Everyday, Infosys is in news – rather negatively! What has triggered with missing revenue guidance, is not stopping for a moment. Be it Projecting its single digit growth, visa row and related legal suites, early signs of challenges in recruitment and consistent criticizing by financial or industry analysts (and its heavy reporting) – the list simply is never ending.
To assess where Infosys is heading, I tried to analyze the situation from multiple perspective. We surveyed 82 Infosys clients including 40+ strategic accounts ( We even spoke to over 60 TCS, 50+ Wipro and 40+ Wipro clients) in our latest survey of over 300 offshore clients. We also spoke to over two dozen current and ex-employees (mostly senior and/or long term), debated with select financial analysts and industry experts. Here are few key pointers that this exhaustive study has thrown up:
- Clients are sympathetic about Infosys, but now have some concerns. Infosys is one of very few Indian firms who traditionally enjoyed huge client confidence. Several of them literally, take pride in being Infosys clients. Even today, we find Infosys, compared to its several peers, enjoys a special position. However, our latest study as well as our earlier client studies show growing chorus of client dissatisfaction. Pricing rigidity, lack of flexibility, difficult contract discussions, smaller teams (than what client expects) managing accounts, limited investments in sales and marketing, lack of proactive account mining and frequent changes in account teams are some of common issues we heard.
- Clients are waiting for Infosys’ clarifications on carpet bombing by media and competition. Nearly half clients we spoke to claimed, everyday they are bombarded by negative news about Infosys. They know their seniors and colleagues from commercial functions (sourcing/procurement/finance) also get same dope. But they find very less information from Infosys side. Several clients claimed, they suggested their account managers to feed them with appropriate information so clients can support their case. However, many clients told us, they could not get much data from Infosys; instead got stereotypical replies like, we don’t comment on media stories, visa matter is in courts so we cannot comment, and so on.
- Our inquiries indicate Infosys staff getting de-motivated and frustrated. One employee told us that every discussion these days – whether in family, in social setting, and even in week end parties – essentially starts with “what’s next problem at Infosys”. Several others expressed similar views and added; every time they face such conversation or read a media story they wonder where company is heading. Our interactions have also indicated that employee noise is growing in several internal platforms. Long term employees confessed they still don’t see light at the end of tunnel. While I must say that this point is based on 32 interactions and one can argue that it is just a sample size. But almost all these interactions showed uniformity in replies and raised common points. Further, if we dovetail this early trend with other emerging trend of Infosys, no more enjoying coveted position in recruitment (especially campus), then it surely indicate signs of what is coming.
Why is this happening and who’s responsible? That is a tough call, but let me say what is not responsible for most of these issues:
- Surely not economy and squeezing IT budgets. Clients still like Infosys and are open to give more business if, they can address their new concerns and showcase client facing investments
- Not visa row (at least as yet) that is catching media attention. Clients are indeed curious to know what’s happening on legal front and how it is evolving. At least at this stage, we did not find any clear trend that indicates clients divorcing from Infosys or even thinking on those lines. Yes, they are looking for more information to come (which is not happening) from Infosys so they are aware.
- Not even competition. Our research interactions still show that clients are not playing into competitors’ hands. They want to give opportunity to Infosys to explain their side and continue showing value and delivery high quality service.
I think most challenges facing Infosys today are internal. Be it continued organizational changes, lower pace of adapting to changing market reality and expectations, or loss of some of senior and old-time executives. We believe that this saga is still on… Expect some high profile exits, rise in attrition and couple of more rounds of org restructuring, and growing client concerns. Let’s hope Infosys fixes these loopholes quickly and permanently. Remember, damage to Infosys brand for wrong reasons shadows overall Indian outsourcing story.