Salil Parekh has spent three years shoring up Infosys’s foundations and setting the stage for future growth. Parekh tells ET Prime’s Jochelle Mendonca and Shishir Prasad about the building blocks being put in place for the company to meet its ‘internal’ targets. Edited excerpts:
How would you judge the last three years of your tenure?
We’d set the objective to put this game plan across three years, but if you look at how we had articulated the approach, the focus was very much on building capability on what clients were looking for — which was mainly around the digital area and automation area — and then focus on what was the right thing with respect to employees, which was the big reskilling push that we ran at that time. So that has been the focus of attention.
We thought it would take us three years — given that there are always ups and downs and no one could have predicted what we have seen in the last 11 months — but we have seen the acceleration because the key was putting all the capability building and making sure getting the employees reskilled.
The other thing, which was not defined so explicitly, was bringing everyone together within Infosys and making sure it was a ‘one Infosys’ approach within the market and more unified. Of course, there are a lot of things still to be done, now that we have a foundation to go over the next several years.
One of the key things you did was boosting the large-deals team. Infosys won over USD7 billion worth of large deals in Q3 FY21. Would that be the new baseline for large deals?
Large deals are volatile. You can’t predict every quarter, but on an annualised basis you will see it has gone up every year for the last three years quite significantly, and on an annualised basis we will have a target. We do have an internal target on large deals. Within that we have a distinction between what is a new activity and what is a renewal activity. Without a doubt, USD7 billion we are delighted with, but it may not be that on an annualised basis. It will be a much higher number than what we have been seeing in the past.
You say large deals will be a higher number than in the past. In FY20, you had over USD9 billion in large deals. So far, in FY21, you have already beaten that. How do we think of large deals factoring into Infosys’s growth?
Large deals are a critical element to help with that. So my sense is that this will continue to be a bigger part of our overall activity, but it is not the only element. We’ve done a lot of work in building new digital capabilities and reskilling and automation and, of course, deals will be a part of that.
You’ve talked about internal targets. You had one where digital service lines like cloud and analytics would grow to USD1 billion. Now there is a USD25 billion target by 2025. What kind of building blocks are you putting in to meet these targets?
As you said, there are internal targets but that is not the main driver. The main driver is what clients are looking for. In looking at that we will add more capabilities to our digital work, which has crossed 50% of revenue and grown at 30% in the last quarter. There are many components of digital which are growing faster still. On acquisitions, we have an active outlook. If you saw the previous quarter, we did three acquisitions. On an ongoing basis, acquisitions will continue. We will look at some medium-sized ones, but the main focus is to enhance digital capability. Anything else will be more opportunistic.
The large-deals teams will be further enhanced but there is no one specific thing that will help us. We are winning market share, if you look at the last few quarters, or a year and a half. That needs to continue. Because once a client trusts us to do more and more of its digital and cloud transformation, more capability will be built. We will win more market share, and, therefore, the growth will follow.
There is an arms race building in the cloud space. How is Infosys looking at this space?
We were the first, I think, to launch a dedicated cloud capability called Cobalt. Some of our peers very soon were trying to follow in that. What we are trying to build is a comprehensive platform. A lot of people may be talking about it, but what we have built is extraordinary and we announced it after we built it. It wasn’t like we announced it and then started building.
Infosys wanted to win back the bellwether title. Do you have it back and will you keep it?
My focus is much more on what clients want and making sure we do that. All the other elements such as what you are describing is what people outside are looking at. Our focus is what clients want.