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CEO Salil Parekh told. Parekh said that the digital business would cross more than 50% of its revenue as the IT services provider wins large deals from clients investing in technology to differentiate.
Excerpts:
It’s looking up for the technology sector, isn’t it?
Demand is good, clients are buying (technology services). Most companies seem to be in a good place right now. We can certainly see from a client perspective that there is lot of interest (for our services). The pace of new investments is faster. People are ready to put money into making the change (towards digital).
You had charted out a three-year journey. How is that progressing?
We had laid out three or four elements on the journey and on each of those we seem to be progressing quite well. The one that is the most successful from a client perspective is the digital one, where we see a lot of traction. If you see, just over 40% of our company now is doing projects in digital, which is a big change. We will see more than half our company doing digital projects. The second one, which has also gone quite well, is the focus on large deals. In the first nine months, we have 56% more in large deals than the previous nine months, so the parameters there are in good shape. You have to keep executing. There is no change in the strategic direction, this is just execution.
What are the other factors that helped?
The good news was that there was a good macro-environment. If you have a negative macro-environment, then it is more difficult or takes longer. The thing that really helped was the inherent strength of Infosys because, as you know, we have inherently the same team that is driving it.
Will you be able to maintain double-digit growth, and as digital grows, will you see margins expand?
My focus is on this fiscal year. We are not saying anything on growth beyond. What I am very clear on is, where we have made the investments and created the differentiation, we see good traction. Three areas are giving us a lot of momentum — cloud, it is even faster than the area of digital; data, there is not one client that is not talking about transforming their data; and the third is (user) experience and how they look at technology.
Digital is growing, even though your core is shrinking. How do you manage this transition?
The main driver for this is clients changing their spend and that is more in the new areas. From our perspective, our core is still extremely strong and competitive, especially building on automation and artificial intelligence.
Reskilling (of employees) is going at an extraordinary pace. Over 200,000 of our employees have downloaded and are using the online Lex (Infosys’ learning platform) tool regularly. In the last quarter, we had about130,000 employees take some course-work from that. During weekdays, people do almost 35 minutes of training, on weekends almost 60 minutes. Because people are getting reskilled, there is demand for them to get on projects.
Both have to happen in parallel. Clients changing their perspective and us being ready with our investments, so we can go after this work and then having this talent pool who can do this work for clients.
Does this help stem attrition?
We have already seen huge progress. In the last quarter, we were at 15% in the voluntary attrition level. It is down quite dramatically from a few quarters ago. One of the things is the reskilling and new work. To ensure that the journey of employees is very straightforward and smooth and the journey is well understood and clear, we are looking at building more and more teams from inside. All of those things have come into play.
Are the restrictions on visas a concern for employees?
We have added 12,000 new recruits in India. We also have a large number of applications (for US visas) still going on. There are a lot of opportunities in markets such as Europe, Canada and Australia, and we have a lot of those available for employees.
With the elections in the US, do you think there will be rhetoric about immigration starting up again?
I don’t think we have seen anything different. Of course, it is the election year, so we will have to see what comes about it. But we have seen some of the (immigration) processes become more refined. The regulations are the same, but the processes are more refined. My guess is that this will continue. We have been quite focused and we have applied, as you know, for a large number of visas.
Analysts say clients may hold off spending…
Right now, our main focus is to close out the fiscal year. For this year, we have increased our guidance and we see good traction in many of our segments. Between now and the end of March, we look at how the next fiscal year is going to look, obviously the election falls right in the middle of that.
Our process is also a combination of bottom-up — working with each of our segments and service offerings — and also a little bit outside in working with clients and seeing what the patterns are.
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