时间：2022-10-09 03:25:04
S.D. Shibulal, the last of the founders to lead Infosys, is under pressure to boost growth at the software giant. In an exclusive interview with Govindraj Ethiraj on the show Bottomline, airing on Headlines Today, the Infosys CEO spoke on issues ranging from his new vision, Infosys 3.0, to the need for strategic acquisitions. Edited excerpts:
You have been asked many times why you do not want to acquire companies and you have said that it is because you cannot keep adding people and growing organically. What does this mean?
I believe that our service business can really scale up…I’ve been asked this question when we were 10,000 people, 50,000 people, 100,000 people. Infosys is a platform which is absolutely scalable… We have scaled up across the country. So from the scalable perspective I do not see any limit. But the question is whether that is the right thing to do. Will the talent supply support it? That is why we say we need to create a balanced portfolio of business which will actually make sure that our dependence on people comes down over a period of time.
To what extent is the growth of Infosys dependent on the Indian economy?
From a talent supply point of view, India is a predominant piece. Last year we recruited 45,000 people. This year we will recruit 35,000 people. India is going to produce a million engineers. Even if I assume 40 per cent of them are MNC ready, that is 400,000 people, we have enough talent supply in India to support us. That is one part of the business. The other part is the Indian business itself. Our revenue from India today is one per cent. Of course, we have entered India late. We have been present in the Indian market only over the last couple of years…We have announced a `800 crore India Post deal. It is a real transformational deal. We are looking for deals of that nature in India and we are seeing very good traction.
How has the industry changed over the last decade?
In 1999, we were predominately providing application development and maintenance as a service, 95 per cent of our revenue came from this. Today, this service is 38 per cent of our revenue. The company has gone from$200 million then to $7 billion last year. Our service line perspective completely changed. We are a true end-toend service provider. Thirty per cent of our revenue comes from consulting and system integration… Strategic partnerships have to evolve. They have to provide higher value to clients. They have to provide business innovation to clients. That is an evolution the strategic partner has to do over a period of time.
The addressable market for IT services is still $100 billion… and all companies are playing in a very small portion of it. So why is there concern?
The supermarket of IT services today is probably close to a trillion dollars. In that sense you really have a long way to go. But it is a fragmented market. You have hundreds of players. Our business model is based on strategic partnerships. We build long-term business relationships with our clients. If you look at revenue, 95 per cent comes from repeat business. If you look at our portfolio of clients, there are clients who have been with us for the last 10 to 15 years, which means that we have to build and strengthen that strategic partnership. We have to increase the value we provide to our clients…if you continue to provide the same set of services, even at a higher efficiency, that is not enough. You have to provide a wide range of services. You have to operate with them on the revenue side and the cost side.
What is the sense you get from around the world today, again through the eyes of your clients, are things slowing down?
The environment continues to be volatile. If you look at the US, economic growth is slow, unemployment is high…If you look at the European crisis, there are still issues to be ironed out. So there is volatility in the environment. I am not seeing any material change in the environment.
Is this the new normal?
In many ways I think the world will continue to be volatile for the medium term at least. In the long term, I think things will stabilise and improve. But in the medium time, it is going to be a protracted recovery.
So would an acquisition or a set of acquisitions be the way out for companies like Infosys to grow rapidly?
It always has to be a combination of organic growth and acquisitions, because in my mind an acquisition is not a direct answer to growth. Acquisitions have to be strategic. Growth has to be driven by organic growth. Of course, an acquisition can play a part as well as support it. Why do I say an acquisition has to be strategic? It has to put two and two together and create five… For example, we are very focused on growing in Europe, so that would be a good place for us to do an acquisition. We are very focused on increasing our consulting and system integration revenue. That would be a good place for us to do an acquisition… If we want to enter the US public service market we have to set up a subsidiary. That would be a good place for an acquisition.
You have talked about Infosys 3.0. How is that different from the Infosys that N.R. Narayana Murthy built, if at all?
It is fundamentally on the foundation of what was built. This is a company which has been built on foundations of ethics and governance. It is built on very strong value systems. None of those things will change under Infosys 3.0. I think once you understand the reason for 3.0, everything makes sense. One, some part of the business is getting commoditised. So it is very important that we build a balanced portfolio which will consist of service lines which are commoditised as well as non-commoditised. Two, clients are asking for higher value. They are asking for excellence in execution plus business innovation. Three, we believe that in the long term getting high-quality talent will be difficult, which means we need to create some non-linearity between effort and revenue. And fourth, we have to evolve our business model. These are the fundamental drivers.
The central point is that we have to increase our relevancy to clients. That is the fundament premise on which we move forward. Excellence in execution is a hallmark at Infosys. If you talk about business innovation, that requires a clear framework. Building tomorrow’s enterprise is that framework. We have chosen seven areas of innovation, seven themes. Those themes are where we are investing. That is where we are filing patents. We have filed 400 patents over the last threefour years… Now, to support a new strategic direction you need to restructure. So we have restructured. We have a new leadership in place, we have the strategy.
What would you need in these three areas –leadership, vision, execution – from the government of India?
(Laughs) Interesting question… I think one needs to answer that in a much broader sense. We have made tremendous progress over the last 30 years but we still have a very long way to go. These responsibilities rest with all the stakeholders. I would not hold one set of people (responsible)… When you look at the government, the first thing that comes to my mind is constancy of purpose, what is the direction in which the country is going. So whether it is in regulations, approvals or decision-making, you need constancy in purpose. That gives a framework for people to create confidence and action.
Do you see the Indian economy reviving from where it is today?
I always look at the future with a lot of positives in my mind. There are, of course, some challenges. I think if we can just overcome these three-four challenges, the future will be very bright.
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