How Infy plans to capture the digital market

As IT majors face a decline in their legacy business, they are realigning their sales strategies to push up revenues from newer technologies.

In a bid to push sales in digital space, India’s second largest IT services company, Infosys, is embedding ‘digital specialists’ to select base of clients who are in the advanced stage of adopting newer technologies for transforming their businesses.

The Bengaluru-based firm, which started this practice last quarter, said it was helping it to be precise on its offerings with greater understanding of the client needs.

“For some of our identified clients, we are embedding what we call as ‘digital specialists’ in each of these accounts. They are experts (in various digital technologies) and understand digital transformation.

"They can be architects or people with strong domain background who work closely with our sales people and help in shaping the conversation with clients,” U B Pravin Rao, chief operating officer at Infosys, told Business Standard.

Though it’s early days to quantify the outcomes, Rao said, the company was hopeful of reaping the benefits from this in coming quarters.

As IT majors face a decline in their legacy business, they are realigning their sales strategies to push up revenues from newer technologies.

Infosys has roped in a global consultancy firm, McKinsey, to sharpen its sales strategy for winning large deals.

In FY18, Infosys’ revenue from digital services stood at $2.79 billion, constituting 26 per cent of its total earnings.

In the June quarter, the share stood at 28.4 per cent at $803 million at a revenue base of $2.83 billion.

To raise digital services offerings, the firm is  focusing on re-skilling of employees and setting up digital studios and hubs.

"Almost all the incremental investment is going into digital, from re-skilling of employees to equipping the sales team with new strategies," Rao said.

He also reasoned the lowering of operating margin by the company for this fiscal to higher investments into building expertise in new technological areas.

"This time, we have guided for a lower margin, primarily because we want to invest in these new areas. This is just a short to medium-term thing," he said.

Infosys has lowered its margin guidance to 22-24 per cent for this fiscal from 23-25 per cent a year earlier.

Apart from reskilling, the company is also making specific interventions to check the high employee attrition which shot up to 20.6 per cent in Q1 of FY19.

"By and large, attrition is under control except for the last quarter when it suddenly shot up.

"We have done some intervention since then and our belief is that in a quarter or so, it should be back to normal," Rao said.

Photograph: Vivek Prakash/Reuters