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Infosys Disruption Comes at the Wrong Time for IT Giant

Tuesday, August 29, 2017

The bust up at the top of Infosys has come at the worst possible time for the IT outsourcing giant as pressure mounts for a serious change in the business offerings of Indian IT firms. After the resignation of Mr Sikka, following constant harassment from one of the firm’s founders, Mr Murthy, questions about the future of Infosys are being raised. Pressure was already mounting on Indian IT outsourcing firms as procurement directors look to nearshoring and in-house IT providers as the cost advantage of India has eroded away. Infosys, like other firms such as Wipro and TCS, are looking to invest in more innovative offerings to clients in an attempt to move away from basic offerings, however the recent management problems may damage Infosys’ mainframe-maintenance contracts which act as the firms bulwark in terms of earnings. Infosys, and other Indian firms need to diversify away from the reverence it holds for company founders so as to maintain confidence in their business structure, otherwise their transformation will be short lived.

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