Narayana Murthy seeks 3 years to reshape Infosys

N R Narayana Murthy who made a comeback as chairman of Infosys two weeks ago, today said the task of rebuilding a ''desirable'' Infosys may be daunting and could take a minimum of three years.

Addressing the 32nd annual general meeting of the company in Bangalore today, Murthy said, "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."

Murthy who had retired from executive role seven years ago and as head of Infosys in August 2011, was reappointed chairman of Infosys replacing KV Kamath during whose tenure the company's earnings plunged and shares slumped 15 per cent.

Murthy also brought in his son Rohan Murty as his executive assistant, clearly admitting that the task ahead is daunting and that without young blood and new thinking he too may be disappointing investors.

Infosys, he said, would take at least 36 months and there would be some tough decisions resulting in "pain."

Murthy sought the shareholders "understanding, support and encouragement in this exciting and rewarding journey of the next three years."

Murthy admitted that the company's focus on the third revenue stream was blurred and it would need to refocus on winning large revenue-yielding outsourcing projects in the short-term while also ensuring accelerated revenue earnings from tried and tested streams.

The first two revenue streams consisting of consulting-led and the technology-led end-to-end solutions offer higher margins. He proposed delinking the third stream of intellectual property-based solutions from revenue efforts for the short-term.

Murthy said the company would shift focus to intellectual property-led third revenue stream in the next three to five years to enhance its win ratio in large outsourcing deals.

"Such 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 downslide," Murthy said.

He said the current discussion on the new immigration bill in the US was both an opportunity for innovation and a challenge for growth and he would like every Infoscion to see this as an opportunity.

Murthy also promised investment in productive businesses that would yield the desired results and enhance respect for the corporation from its shareholders.

"We will divert the saved funds towards some of the productive investments needed to make Infosys the market leader," Infosys will make its sales force more effective by improving the he said, adding the company would also boost its sales talent and incentivise sales force.

"We will adopt a flexible pricing policy to enhance our growth rate.

"The company will innovate to improve the quality and productivity of our software development teams to deliver even better value to our customers. We will use such innovations to improve our margins even in the most competitive and commoditised businesses," he said.

Infosys has already announced salary hikes for all eligible employees, which is seen as the first concrete step that the company has taken since the return of Murthy to an executive role.