Bangalore: Infosys co-founder and executive chairman N.R. Narayana Murthy said Saturday tough decisions would be taken to rebuild the global software major, which would take at least three years.
"The challenge is daunting and the task of rebuilding a desirable Infosys will take at least 36 months. In the process, there will be some tough decisions resulting in pain as we move forward," Murthy, returning to the helm in the top executive post, told shareholders at the company's 32nd annual general meeting (AGM) here.
Admitting that the company had gone through challenging times, Murthy said during the last two years, the focus got blurred on winning highly-competitive, large revenue-yielding outsourcing projects.
"The strategy is to focus on opportunities from consulting-led end-to-end solutions, leveraging technology for higher margins, developing intellectual property-(IP) based solutions to delink revenues from effort," Murthy said.
Noting that the company historically relied primarily on projects involving application development, maintenance, testing, BPO (business process outsourcing) and infrastructure management, Murthy said the business had become commoditised in recent years.
"Our desire has been to ensure revenue growth while maintaining decent margins. We have to re-focus on this, which is our bread and butter business in the short-term while ensuring that we accelerate our progress in the first two streams in the medium to long term," Murthy said in his address to about 1,000 investors who attended the AGM in person and hundreds through web-casting of the proceedings.
Promising to dedicate fully and wholeheartedly to the task on hand, he said the need of the day was to focus on employees, take quick, tough and firm decisions, communicate the decisions with clarity, and execute them with speed, imagination and excellence to exceed expectations of customers and investors.
"The company is committed to refocusing on winning large revenue-yielding outsourcing projects to enhance our win ratio in such deals. Extra focus on commoditised businesses has the potential to accelerate our revenue growth while reducing our margins. I want you all to be aware of the downside," Murthy reiterated.
Observing that executing the new strategy would require him to change some of his long-held beliefs, Murthy quoted Sir Winston Churchill (former British prime minister) words that improvements require change and the quest for perfection required to change often as necessary.
"We will make our sales force more effective by improving the quality of sales talent, provide them with incentives and every resource needed. We will adopt a flexible pricing policy, where absolutely necessary, to enhance our growth rate," Murthy added.
Earlier, outgoing chairman K.V. Kamath said Murthy would provide strategic direction to the company at this point of time.
"Murthy, who has consented to be executive chairman again, will guide the company when the industry is facing challenges of an inflexion point in the technology business and provide strategic direction at this point of time," Kamath told the investors, chairing the AGM on the request of Murthy.
Kamath said Murthy's entrepreneurial and leadership record coupled with his long experience as a technology pioneer made him eminently qualified to lead Infosys again.
In an emergent meeting June 1, the company's board had appointed the 67-year-old Murthy as executive chairman for the next five years to steer its fortunes in these challenging times.
Retiring from the company in August 2011 as non-executive chairman on attaining 65 years, Murthy become the company's chairman emeritus for life. He was the company's chief executive till 2002 since inception in 1981 and chairman till 2007.
"Murthy has always been proactive in his leadership as one of the key figures in shaping the future of our industry. I am sure we will again see an Infosys which is proactive in everything it does as an industry leader," Kamath asserted.
Noting that employees were the soul of the company, Kamath lauded them for their performances, driven by commitment and perseverance.
Later, the shareholders unanimously approved the resolution appointing Murthy as the executive chairman for five years and as a director on the company's board again.
But Murthy's return to the helm abruptly cuts short the five-year tenure of Kamath who will be a lead independent director on the board.
The meeting also endorsed Murthy's request to have his son Rohan Murthy as his executive assistant in the chairman's office during his tenure.
Rohan's appointment will be co-terminus with that of his father's tenure for five years.
As Murthy's only son and a blue-eyed boy, 30-year-old Rohan will take a sabbatical from Harvard University in the US where is a junior fellow in the Society of Fellows to assist his father in the chairman's office.