Companies around the world are struggling to position
themselves in todays economic environment. Bottom lines
may be strong, but uncertainty about everything from the
outcome of Europes debt crisis to the final shape of
financial regulatory reform is inducing caution. Most CEOs are
wary of making big investments and determined to keep a tight
grip on costs.
Few corporations feel those trends more directly than
Infosys. The Bangalore, India-based outfit is a leader in
providing information technology services to big banks and
multinational companies, a role that puts it at the heart of
the global economy. Annual revenue exploded from
$400 million to $7 billion over the past decade.
Lately, the pulse has slowed, though. Infosys high
market penetration and the cagey attitude of many corporate
clients such as Bank of America Corp., which accounts
for 5 percent of revenue, analysts estimate have
throttled back its once-torrid growth pace. Competition from
fast-expanding rivals like Teaneck, New Jerseybased
Cognizant Technology Solutions Corp. adds to the pressure.
On January 12, Infosys lowered its estimate of revenue
growth for the financial year ending March 31 to 16 percent
from a range of 17 to 19 percent, causing its share price to
plummet 8.4 percent that day. The stock has since recovered.
Infosys Nasdaq Stock Marketlisted American
depositary receipts were trading at $60.10 late last month, up
from a 12-month low of $46.12 back in September but well below
the peak of $77.53 set at the start of 2011.
Sarojini Damodaran Shibulal, a company veteran who stepped
up to the CEO post last April after four years as COO, thinks
going up-market is the way to restore growth. Under a strategic
program called Building Tomorrows Enterprise, hes
focusing on several priority areas, from emerging markets and
digitally savvy consumers to ways of using IT to lower health
care costs and energy use.
Shibulal has reorganized Infosys along its four target
industry sectors financial services and insurance;
energy, utilities and communications; manufacturing; and
retail, consumer goods, logistics and life sciences
rather than along IT product lines. Hes ramping up a new
consulting and systems integration division and seeking to
promote the companys proprietary technology, such as its
Finacle IT platform for the banking industry. The aim is to
make Infosys more of a technology partner to global companies
an Accenture with an Indian accent than a mere
provider of IT outsourcing services, which Shibulal fears are