We will ensure zero risk to our business, promises Infosys COO Pravin Rao

Whistle-blower allegations notwithstanding, Infosys is not taking even an inch of focus away from its strategy and execution plan, says its Chief Operating Officer U B Pravin Rao. An executive director in the board, Rao, in an interaction with Bibhu Ranjan Mishra and Debasis Mohapatra, says the IT services firm is in a much better position today. This has already been reflected in its performance, and it’s only going to get better in times to come. Edited excerpts:
 
Just when most thought that Infosys is returning to a steady state, fresh trouble seems to have raised its ugly head. How’s the mood in the company, given the current state of affairs?

 
The mood is optimistic. We had a very good last quarter, and, we posted double digit growth for four quarters in a row. Growth is also very broad based as six of our business segments witnessed double digit growth. Digital, which accounts for around 38 per cent of our total revenues, grew more than 38 per cent last quarter. We also had the highest ever large deal wins while attrition has also come down. Some of the operating parameters are at their highest levels.
 

But are these allegations not a distraction for the management?
 
We try to make sure that we don’t get distracted. The moment this (whistle blower allegation) hit the news, we have been very proactive. We have reached out to all stakeholders, including clients and industry analysts, among others. We have reassured them that it’s business as usual for us. We are committed to execute our plans and there is no let off to it. As an organisation, we are very resilient and will make sure that there is zero risk to our business.

 
So, there’s no apprehension from the clients’ side?
 
Obviously, we have a diverse set of clients and some had initial apprehensions. But once we assured them that there is no let off in our commitment to them, they have been comforted.
 
It’s alleged that some of the recent large deals you had bagged come with zero margins? Is there any change in policy on this front?

There is absolutely no change in our large deal strategy. As we have been saying in the past two years, our strategy in the large deal space has been 'price to win' and 'deliver to earn'. In the current situation, if you want a fair share of deals, you have to be competitive. Internally, there is a lot of focus on optimisation, automation and other things, which have helped us in sustaining margins despite (pricing) pressure. We can’t comment on what kind of margin we go after. But at the end of the day, that space is extremely competitive and you have to be aggressive. Our win rate has also improved in these years.

 
Are you saying none of the large deals you have won in the recent past are margin dilutive?
 
We look at it (large deals) as a portfolio. These are three to five year deals and there are enough levers available to us to improve on the margins.
 
Do the current allegations reflect internal dissension within the organisation?
 
At the end of the day, we should bring comfort on the outcome. In fact, our results have been fairly positive in the last two years. If there were a lot of distractions, that could have been reflected on our performance. It is very difficult to comment on the motivations (behind these allegations). At least, at our level, we get comfort from the quality of our leadership, our talent base, and the support we get in our organisation.

 
As a member of the board, do you think the management should always keep the board in loop with regard to specifics of large deals?
 
No. We have a non-executive board and it is not involved in the day-to-day running of the company. We have a very well-defined large deal protocol with various checks and balances depending on the size of the deal and risks involved. So, before it comes to the management, it has to be approved at various levels.
 
So, do you believe that the company is in a much better position (under Salil Parekh) than it was in past years?

 
We have done half a dozen new things in the past two years. We believe that we are very strongly prepared for the digital future.

Amid global uncertainty, how is Infosys going to tap the emerging opportunities in the digital space?

I think, we started reporting digital when it was 25 per cent of our revenue and now it is close to 38 per cent. We have defined digital very well and made a lot of investment for building our capabilities. At the same time, we are also trying to bring in extreme productivity and automation on the core side of business.