Keen to Track Im­pact of Au­toma­tion & New Ser­vices on Top Line

The Economic Times - - Companies -

In­dia’s sec­ond largest soft­ware ex­porter In­fosys fore­cast rev­enue growth of 11.8-13.8% for FY17 and re­ported its best fourth-quar­ter num­bers in at least four years. In an in­ter­view with Anir­ban Sen, In­fosys CEO Sikka spoke about how tra­di­tional met­rics of the IT in­dus­try need to evolve; how In­fosys is flat­ten­ing out its or­gan­i­sa­tional struc­ture and the fu­ture of em­ploy­ment and hir­ing in the IT in­dus­try. Edited ex­cerpts:

Ear­lier you spoke about how tra­di­tional met­rics of the In­dian IT in­dus­try need to give way to newer met­rics. Are some older met­rics be­com­ing ir­rel­e­vant? What I mean by that is that many of th­ese new met­rics are too small to mat­ter in the P&L, but they are in­cred­i­bly im­por­tant for the com­pany’s fu­ture. Some of the ones that I’ve men­tioned are the num­ber of peo­ple we’ve freed up be­cause of au­toma­tion — this num­ber was 600 in Q2, 1100 in Q3 and 1700 in Q4. 1700 is not a small num­ber, but it is small as a per­cent­age of the over­all com­pany. So, if we’re not pay­ing at­ten­tion, it has a pos­si­bil­ity to get lost in the noise. This num­ber mat­ters — when it be­comes 5,000, 10,000, 20,000, this num­ber will be of in­cred­i­ble sig­nif­i­cance. It will take sev­eral more quar­ters, but at some point it will grow non-lin­early. The rev­enue com­ing from new ser­vices and new prod­ucts is an­other im­por­tant area. The en­croach­ment of ar­ti­fi­cial in­tel­li­gence into the more com­plex parts of the busi­ness is an­other im­por­tant area. The new high-mar­gin ser­vices as a per­cent­age of the over­all busi­ness is an­other im­por­tant area.

What are some of the newer met­rics In­fosys would like to be bench­marked against, let’s say a year down the line? Ul­ti­mately it’s the im­pact of au­toma­tion on the rev­enue per em­ployee; the im­pact of au­toma­tion on the mar­gins; the im­pact of the new ser­vices and the new soft­ware on the top line. Those four met­rics, I would be quite keen to track. In my of­fice in Palo Alto, I have 50 other met­rics that I track — the value pro­duced from our bench is an­other­ese types of met­rics are very im­por­tant for the fu­ture of the com­pany and the in­dus­try.

How’s or­gan­i­sa­tional de-lay­er­ing ex­er­cise com­ing along? We’re mov­ing for­ward with that. We have ex­panded that to two other ser­vice lines par­tially. And we are care­fully work­ing on that. Over the course of the year, we’ll do more of it...the point is to bring more peo­ple in con­tact with the cus­tomers. The flat­ter and the more in touch with the out­side the or­gan­i­sa­tion is, the more ag­ile it will be and the more in­no­va­tive it will be.

What does this mean for the fu­ture of hir­ing and em­ploy­ment in the IT in­dus­try? The rate will slow down, but it will con­tinue to rise. But not at the in­cred­i­bly rapid rate that we had be­cause the num­ber of peo­ple per value de­liv­ered will con­tinue to come down. This is the point of the rev­enue per em­ployee in­crease.

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