April 24: Infosys CEO Salil Parekh has revealed a three-year transformation strategy for the global software major to drive business by investing more in digital technology. As a part of the plan, Infosys will also hunt for strategic inorganic acquisitions similar to that of rival Tata Consultancy Services.
Stressing the need for digitization of core areas, Parekh said that there was tremendous loyalty and expectation from the clients on digital future. As digital is not just about technologies but driving business outcomes, we will invest more in it as we are well positioned in it (digital), Parekh was quoted as saying by a news report.
The three-year plan, which largely aims to achieve the digital goals of the company, is expected to stabilize the company in the first year, and it will be followed by the kick-start of momentum in the second year. The final year will be to accelerate the process by having more share of clients’ relevance.
The road-map has been designed based on the clients’ suggestions to the executives. In addition to digitizing the key areas, Infosys will also utilize the plan to drive business outcomes for clients rather than just selling the technology or services.
The company’s plan to scale its digital business also comes on the backdrop of the contribution of its digital offerings to the annual revenue. In Fiscal 2017-18, digital business contributed $2.8 billion, which was above 25% of the total turnover for the company. However, the company has failed to catch up with its rival TCS in terms of mega deals. The latter managed to win over $6 billion in terms of deal, while Infosys won only about $3 billion in large deals in FY18.
Infosys has also lowered its FY19 margin target to 22-24% from 23-25% the previous year. The company has recently introduced re-skilling approaches alongside aim to improve its workforce strength in the US and UK. The measures were introduced as a part of the four pillars of the company’s new business strategy, which also includes more relevance to the future of its clients through scaling up of business, and energizing core of artificial intelligence.