1. Vishal Sikka takes IT services industry to task over low-cost model, quick fixes

Vishal Sikka takes IT services industry to task over low-cost model, quick fixes

Infosys CEO Vishal Sikka describes current state of IT services industry, a business model of lower costs, as a 'depressing reality'.

By: | Bangalore | Updated: November 13, 2014 12:37 PM
Infosys has under CEO Vishal Sikka started numerous initiatives to usher in a new business model. (Reuters)

Infosys has under CEO Vishal Sikka started numerous initiatives to usher in a new business model. (Reuters)

Infosys CEO Vishal Sikka on Wednesday described the current state of the IT services industry — a business model of lower costs — as a “depressing reality” thought he felt this was also an opportunity to think of doing something new.

Delivering the keynote address through videoconferencing at the inaugural CeBIT India fair here on Wednesday, Sikka said, “As I speak to you, it is my 100th day as the CEO of Infosys. I was not deeply familiar with the services industry until recently. As I had thought about the opportunities in front of us and the current state of Infosys, I see a tale of two cities — on the one side, we have a great opportunity in front of us to help accelerate the reshaping of world with software. But at the same time, I also see the reality that we are currently in — that is a somewhat depressing reality.”

The Indian IT and BPO services industry has recorded exports of $86 billion for FY14, and this is projected to touch $100 billion in FY15. The dominant business model is the principle of being faster, cheaper and better.

Sikka, who is the first non-founder to head India’s second largest IT services exporter and comes with deep technology expertise, has been a strong votary of change in the current thought process.

“I find all of us in the industry on a downward spiral, it is like a treadmill of increasingly lower cost, hiring people faster and faster from more and more mediocre places, training people less and less, putting them into job faster and faster. I think that is a wrong direction. I think there is a better direction. I think we can do better than that,” he said.

Infosys has under Sikka started numerous initiatives to usher in a new business model that includes concepts such as design thinking, continuous learning, automation and artificial intelligence. The IT major is also aligning more closely with the start-up community and giving greater thrust to its product portfolio.

Sikka also called for greater alignment with clients to be strategically relevant for them. “We can work with our clients on the challenges that they face, not just on lowering costs. Labour arbitrage and staff augmentation are depressing ideas. We can be better partners on the basis of innovation, intelligence, automation and techniques.”

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