Infosys eyes more automation at client projects by year-end

Infosys, India's second-largest information technology (IT) services company, is looking at bringing more automation to all its new projects by the end of the financial year. The model, people-plus-software, was the way forward, chief executive Vishal Sikka said. Under this model, software would help lower the number of people engaged in projects, lowering customers' cost and improving their profit margins.

"I am impatient to see that 'people-plus-software' is brought to all our clients as quickly as possible. Last week, we laid out a very clear goal to our sales team that we have to bring this model to every client before the end of this year," Sikka said at the JPMorgan Asia CEO-CFO Conference held at New York on Tuesday. "We are going to track that goal aggressively."

The company, which has been lagging larger rival Tata Consultancy Services in profit margins of late, had implemented its in-house tool, Infosys automation platform, in 11 client projects involving around 1,100 people.

This resulted in 17 per cent reduction in the number of people. This financial quarter, the company would implement this in 45 projects where around 8,000 software engineers were engaged. For the June quarter, it had seen a 170-basis-point decline in profit margins at 24 per cent against the previous quarter. As a part of its 2020 vision, the company had expressed its intention of touching $20 billion in revenues with 30 per cent operating margins, primarily backed by an improvement in revenue productivity.

Sikka said a large percentage of jobs, especially in areas like infrastructure management and other commoditised services, would be displaced through automation. It had earlier estimated that 70 per cent of works in the infrastructure management services space could be automated.

"So, when you look at that kind of a reality, there are only two alternatives. You keep going down the path; there is a spiraling downwards path where you are progressively lowering the cost, hiring cheaper and cheaper people, and moving them into projects faster and faster," he said. "And that is kind of a vicious cycle and that is a downward spiral."

"Our experience shows that we can outperform the overall company growth by three-four times in some areas in the digital space," he added.