Client traction won't rise with Murthy's return: Sudin Apte

Sudin Apte of Offshore Insights feels Narayana Murthy's return will boost employee's morale at Infosys and will address one of their issues of high attrition. 

However, client acquisition may not rise, which is a deep-rooted problem and by changing one person it may not get sorted. "Clients don't sign large deals based on who the chairman is. They focus on what value they are going to get, what type of solutions are created and what type of steps will be taken by the company on account management," he tells CNBC-TV18 in an interview. Below is the verbatim transcript of Sudin Apte's interview on CNBC-TV18 Q: What do you make of the decision of NR Narayana Murthy being appointed executive chairman of Infosys after he stepped down in August 2011? A: It is a hugely new thing, one must believe that Murthy was totally out of that company in first place and I did not believed it. He was not operationally, but partially involved. He was chairman emeritus, so he was attending the board meeting and in a way was connected to the company. As far as the broader picture is concerned, Infosys today faces three broad issues. It has a problem on client traction side and gaining business. Infosys has a problem of losing employee trust, its attrition is increasing and it also has spate of problems on legal cases, visa issues, some of them are specific to them, some of them are questions that are posing the industry as a whole. If you look at the change on employee front, this surely will be a booster. Employees will feel that there will be some change. The change in the leadership will bring in some new thought process, possibly growth will come back. So on morale of employee front, it will help substantially to Infosys as a company. On client acquisition and growth perspective, the problem is much deep-rooted than changing one person and so, one has to see how he evolves the new strategy. What new steps will be taken to inculcate client confidence, what additional investments will be made in a client facing rule, so it is too early to say that now from chairman emeritus to chairman executive level, whether one person’s change will change the organisation. Q: With regards to markets and even from a client's point of view, you said the employees will perhaps feel reassured having Murthy back in the driver's seat. But even from a client’s perspective, do you believe this will be something that will at least reassure future potential clients as well as the current clients? A: It will be jumping dance too quickly. I would wait to see how the strategies will change, how the sales and marketing energy will increase. Clients don’t sign large deals especially, not small deals but large deals based on who is chairman. Clients focus on what value they are going to get, what type of solutions are created and what type of steps will be taken by Infosys on account management. One has to see changes there. The good part is if employees are motivated and if employees’ attrition goes down from the current high levels, then it will have a cascading effect on client engagements and client traction. But it’s still too early to say anything. I would wait and watch how it would evolve.