Getting people to office will renew social capital: Infosys CEO Salil Parekh

By outperforming peers for the second successive quarter, Infosys can rightly claim that chance favours the prepared. A three-year road map prioritising digital services, drawn up in 2018, has helped boost both revenue and profit, even as rivals contend with the disruption wrought by the Covid pandemic. With more businesses worldwide seeking digital solutions, CEO Salil Parekh reckons the $12.78-billion company is well positioned to capture a significant slice of digital tech spends and sustain its winning form. Parekh tells Ayan Pramanik and Raghu Krishnan the pace of acquisitions at Infosys will rise even as he advocated the need for a flexi-work model that also provides sufficient time at office for employees. Edited Excerpts:Is Infy returning to a sort of multiyear high-growth cycle?Last year, (revenue) growth was 9.8%, the year before it was 9%, and my plan once we are outside the (Covid-19) crisis, is to be back to a high-growth business because the technology area has a lot of opportunities. Today, 44% of our business comes from what we have defined as digital, which is growing at 25%. Very shortly, that share will be more than 50% and (Infosys) will essentially be a new digital company. What we have demonstrated is that when the environment is difficult, we will still be ahead of peers.What was the secret sauce that helped Infosys tide over the Covid disruption?We put in place a few things in (2018). A clear focus on digital, which is where clients are now (spending); and looked specifically at large deals, such as the partnership with Vanguard, announced earlier this month. Finally, we paid attention to reskilling employees, because that is the key. We want to make sure that employees see themselves as part of the future. What the crisis did is accentuate the relevance of those choices, it is what differentiates the outcomes.Acquisitions have helped Infy grow faster. Will this strategy continue?Last year, we did about 9.8% growth, and of that about one percentage point was acquisition-based. Obviously, organic is critical. But acquisitions are very important. We have done two acquisitions in the cloud space in the past 12 months — one in the US, one in Europe. If you look at a 12-month scenario, there will continue to be small acquisitions in the cloud, data and cybersecurity sectors.There appears to be a consensus among IT companies that not all employees will be back in office. How will this change IT services delivery in India?There will be more flexibility on where people will work from. The reason we have been successful with WFH (work from home) during the crisis is because of the social capital built over a number of years. Maybe people underestimate the value of that social capital. For me, it is absolutely critical. Imagine doing this (WFH) for the next 10 years. It’s unlikely that you will be at the same intensity. You have to renew social capital, employees need some interaction. My view is (the crisis) is finite. There will be therapeutics, vaccines and we’ve learned through physical distancing, masks, how to reduce probability of impact.Reliance Industries’ aggressive expansion and fund-raising with Jio Platforms has stoked discussions on why debt-free Indian IT services companies haven’t been more ambitious?The focus for us was to first ensure that we are in the best position to be a digital services company; we’re getting there. The bigger point is to drive transformation and innovation. So, part of it is connecting with the Indian startup ecosystem actively while building on the strengths we have in working with global enterprises. We have an extremely strong business model — generate $2 billion of cash each year. Obviously, we have ambitions to do things beyond, but those ambitions are driven by and related to our core strengths.How will you deal with greater competition from rivals in the digital services space?Competition will always be intense. There are some investments (other companies) have to make. And that has implications. We took a few quarters to do all of that, and have a little bit of an advantage, and hopefully we will move to something else as well. So, it’s a question of keeping up with where the clients are going; competition in our sector is always quite high.And you will defend your margins?You saw our margins were in good shape and actually expanding in this environment, and we have given guidance in that band. We don’t anticipate that to change. We absolutely have a plan to build on it. Our investment phase is complete, and now it is operational.

from Economic Times https://ift.tt/2WE1unE