The expression was grim, but then, I could have mistaken a sign of determination for worry. I met Kris Gopalakrishnan, managing director of software major Infosys Technologies, at the CNBC-TV18 business leaders’ award function last month. And Kris said, somewhat matter-of-factly to me, “This has been the first zero growth year in the history of Infosys.”
Consider the irony. He said this an hour before his company received the “Most outstanding company of the year” award at the function. To the naked eye, that might seem like a travesty. But I do believe there are reasons to smile for Infosys.
This year saw the worst recession in the US since the Great Depression of the 1930s, and the cause for this slump were precisely the giants like Lehman Brothers that collapsed last year as the biggest symbol of the financial meltdown that rattled the world. Besides Lehman, Infosys counted among its clients Bank of America, and Merill Lynch, the company the bank swallowed in a rescue effort.
Given that all three stressed-out financial giants were its clients, one would have expected Infosys to get a fever, but you can say now that it has got away with a cold. Zero growth is not the same as a fall in revenues or profits. Also, the company managed to honour all the offer letters to campus recruits and avoided layoffs.
It is vital to realise that software services of the kind Infosys offers are not products, but involve two-way human involvements. The company needs to maintain relationships with clients, and at the same time sound attractive and reliable for high-skilled software engineers to retain its image as a good employer.
I think the zero growth year that involved dealing with a punch in the solar plexus of its most lucrative customer segment, the BFSI (banking and financial services industry) marked the most challenging year yet for Infosys. In the past, it has seen a telecoms and an Internet meltdown and also the 9/11 attacks that made the US vulnerable, but no year has been so tough for the software darling.
Besides, this was also the year of the Satyam scandal that rattled –at least for a while – the image of Indian companies as clean players in corporate governance. Infosys survived all that and is now out to recruit again. Sometimes, guarding your reputation in a tumultous year in itself constitutes a big success.