Infosys unveils three-year strategy to develop digital services

25 April 2018 3 min. read
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In light of diminishing profits and increasing competition, Indian tech firm Infosys has decided to revise its strategy in India to focus more on digital services. “The idea is - this is a huge market, how can we be more relevant for our clients’ future through this market,” said Salil Parekh, CEO of Infosys in India.

What happens when a market transitions from 400 million online users to 850 million in half a decade? Such is the scenario presently unfolding in India. Expanding online access has several repercussions, some more direct than others. From a consumer perspective, one of the first industries to grow in such a scenario is the digital media segment, fueled by the jump in online consumption.

From the perspective of a firm offering products or services, on the other hand, a digitally connected population offers a world of possibilities to optimise the online consumer experience. In order to complete this transition to the digital sphere, most firms require external help, usually from tech consulting firms.

Add to this the global trends of internal process optimisation through the application of the latest in cloud computing, automation and AI, and one can see why the Indian software services industry is worth $154 billion. Infosys is the second largest actor in this industry, although the firm’s strategy is in need of significant adjustments. Infosys unveils three-year strategy to develop digital servicesAccording to Infosys CEO Sail Parekh, who has only been at the helm of the firm since the start of this year, the entire organisation now needs to revolve around its digital services segment. Parekh cites a number of factors for this revision.

A boom in the international clientele is perhaps the biggest reason. A substantial digital market attracts foreign investment, and IT services firms such as Infosys offer crucial support at the entry stage, helping with market integration and fending off local and other international competition.

The need to focus on digital services is further driven by the fact that revenues and profit margins from the firm’s traditional offering are faltering. The firm has traditionally operated as a provider of maintenance services for clients’ IT infrastructure; however, the value of these services is declining, resulting in the demand for more work at lower fee rates.

As such, Infosys will look to further develop its digital services, specifically over the next three years. As elucidated by Parekh, “The first year in fiscal 2019 to stabilise where we are, the second year to start to build momentum and (the) third year to start to accelerate where we can have more and more share of our clients’ relevance and that will obviously translate, overall, to a better Infosys.”