In­fosys

In­fosys CEO Salil Parikh’s ini­tia­tive to de­velop lead­ers in­ter­nally has forged a strong trust be­tween man­age­ment and em­ploy­ees. This has helped the com­pany with some cas­cad­ing ef­fects

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In­fosys, the dar­ling of In­dian IT Ser­vice Providers’ seg­ment, had a mixed bag of per­for­mances across the FY 18-19. It clocked USD 11,000 Mn rev­enue and grew at 9 per­cent year-on-year in USD. The key highlights of the year were – a spurt in dig­i­tal busi­ness and a stronger deal-flow. This, how­ever, came at the cost of prof­itabil­ity, which led to a dip in its mar­gin guid­ance for FY 20 to around 21-23%.The com­pany seems to be on course of a well-mapped three-year strat­egy of “Nav­i­gate Your Next”. In­fosys was, no­tably, able to build a healthy pipe­line through­out the year with a to­tal con­tract value of US$6.28 bil­lion. The at­tri­tion, al­beit, ap­pears to be an on­go­ingchal­lenge and does not seem tosta­bi­lize.

In­fosys CEO Salil Parikh’s ini­tia­tive to de­velop lead­ers in­ter­nally has forged a strong trust be­tween man­age­ment and em­ploy­ees. This has helped the com­pany with some cas­cad­ing ef­fects. It has bol­stered In­fosys’ go-to-mar­ket strat­egy and sta­bi­lized its growth rates. The com­pany strat­egy - to ex­pand on­shore re­sources in both the USA and Europe - show­cases its com­mit­ment to build a brand that can op­er­ate and ex­e­cute ser­vices in both legacy do­mains and for new tech­nolo­gies. In­fosys’ investment in on-site tal­ent is help­ing the or­gan­i­sa­tion to drive aware­ness around a burst of dig­i­tal ca­pa­bil­i­ties and com­pe­ten­cies across the ver­ti­cals. In­ter­est­ingly, it is plan­ning to ac­quire 75% of Stater (ABN-AMRO sub­sidiary) to strengthen its mid­dle and back-office ca­pa­bil­i­ties for mort­gage ser­vices.

The com­pany aced in ink­ing some deals with Roland-Gaross to pro­vide data an­a­lyt­ics and AI-re­lated ser­vices sup­port­ing fans, coaches and play­ers’ CX af­ter a slew of sim­i­lar deals with As­so­ci­a­tion of Ten­nis Pro­fes­sional and Aus­tralian Open. In­fosys also won many deals around Fi­na­cle - like MeDirect Bank from Bel­gium, Fi­na­cle As­sure for RBL Bank in India and Hat­ton Na­tional Bank for blockchain-based trades and other deals with Ahli Bank, .

If we look at its per­for­mance from a global lens, we would note that fo­cussed ge­ogra­phies like North Amer­ica grew pretty well on a quar­ter-on-quar­ter ba­sis clock­ing close to US $1.8 bil­lion ev­ery quar­ter and still con­tribut­ing.

In­fosys seems to be strug­gling to catch up with TCS and its growth tra­jec­tory. The leader of the pack seems to be cruis­ing well and grow­ing with­out com­pro­mis­ing prof­itabil­ity. We might see the cur­rent sprint con­tinue for In­fosys in FY 20-21. The com­pany will, nonethe­less, have to change the per­cep­tion of be­ing an out­sourcer. It has to etch a new im­age and swiftly enough– that of a so­lu­tions-led part­ner.

Chal­lenges:

• Growth com­ing at a com­pro­mised mar­gin • At­tri­tion level in the range of 20% • Uti­liza­tion rate is be­tween 21-23% • Needs a bet­ter strat­egy for the India mar­ket

—SALIL PAREKH CEO, In­fosys

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