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Non-linear Growth: The Road Ahead for Indian IT Outsourcing Companies

Vol 23, No 2; Article by YLR Moorthi; June 2011

The Infosys Experience: In Conversation with S Gopalakrishnan, CEO and MD, Infosys Technologies

Indian IT outsourcing companies (major among them being the SWITCH companies -- Satyam, Wipro, Infosys, TCS, Cognizant and HCL) have grown in the past by increasing their head count and earning revenues proportional to the number of employees. While such 'incremental' initiatives have made for steady growth so far, with the bigger companies already reaching a head count of 100,000 employees, the future may perhaps lie in the realm of 'disruptive' initiatives and non-linear growth.

This paper first outlines the disruptive and the incremental initiatives of the SWITCH companies and and then follows up with an interview with S Gopalakrishnan, CEO and MD,  Infosys Technologies.

Some of the mechanisms of incremental growth adopted by SWITCH companies include rapid growth -- assisted by an English speaking and relatively low wage force, technical education and a proactive government policy, and the ability to spot the potential of the outsourcing market quickly and build on it; policies to attract, train and retain manpower; increasing the depth of engagement with existing customers rather than scout for new ones; using solution accelerators or re-usable components and developing standardised templates for specific industries; training employees to deal with the new requirements, such as a shift towards consulting; cloud computing; creating value for all stakeholders since interdependence is a critical factor in ensuring long-term stablility; moving to the higher end of the spectrum of services; using nuanced and intelligent pricing; and building in flexibility to execute the same strategy differently.

The more difficult 'disruptive' initiatives include branding, focusing on product IP, acquiring the deep domain knowledge required for end-to-end business consulting,  and expanding their geographical spread and skill base through acquisitions.

Aiming for non-linear revenues to account for a third of the company's revenues in future, as against the present 10%, S Gopalakrishnan, CEO and MD,  Infosys Technologies, spoke to Prof YLR Moorthi about how Infosys is taking its 'disruptive' initiatives forward.