Infosys to split into smaller units to expand business

29 Aug 2016


Infosys has decided to split its business into smaller units, which will be managed by the company's next rung of management, as part of its efforts at ''zero-distancing'' from its clients.

The Bengaluru-based company, which saw an exodus of top management after Vishal Sikka took over as CEO, which saw responsibility concentrating in the hands of its presidents, is making a move to reverse the trend.

ManishTandon, who was in charge of healthcare, insurance and life sciences portfolios, was the latest casuality.

Besides helping to nurture talent, a splitting of business portfolios will help Infosys keep close tab on clients.

Last Friday, Sikka said he was breaking up the company into smaller, more autonomous units with PNL (profit and loss) responsibilities. Infosys at one time had 23 units with small-time CEOs heading them.

Infosys declined to specify the number of units the company would have after the split comes into effect or who will bead what.

"It gives us scalability, it gives us isolation and accountability of individuals," Sikka told analysts at its analyst event in Pune.

Analysts expect the units to have revenues between $500 million and $700 million each, with a handful to a couple of dozen clients. This would help Infosys tailor solutions to the needs of the various clients.

Infosys also hopes to nurture several start-ups by splitting business and giving each business unit freedom to innovate, given their agility and fascination for technology.

''Unburdened by corporate boundaries of ''the way we've always done it,'' they push, challenge and disrupt. They understand and solve an important problem well -or perish,'' Zikka said.

But Infosys is no longer a startup, nor are most of its clients. So innovation would mean being close to the client ''Our answer is Zero Distance: a ground-up, grassroots approach to ensure that every developer, project manager, analyst and architect is at ''Zero Distance'' – to the end user, to the underlying technology and therefore to the value. Whether working side by side with the customer's customer or thousands of miles away, each of us must close the psychological distance and become personally invested and empowered to find the right problems and even better solutions,'' Zikka added.

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