 "Vishal Sikka")
Infosys Chief Executive Vishal Sikka believes the company could deliver a triple storm of bringing down costs for clients, maintain margins and free up people for more projects by using Artificial Intelligence (AI) and integrating software tools in projects, but the key challenge was its execution to derive these benefits.
Since taking over two years ago as the first non-founder chief executive of Infosys, Sikka has attempted to bring in changes in training employees, empower teams to share new ideas with clients and bet on emerging areas such as AI to deliver projects. At the same time, he is also pushing teams to bid for more outcome based contracts that will help it earn better margins than the traditional people dependent time and material projects.
"If we just limited the domain to the work we do, the effect that we are working, instead of manual people only offering, people plus software has this triple effect: we can lower the price for the customer, improve our margins, and free up people to do other kinds of projects," said Sikka at the Citi Technology event on Tuesday night. "The key is our ability to execute on the triple opportunity. If we don't to that , then we become a victim of this downward spiral."
In July, Infosys had forecast its revenue to grow lower than it expected in April due to business uncertainty and project ramp downs from clients. Subsequently, it saw a key client RBS shut a project that Infosys was a key implementer, potentially losing $50 million in annual revenues for the Indian IT company. Soon after, Sikka revamped his key management, bringing in top performers to push for larger contracts, while hiring a former Google engineer Sudhir Jha to lead product development in its AI platform.
Sikka said that AI is already being deployed in software services firms such as Infosys to do basic maintenance work, potentially helping to redeploy people on these projects others, and could improve productivity of senior engineers who change source code on legacy systems.
" 65-70% of the time is spent on identifying the bug and what is the potential impact of the bug fixing. We can take out big parts of that with AI and dramatically improve the engineers productivity," he said.
Client budgets for IT services were still focused on cutting costs than becoming a leading indicator to spend on outsourcers to grow their business.
Sikka said that while clients and service firms invest in AI to cut costs, the bigger benefit of implementing such systems is to reduce complexity and simplify operations. He cited the effort with Mana within Infosys that targeted cutting its travel staff to 30 from 320, but as a CEO, was looking at how it reduced complexity and improved staff productivity.
Yet AI in the services industry is still new and those companies that are first movers have enormous business opportunity .
"It is still early in the cycle and it expands the business opportunity. You do more and more systems, simplify the process and improve margins; expand the scope with the same amount of bandwidth," says Sikka. "It now has a huge expansive effect. Four to five years from now, you are too late to the game, it has a contractive effect".
