Infosys forecast has factored in US elections

Infosys Technologies has factored the impact of US presidential elections on offshoring trend into its guidance for the current fiscal as well as the third quarter, according to Nandan M Nilekani, president, CEO and managing director of Infosys Technologies. He was replying to a query at the company's second quarter results on how Infosys perceived the upcoming US presidential elections.

Stating that Infosys had factored the pros and cons of the outcome of elections, Nilekani said, "Offshoring and outsourcing are still debated, especially in the US on the assumption they would lead to a loss of jobs, which is not true. When businesses/enterprises become innovative, productive and profitable, they invest more to create new jobs than fire the existing ones. We believe by offshoring and outsourcing, firms in the US or Europe will benefit more to improve their business and the quality of life."

The services' component of any economy is going up. "As a result, more and more services are becoming fungible over the wire. Liberalisation in countries like India and China is adding millions of new young workers to the global work force. All these factors are creating a mega trend in offshoring and outsourcing, which is inexorable," Nilekani explained.

When asked about the reasons for its upbeat business outlook, the Infosys CEO said that though offshoring continued to be an issue in the West, firms like Infosys were creating a win-win situation for India and the US by increasing productivity, margins and employment.

Although there is an element of uncertainty even in IT business, right now "the outlook is good. The offshore growth has been double at 15 per cent against 7 per cent of onsite growth". To ensure growth, Infosys is putting in place a strategy which will also "differentiate our service offering".

"What has happened in the US for many years is now happening in other parts of the world. We are seeing increasing interest in Europe and the APAC region as reflected in our performance. Since we did the acquisition in Australia early this year, we have seen good growth Down Under. We are seeing the same in Japan and China. At this rate, the trend will be more multi-centric than a US trend," Nilekani added.

On whether Infosys was on the lookout for acquisitions, Nilekani said its acquisition strategy was not a substitute for growth.

"We will continue to grow organically. If you look at top global firms like Walgreens, Dell, Toyota and Wal-Mart, they have all essentially grown organically on strong business models. We want to emulate them. At the same time, our long-term goal is to create a company which combines world class consulting and domain skills with execution excellence of global delivery. Going in that direction, we may have to do certain acquisitions to accelerate domain expertise," he said.