Infosys, India's second-largest IT services exporter, plans to provide more operational autonomy to its products, solutions and platform (PPS) businesses and inculcate the start-up culture of innovation, as the $7-billion plus company remodels itself to meet the new demands of a fast-changing technology environment.
The contribution of the PPS segment is just 5.3% to the overall revenue of Infosys but this is expected to be the game changer in the near future as the days of plain vanilla IT services offering is fast getting over in the global IT outsourcing and offshoring industry.
A senior official of the company on condition of anonymity told FE, “We would like to bring in a kind of start-up buzz to the PPS segment where innovation thrives and this could be achieved by allowing them to run their business as a separate unit,” adding, “driving innovation in a large company is difficult.”
It is not clear on whether Infosys has firmed up plans provide this autonomy as it is still mulling over the various pros and cons of this new structure. However, the company official was very categorical that there are no plans to hive off PPS as a separate business.
Infosys as part of its long-term strategy has said that it is aiming at one-third revenue share each from its three main segments – IT services, consulting & systems integration and PPS.
The IT major has already installed certain structures within the organisation to drive innovation. In April this year, it had announced setting up the $100-million innovation fund to invest in products, platforms and solution ideas in line with its 3.0 strategy. The company was also very clear that it will not be restricted within the organisation and would also be interested in investing in entities or individuals outside the company who have innovative technologies.
Infosys is no stranger incubating start-ups with ventures such as Yantra Corporation and Onmobile. Yantra was incubated in 1995 within the company and was later sold to Sterling Commerce in 2004. Similarly, Onmobile, a listed mobile value added services company was also incubated within Infosys.
Though observers believe that the company could unleash more value by hiving off the PPS business as a separate company and the scale of operations would also be much higher.
“The DNA of products business is much different of the services, it is very difficult for both to co-exist.”
Analysts said that the product story