Infosys chalks out strategy to revive consulting business

Infosys has chalked out a new strategy to revive its consulting business that has been struggling to piece together solutions which can transform its clients’ businesses.

According to three top-level executives in the know, Infosys is reshaping the consulting business into two tiers. “The logic behind this is to have strategic conversations with clients and execute larger projects — areas which have not been clearly defined in the past,” said one of the executives who did not want to be named.

This development is happening in the backdrop of recent troubles faced by India’s second-largest software exporter. In its June-ended quarterly results, Infosys posted lower-than-expected revenue numbers, largely due to unanticipated headwinds in discretionary spending in consulting services and package implementation, and delays in ramp-up of large deals.

Consulting and Packaged Implementation contributed 32.1 per cent in the June-ended quarter, almost 1 percentage point less compared with the previous quarter.

Another executive told BusinessLine that Infosys intends to have strategic engagements with each of its top 250 clients over the next year. “The long-term goal in the consulting business is to evolve it towards Design Thinking,” he added. This concept by definition means using design as a way of thinking to solve problems.

CEO Vishal Sikka has embarked on this approach, which he feels can strongly distinguish one service provider from another. Industry watchers opine that since companies have not had a strong differentiation, they have not been able to negotiate contracts to their advantage and often had to give price discounts for holding on to particular clients.

According to Peter Schumacher, CEO, Value Leadership Group, while many customers are asking for price discounts, the reality is that their bargaining power is often limited.

“The whole point is to take the conversation to the next level, be engaged in things that is of strategic importance to clients, and drive that across many accounts. It is not easy, but the sales and delivery teams are working towards that goal,” said the executive.

For example, Infosys is working with clients such as Toyota and other automotive companies on driver-less cars.

Earlier this year, Sikka said in an analyst conference that the company is working on designing a new user experience in this area.

“It is indulging in conversations which influence the client’s client — this is what will keep the export industry relevant,” said Pavan Bagai, president and COO, EXL.

Industry watchers opine that with the Design Thinking approach, there are possibilities of doing new kinds of projects and using them to get more business. This will also improve productivity of employees, which would also mean reduced hiring.

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