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
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