Infosys turnaround will take 'three years'

Chairman N.R Narayana Murthy said shareholders will endure pain over the next three years as he looks to rebuild the company into a "desirable" entity with a strategy that focuses on winning big-bang outsourcing projects.
Written by Mahesh Sharma, Correspondent

Infosys Chairman N.R Narayana Murthy told shareholders it would take three years to rebuild the outsourcing company back into a "desirable" entity.

Recovery process will be involve "tough decisions resulting in pain".

The Times of India reported on Saturday that during Infosys' annual general meeting over the weekend, Murthy warned shareholders they would have to endure "pain" during the recovery process. "The task of rebuilding a desirable Infosys will take at least 36 months, even with a high quality team and full dedication of every Infoscion.

"In the process, there will be some tough decisions resulting in pain as we move forward," said Murthy, who is Infosys co-founder and was reappointed as executive chairman earlier this month to lead the company's turnaround.

He said the recovery will involve winning more big-bang outsourcing projects, or what he described as the "third revenue stream" which delivered mixed fortunes over the past two years. The company will also accelerate progress in its first two revenue streams--consulting, and developing IP (intellectual property) for customers.

"Such extra focus on commoditized businesses has the potential to accelerate our revenue growth while reducing our margins. I want you all to be aware of the downslide," Murthy told shareholders.

He also said the company would adopt a flexible pricing model, develop software products to increase efficiency and boost margins, and refocus on building a more predictable earning model, in the medium-term.

Editorial standards