Business Software

Infosys Appoints Banker as Chairman, Shortens Name

India's second largest outsourcer, Infosys Technologies, has announced a change of leadership, choosing for the first time as its chairman someone who is not one of the founders of the company.

Kundapur Vaman Kamath, currently an independent director on the company's board, will become chairman of Infosys from Aug. 21, the company said on Saturday.

The board also decided on Saturday to rename the company Infosys, dropping the word Technologies from its name to reflect the company's focus on business solutions.

Even with the planned change of chairman, control of the company still remains with the company's founders, according to Sudin Apte, principal analyst and CEO of Offshore Insights, a research and advisory firm in Pune, India. "It is by and large the same people in charge," he said. "In that sense, they have ensured continuity."

Infosys has recently lagged behind other Indian outsourcers such as Tata Consultancy Services and HCL Technologies, which posted stronger revenue and profit growth in the last financial quarter. The company is risk-averse and not aggressive enough in the market, analysts said.

Kamath, a banker by profession, is non-executive chairman of ICICI Bank, a large Indian bank. He will replace N. R. Narayana Murthy, a high-profile co-founder of the company, who after the management reshuffle will move to the position of chairman emeritus.

Murthy was the first managing director of Infosys when it was founded in 1981, and has been regarded as the driving force behind its success.

As a top banker, Kamath brings strong knowledge of the variety of businesses that banks usually do business with, Apte said. Outsourcing decisions are increasingly being taken by clients at the level of influential steering committees that include, apart from the CIO and CFO, business leaders who are concerned about business results, he said. Kamath is more likely to be able to present to clients the business case for offshoring to Infosys, Apte said.

The founders of Infosys, however, remain largely in charge of the company. Under the new arrangement that comes into force in August, CEO and managing director S. Gopalakrishnan will move to the post of co-chairman with executive powers, and his place as CEO and managing director will be taken by chief operating officer S. D. Shibulal.

The change in leadership at Infosys does not address the urgent need for the company to move quickly to adopt new engagement and pricing models, Apte said.

Infosys senior vice president Ashok Vemuri, global head of the company's banking and capital markets practice, said last month that the problem is not that the company has been slow in changing to new business models. However, customers are still evaluating the new ideas for engagement and pricing models, and have sometimes rejected them, he said.

John Ribeiro covers outsourcing and general technology breaking news from India for The IDG News Service. Follow John on Twitter at @Johnribeiro. John's e-mail address is john_ribeiro@idg.com

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