Saturday, September 01, 2012

ON “CLOUD SEVEN”

Uncertainty in the global environment persists, but Infosys has tremendous confidence due to the fact that the spends of clients are now back on track. Besides strengthening its global delivery model, the company is now looking at new avenues of growth. Will it be able to take the next leap forward?

Brevity wouldn’t be something that you would credit Infosys’ latest repositioning for, but there are also undeniable signs of the company’s will for a radical future-centric transformation. From being the company that helps its clients “win in the smart world”, the broad and comprehensive shift is towards “building the enterprises of tomorrow”. That, in turn, includes seven broad areas – improved engagement with digital consumers, setting up innovation hubs in emerging economies, IT for a sustainable tomorrow, smarter organisations, new commerce, pervasive computing and healthcare economy.

So how has the progress been for Infosys in these new endeavours? The company has gained some ground, if you see some of the orders they are getting. With structured and unstructured analytics, Infosys is aiming to be a partner to its clients and to help them be more future ready. A global auto major has taken their help to enable it to be more responsive to customer’s demands and to boost efficiency. A leading beauty care products manufacturer has sought Infosys’ services to assist in promotion, pricing as managing its portfolio in a better way. In the healthcare space, Infosys launched the iTransform product suite and is also helping a biotechnology company in drug discoveries. They have launched consulting and system integration operations in Australia and New Zealand and added a development centre in Mexico.The green focus is more towards conservation of resources at the moment, as the company claims to have already achieved a 17% reduction in per capita energy consumption. In the realm of pervasive computing, the company is in the process of making Finacle available on the Software as a Service (SaaS) platform for the convenience of its customers.

While the slowdown compelled Infosys to make several adjustments in the short term to protect its margins, it has also inspired it to look at ways to improve the portfolio of services it offers its clients and also look to get the high end businesses. When you look at results for FY 2009-10, Infosys, which was ranked 8th this year compared to 7th in 2009, posted net profits of Rs.62.66 billion, a yoy growth of 4.6%. Revenues were at Rs.227.42 billion, a yoy growth of 4.8%. Considering that the IT sector is just on its way to recovery, and Infosys had given a flat guidance in advance this year, the results were a reason for celebration. Commenting on the results, Infosys CEO Kris Gopalakrishnan comments in an exclusive with B&E, “Given the recessionary conditions and general slow recovery post the recession, Infosys has witnessed good growth over the last three quarters. The ‘New Engagement Models (NEM)’ have made a good impact and are accounting for almost 5 per cent of our revenues. Offshoring received sound endorsement for its value and Infosys has focused on being a trusted transformation partner to our customers.” The NEMs, i.e. outcome based and platform based pricing are expected to drive profits in the upcoming quarters, as the company endeavours to have an enduring, non-linear relationship between growth and headcount.


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