Vishal Sikka quits as Infosys CEO: Hits and misses of his 3-year journey

Vishal Sikka on Friday resigned as the chief executive (CEO) and managing director (MD) of Infosys Technologies, India’s second-largest software services company. While the board of Infosys accepted the resignation of Sikka with immediate effect and appointed U B Pravin Rao as the interim CEO & MD, Sikka has been appointed the executive vice-chairman of the company.

In a BSE filing, Infosys said Sikka reiterated his belief in the great potential of Infosys, but cited among his reasons to leave a continuous stream of "distractions and disruptions over the recent months and quarters, increasingly personal and negative as of late, as preventing management's ability to accelerate the Company's transformation”.

When Sikka had taken over as the CEO & MD of Infosys three years ago, Sikka was prescient in forecasting that automation would take away jobs and clients would shift their investment dollars to newer digital technologies.

The shift, in fact, has been faster and there is pressure on clients spending on traditional services, which Infosys and its peers such as TCS and Wipro earn four-fifths of their dollar revenue from. To address this, Sikka visualised a software plus services model — using platforms to deliver services to bring in more efficiency and reduce dependency on people.

He had set a goal of more than doubling Infosys' revenues to $20 billion, with margins of 30 per cent and employee productivity of $80,000.

This lofty goal broke a cardinal rule – under promise, over deliver – set by Infosys and its founding team led by N R Narayana Murthy over the past three decades.

In turn, this brought about a clash of culture that has dominated the conversation around Sikka’s tenure over the past three years.

Sikka and the Infosys board had admitted that the $20-billion revenue target was impossible to achieve and reset their goals, making them more realistic. Infosys expects single-digit growth this year.

"He (Sikka) tried to focus on the fast growing digital market, however, this strategy has been less successful with competitors such as Accenture and Cognizant being more successful in digital business. The final strategy Sikka has attempted to deploy is to join Accenture in acquiring companies in the fast growing digital market. However, he has been somewhat constrained by his board led by the Infosys founders in executing this strategy aggressively," Peter Bendor-Samuel, chief executive of global IT research firm Everest Group, had told Business Standard earlier.

"The result is that Infosys is now growing at the same rate as TCS on a constant currency organic growth rate, which is better than his (Sikka) predecessor but still well short of market hopes and expectations," Bendor-Samuel had said.

The first non-founder chief executive of Infosys dealt with multiple challenges, both on the business and cultural fronts, given the changing focus of global clients towards digital technology. In his own words, he tried to bring in a culture of grassroots innovation and embrace software across the organisation.

"If you look back in time, when I started, our growth rate has been significantly lower than our peers in the industry, sometimes even one-third of the growth of others, the attrition number was quite high. So, on the basic business performance, there has been a significant improvement, we have performed consistently well among the leading companies... But more than that, what I feel really good about is the transformation in the mindset of the employees, creating a culture of grassroots innovation, embrace software in much wider scale," Sikka had said last month.