A lot has changed in the outsourcing world since seven engineers started Infosys with $250 in 1981. Or has it? We got a few minutes with S D Sibalal, Co-Founder and CEO of Infosys, who goes by ‘Shibu’, during Infosys’ recent analyst day in Boston, to find out what’s going on under the Infosys hood these days....
Phil Fersht, HfS Research: Shibu, in the next three years what do you see as the driving force behind this new look and spirit of Infosys we’re seeing?
S D Sibalal (‘Shibu’), Co-Founder and CEO, Infosys: I don’t think the fundamental platforms have changed. However, I would like to be more diversified in Mexico, China and other parts of the world. One of the key aspects of our vision is to be global. Today 94 percent of our workforce is in India. That needs to shift. We will become a more local player, especially in the non-English speaking markets like Germany and France. We will expand our business in Europe and the rest of the world.
Phil: The type of skills you need are quickly changing as you evolve the business. Now it’s not just the technology skills that were the classic underpinnings of the company. Today you need people who understand processes and marketing.
Shibu: Today everyone must be an expert. It’s all about business knowledge. We must have employees who are business process experts in specific areas like retailing or risk management. We are in the process of adding those kinds of people. Right now they comprise just 10 percent of our employees if you take out BPO. But that percentage is constantly increasing, especially in the non-English speaking markets. Eventually the balance will be 70/30, with just 70 percent of our people having a high tech background.
Phil: Does that mean you are going to enter the consulting space more aggressively?
Shibu: We are not trying to become a consulting company like Deloitte or McKinsey. Our model is our strength. We don’t want to become anybody. But from a capability standpoint consulting will enhance our offerings.
Phil: When you look at the next wave of innovation over the next five years, where do you think the business will go?
Shibu: When I began this career, I started in electronic data processing. Then we worked in the connected world. Now there is a huge shift in the industry toward prediction. We are going from data to information to intelligence. It’s all about creating intelligence and insights. I see that as a huge part of our job.
Phil: Is this kind of innovation a new opportunity for Infosys?
Shibu: This opens up a lot of opportunities. There is no doubt. There’s a lot of innovation there: statistic modeling, heuristic learning, speech recognition, and so on. They are all opportunities. However, we will need to develop a lot of new skills to do this.
Phil: And how about the “old” IT capabilities?
Shibu: I still believe we will be doing Cobol programming and mainframe work. Outsourcing is a continuum. We still have people working on mainframe while the evolution is happening at the same time.
Phil: How important is intellectual property in the long game?
Shibu: I believe it will be important to have patents and intellectual property. In the last four years we have filed 548 patents. That is the journey we are taking. An intellectual-property-based business will be big a part of our model in the next four years. And I think this journey to this new model will be accelerated. It took 15 years to get here but probably only four to get there.
Phil: Are you happy with your acquisition of Lodestone Holdings? The press release says you added 200 clients.
Shibu: Actually about 70 percent are new clients. Some of their clients were small clients which isn’t our market. More importantly, we got 1,000 people in continental Europe, local talent in Germany, France and Switzerland.
Phil: How is the integration going?
Shibu: An integration like this is very difficult to do. This delayed the integration process by a quarter, but now it’s all behind us. Clients are able to see the benefits.
Phil: Do you see other strategic IT acquisitions on the horizon?
Shibu: There is no need for acquisitions in IT operations. Historically we have grown organically in IT. We will only do partnerships. I think we will wait with systems integration and consulting. We have a strong model in the US and now we have a strong presence in Europe. I don’t see a reason to do anything else.
Phil: How do you keep the “stove pipes” from taking business away from each other when the primary go-to-market strategy is around the vertical industry? How do you maintain collaboration across the enterprise?
Shibu: In our model the industry verticals can’t take business away from each other because they are completely isolated. This problem doesn’t exist because we have no overlap. But the challenge is: how do you make sure the offerings are standardized across the different go-to-market segments? That is where analytics comes into the picture.
Phil: What about best practices across the industry verticals?
Shibu: This is a challenge because the verticals really have nothing in common. For example, retail has nothing to do with manufacturing. Creating a best practice across them is the challenge. It’s a little more challenging than I actually expected.
Phil: So….has Infosys got its mojo back?
Shibu: I don’t think we have lost anything in one or two quarters. Last year we had some challenges, both internal and external. And we still have some, to be honest. But now most of them are behind us. Things are going well. But I am still cautious. I want to see a couple of good quarters before I declare victory.
Phil: And finally, we’ve talked a lot about about ‘change’ today. What won’t change?
Shibu: Our value system. We base our company on honesty, transparency, no hierarchy and fairness. Those values are the guiding radiant. Whatever we work on, at the end of the day, the only things that are important are client centricity, execution excellence, leadership by example, a spirit of innovation and our value system. Our strength is that we are a learning organization.
Phil: And that’s why the smart people aren’t writing off Infosys 🙂 Thanks for your time talking to our readers, Shibu.
Shibu: Good luck with the Horses!