The first sign that Infosys was dismantling the structure created by its former CEO Vishal Sikka came in October. One of Sikka’s pillars of growth was to be acquisitions and Infosys would spend as much as $1.5 billion in buying companies. However, his biggest buy–the $200 million acquisition of Israeli firm Panaya–turned out to be his undoing.
Because IT companies were not greatly acquisitive in the past, the lack of consistent M&A and integration skills was never a great concern. Double-digit growth was a matter of course and deals were there for the taking as multinational players like IBM, Accenture and EDS struggled to compete with the India offshore advantage. “The organisational DNA of Indian IT services companies has largely been about cost arbitrage and not about scale and capabilities. Unlike an Accenture, it may have taken their focus away from capability building,” said Sanchit Vir Gogia, CEO at Greyhound Research.
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Sanchit Vir Gogia: Sanchit is the Chief Analyst, Founder & CEO of Greyhound Research, an award-winning global research & advisory firm. To read more about him, click here.