S 'Kris' Gopalakrishnan, the CEO and co-founder of Infosys Technologies, the country’s second largest software services company, is tight-lipped about the restructuring it is undergoing. In a chat with Shivani Shinde, he chalks out some plans and strategy. Edited excerpts:
Infosys is planning a rejig. What will be the focus of the rehaul?
I cannot confirm or deny the news. But Infosys has been doing such restructuring (before).
A recent CLSA report said Infosys will need $3.5 billion of new revenue for the next two years to keep growing at 25 per cent. How will the company keep this momentum?
I do not have a time-line but the company has a directional focus. We have said a third of our revenue in the coming years should be from business operations. That includes segments like BPO (business process outsourcing),infrastructure management and ADM work. A third of our revenues will come from transformational work and a third will come from IP (intellectual property), innovative solutions, etc. At present the break-up is, BPO contributes 65 per cent, 25-30 per cent comes from transformational work and just about 10 per cent from IP and innovation. There’s a long way to go.
Does this mean drastic changes in strategy?
We still have headroom. We have about 600 clients globally out of the (Forbes) Global 2,000 firms; many are from the Fortune 500. Most of the revenue comes from four major verticals. But we still have to penetrate verticals like healthcare, pharmaceutical, media and entertainment, energy, life science, etc. In terms of markets, the US is still a major one. It contributes 63 per cent; 23 per cent comes from Europe. Whereas, the rest of the world is 14 per cent. So we still can grow in the rest of the world.
And, if you look at future growth segments, then it is from the BRIC countries (Brazil, Russia, India, China) and we still have room there. So, within our existing customer base we can grow. If we grow the other clients to these levels, we have enough headroom and opportunities to grow.
What will be the strategy in emerging markets?
These markets do not have the maturity that the developed markets have. They want integrated services and solutions. They do not want people helping them develop applications. They are willing to look at platform-based services and other offerings. More important, the global delivery model does not apply. You will have to tackle the market based on our expertise. So, it changes, as China will be dealt from China, India operations will be from India. Similarly, Brazil and Japan will have such a strategy.
There is a lot of restructuring and leadership churn at many IT firms. How much of this coincides with the change the industry is going through?
I don’t think the current churn in the industry with regard to leadership has anything to do with the changes in the industry. In our case, we knew (Narayana) Murthy (founder-head) would be retiring and we have set up a process for the same. We have a policy to retire at 60 years. So, every company has a different issue.
Having said that, definitely the industry is going through a change. For, work has come back and, two, we are seeing new business models driven by cloud (computing) and customers asking for much better choice. Since you have to look at new models,that is forcing many to look for change. The only thing that has changed is the decision making process. The process and implementation need to be much faster due to the volatility.
