
The last among the six founders of Infosys, Shibu will retire in 2015 at the age of 60. Before that though, he is busy laying a road map that aspires to make his successor’s job easier. He is also getting the company ready for a final transformation, from being a promoter-driven company to a professionally managed one.
A native of Alleppey, Kerala, and the only child of his parents, Shibu is often described as an execution specialist, unlike his predecessors, who were hailed as visionaries. A shy person, Shibu has always managed to stay away from the limelight, but, has grown with the company and is perhaps the only one in the leadership cadre who has worked across functions.
With the acquisition of Lodestone for $349 million (Rs 1,932 crore), Shibu has pulled off one of the biggest acquisitions in the history of 31-year old Infosys. He is also in a hurry to change the way people think about the company. As he stated in a media address, “It’s time you started delinking the word conservatism from Infosys.”
He is certainly taking his own words seriously. Immediately after Lodestone, Infosys BPO’s US arm, too, announced the acquisition of Marsh, the BPO unit of Marsh & McLennan. Shibu has stated that the company is comfortable in splurging 10 per cent of its revenue, around $700 million, for the purpose of acquisitions. Infosys has a cash kitty of around $3.7 billion.
More From This Section
Neither of these acquisitions is big, but, they all fit into Infosys’ 3.0 strategy. Analysts, however, are divided on it — some look at it as a long-term play while others say that perhaps it is too little too late. Especially so, since Lodestone seems to resemble Axon, which Infosys had tried to acquire in 2009.
Yet, Shibu is undeterred by such comparisons. “There is no value in looking in the past. Looking at the future, this company represents 750 consultants who are world-class and is a leader in the management consulting business. It is focused on continental Europe. We will have 10,000 people in SAP ecosystem delivering about $1 billion in revenues,” he said.
Composed, quiet and very confident is how Narayana Murthy, co-founder of Infosys, had described Shibu as he took over the role of steering the company last year. True to these traits, Shibu has taken all the criticism in his stride.
But, if acquisition is the key to its immediate future, Infosys will have to focus on one more crucial aspect—integration. Cindy Carpenter, research vice-president at HfS Research, in her analysis of the recent acquisition, makes a relevant point. “Management consulting firms are usually seen as poor acquisition targets, because the assets go home every night. If they’re not happy, they can usually find plenty of opportunities elsewhere, and the value of what you’ve bought may decline very rapidly. This goes double when the acquiring company is in another country from the acquiree,” she writes.
This is crucial, as Indian IT services firm are generally structured and hierarchical. Shibu will have to walk two lines: One, to make sure that these consultants get enough freedom; and two, to make them understand Infosys well enough to be able to generate more business.