Inducted Rohan for his open mind, NR Narayana Murthy says

Infosys chairman NR Narayana Murthy.

BANGALORE: Infosys chairman NR Narayana Murthy said he had asked his son Rohan Murty to join his office because he wanted someone with an open mind.

"I wanted someone with an open mind, somebody who brought the finest ideas in computer science, somebody who has distinguished himself as a stellar academician to come and help me in improving our software delivery effectiveness. That is why I invited Dr Rohan Murty to come and join my office in terms of delivery effectiveness," Murthy told a global investor conference organized by brokerage house Motilal Oswal on Tuesday, transcripts of which are available on the company website.

The use of the words "open mind" appears to suggest that Murthy himself is becoming more open to the idea of inducting external candidates to key positions. Infosys traditionally has had a culture of grooming candidates from within, a culture that has been criticized by analysts ever since the company started falling behind rivals on growth parameters.

Rohan Murty's induction has met with a lot of flak. Most recently,HDFC Securities had noted that designating him as vice-president of Infosys "diminished the halo around Infosys's corporate governance standards". At the time of his induction, Murthy had justified the move saying, "The quickest and the best way of my being effective (in his role as chairman) is by utilizing the competencies of a strong team of people that I have been interacting with in the last 2-3 years. One of them happens to be my son Rohan."

At the analyst conference, Murthy also noted some new trends he had observed during the three months since he had rejoined Infosys. He said the company's competitors had pushed the markets to become highly price competitive. Consequently, he said, the company had moved to the adage "the market determines the price and the company determines the cost."

Analysts have observed that in recent times, Infosys has been pricing aggressively to win contracts. But since the company has always had a high-margin strategy, lower pricing necessitates lowering costs to maintain margins. Murthy said, "We are looking at eliminating unnecessary costs, we are doing location optimization, we are putting the right people in the right job, in other words we are focusing even more on meritocracy, and we are reducing the on-site-offshore ratios so that we can indeed enhance our margins."

He said the sales team was being reinvigorated, and was being enabled with better systems, better training, better processes and better metrics to make them more effective. Sales people are also being incentivized for delivering the kind of growth the company wants. "In other words, we are focusing on pay-per-performance," he said
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