Infosys: Re-igniting Growth

For infosys, the last few years have been about focusing on innovative growth. With the rapid changes taking place in the information technology world, Infosys is now focusing on transformation of its business. While it has been just about three years since Vishal Sikka took over the reins of the company, Infosys is making remarkable progress on the path of sustainable growth and profitability.

In its annual report, Infosys CEO and managing director Sikka recognises this key trait. “It was clear nearly two years ago, and today it is starkly clear, that given this digital transformation of our world, the traditional services industry of the past, in which we compete to do the same work cheaper but with world-class quality, must also transform,” he noted.

Sikka has implemented two key strategies for future growth, automation and innovation. Last year, the company outlined a new strategy for growth called Renew and New. In automation, the company is focusing on improving existing solutions, and ‘New’ is all about creating breakthrough innovation in technological products and services.

It’s been no surprise then that the company has, over the last year, raised rupee revenues by 17.1 per cent to Rs 62,441 crore, while dollar revenues have risen 9 per cent to $9.5 billion. Infosys has reported a significant increase in large deal wins which increased 45 per cent to $2.8 billion this year.

One of the key parameters of evaluation of technology companies is to measure them on increasing revenues from top clients. On this front, Infosys has been accelerating efficiently as revenues from 10 clients grew 12.3 per cent, and for top 25 clients, it grew steadily by 9.3 per cent in constant currency.

While it’s still early days on the automation front to improve efficiency, nevertheless, productivity is on the rise at Infosys. As a part of its automation strategy, Infosys released nearly 4,000 employees, but at the same time, the domestic software giant continues to add further strength to operational efficiency such as increasing employee utilisation, enhancing on-site revenue mix and reducing onsite employee costs through constant innovation.

Besides it’s increasing revenues and reducing costs, employee engagement is also increasing at Infosys. The company trained 80,000 engineers on design thinking, which the company plans to take to every facet of software development. Infosys’ decision to cut back underutilisation of its bench through a zero-bench strategy has already paid dividends; more than 12,000 jobs have been created due to this policy. Plus, the company is implementing a global delivery model strategy to add value to clients despite boundaries.

Infosys is also working on its Infosys Mana platform — a solution in artificial intelligence that is used to constantly reinvent the systems — which can help lower the costs of maintenance and enable clients to deliver better solutions to their customers. The company is also investing and creating opportunities in intelligent cloud-based analytical platforms.

Digitalisation and Internet-of-Things (IoT) are going to be the growth drivers of tomorrow. And as per analysts, Infosys has the right portfolio mix with high consumer interface. Infosys derives nearly 52 per cent of its revenues from verticals such as healthcare, retail and manufacturing. It has also acquired companies such as Panaya, Skava, Lodestone to shore up its digital offerings.

Besides, Infosys is going to refocus on the infrastructure management space, where there are nearly $50-60 billion worth of projects coming up for rebid in the next few years. Analysts are expecting an upward revision in earnings with its new strategies such as ‘Renew and New’ and due to an improved outlook of its high growth segments. It’s still early days, but the new growth strategies hold considerable promise.