Our strategy to focus on core strengths has paid off : Infosys COO

K Giriprakash Bengaluru | Updated on November 18, 2020

BENGALURU, KARNATAKA, 16/10/2018: Salil Parekh, CEO and Managing Director, Infosys, M.D. Ranganath (right), CFO, Infosys, and U.B. Pravin Rao (left), COO, Infosys, at a press conference to announce the company’s Q2 results, at Electronic City campus in Bengaluru on October 16, 2018. Photo: G.R.N. Somashekar   -  BUSINESS LINE


Looking back, the poor Q1 performance of most of the domestic IT services companies now seems more of an aberration, though one expected to last long. However, companies like Infosys have surprised the bourses with better than expected results. In an interview with BusinessLine, UB Pravin Rao, Infosys COO, outlined the company’s growth strategy and how it has been able to come back strongly. Excerpts:

How different has been the journey since the new CEO was onboarded? Have there been any major departures from the way Infosys used to function?

One of the first things put in place after Salil Parekh took over as the CEO in January 2018 was drawing up a three-year road map called ‘Navigate Your Next Strategy’. The strategy was to focus on our core strength which was service delivery and excellence in execution. With all the transformations and disruptions happening around us largely driven by technology, clients were looking for a partner to navigate through this phase and we thought we should establish ourselves as a partner in that endeavour. In the first year, we grew 9.8 per cent and in the next, we grew 9.2 per cent in constant currency. In both these years, we are in the top two in the industry. We expect to end the year with a positive growth despite the pandemic. So, the strategy has paid off from that perspective. It was not only about the strategy but also about the strategic choices we made. When we looked at the elements about this strategy, there were four imperatives: scaling digital, energising the core, reskilling and localisation. Today we have the right set of digital capabilities to capture the opportunities out there. We have become more agile, and are re-imagining our business, embracing a lot of automation. Today, we are able to serve customer needs through our own internal reskilling exercise rather than dependence on talent from outside. Localisation has also made a huge difference. Today, we are able to worry less about any of the immigration-related issues that you keep hearing. Today we have been able to execute our strategy that we set for ourselves.

One assumes that irrespective of the outcome of the US elections, certain things about the immigration policy may not see any drastic changes, especially with regard to the H-1B visa. Infosys and other top IT services companies do say that they have almost de-risked themselves. But it is still an uncertain environment out there. Will Infosys change the mix as far as nearshore, offshore and onsite are concerned going forward?

Broadly, these issues are all political in nature. But we have learnt to live with it. We are fairly derisked in that way. About 63 per cent of our workforce in the US is local. We hired about 13,000 people in the last three years and we have made a commitment to hire 12,000 more. We are trying to create talent thereby creating hubs and digital studios. We have also invested and continue to invest in nearshore centres as well. We have a strong presence in Mexico and Canada. This gives our clients real-time support. It is all about skills, right? It does not make any sense by trying to create restrictions in terms of free mobility of talent. However, as long as we have the capability and the confidence of serving the needs of the customers in the US and elsewhere in the world using our various locations, we will continue to scale our businesses.

Infosys had earlier said that 50 per cent of its total revenues will come from digital but it is too broad a definition. Testing can also be one part of it, right? What defines digital for Infosys?

I agree that there is a lot of hype around what exactly is digital. In 2018, we talked about one of the pillars being scaling agile digital. For us, digital is anything which has an impact around experience, around data and insights, innovation or platforms, modernisation and assurance which includes cyber, testing. Anything in these five areas we call digital pentagon is what defines our digital strategy.

One does see more companies reopening their campuses. So, will Infosys do something similar over a period?

Right now, 99 per cent of our employees are working from home. Beyond that, we have to see how things pan out. Even in the January quarter, we don't see any dramatic change in our stance but we are ready if the situation arises to return to offices. We are not in a hurry to get back our employees to the offices. We have seen that the current remote model works fine. However, if certain clients demand that some of the employees need to work from the office, then a certain number of employees will be deployed to work from campuses. We are also opening some part of the office as huddle spaces as we recognise that fatigue might have set in among employees. So, we encourage some of them to visit the campuses either for networking or for team building activities.

Infosys has gone through some major upheavals earlier and one of the issues that used to come up quite regularly was how it did not have a strong pipeline of leaders who could eventually take over key roles. How is this issue being addressed now?

Whenever there has been an exit at senior levels, we have not filled up the posts through external hire except in the case of CEOs. We do have a strong pipeline of leaders. We have in place a next-generation leadership framework called 'leadership by values'. We have tried to institutionalise it through 360 degrees performance management. There is a significant focus on personalised leadership development and there is a lot of intervention and assessment, personal development plan, coaching and mentoring. In addition, we have carved out a set of constellation programmes where we have about dozen projects and each of these projects are run by a subset of our leaders. Each of these projects addresses some strategic themes. For example, what would next-generation performance management mean and what we should do from a platform perspective.

Increasingly, non-CIOs are playing a bigger role when it comes to client acquisition. About 50 per cent of the IT budget now sits with non-CIOs like CMOs, CHROs etc. Does Infosys have the traction there and how does it mine for big wins?

Digital is not about just technology alone, right? It is also about technology applied in the context of business and making a business impact. Today, business owners are key decision-makers. Not only you have to sell to CIOs, but also to CMOS, CHROs. Given the fact that our people are well equipped and hence understand the disruptive forces in play, we are able to contextualise the offerings or solutions to our clients. In fact, some of the acquisitions we have made also help us in this direction.

Published on November 18, 2020

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