Q&A: Infosys European chief BG Srinivas

Indian suppliers such as Infosys are expanding rapidly

What is your role in Infosys?
I have headed up the European operations for the past four years, concentrating on ways the business in Europe can grow. We reached close to $1bn in revenue last year.

We started restructuring the business at the end of last year to bring more vertical expertise to our customers. We now have six industry verticals - banking, manufacturing, life sciences, energy, telecoms, and communication and media. I head up the manufacturing division, focusing on aspects such as product design and development.

How does the proposed £400m acquisition of Axon fit into Infosys' strategy?
We want to expand the number of business transformation deals we form. At the moment our consulting services for SAP and Oracle applications is growing. Around 24 per cent of our global business footprint is in ERP consulting.

Are there likely to be more acquisitions of this kind in the near future?
Not really. Axon is a sizable acquisition and we need to concentrate on making it an effective purchase, so it is unlikely we will make more acquisitions in this area for the time being.

But if there is one company out there that has a strong intellectual property offering or service line footprint, we might consider making them an offer.

At Infosys, we concentrate on making a select few acquisitions and then making them work. For example, we acquired Expert Information Systems in Australia and within 18 months it had been integrated extremely well with the rest of the company.

How are you keeping up with new IT trends and the desire by businesses to adopt certain technologies such as service-oriented architecture, open source and green IT?
We encourage our clients to look at new ways of delivering services to increase their flexibility and reduce fixed costs.

We have recently launched a software-as-a-service procurement platform, including on-demand procure-to-pay and order-to-cash solutions. We are also about to launch an on-demand human resources platform.

As well as advising organisations on how they can become more environmentally friendly, are you getting any requests from clients to record and report on your environmental footprint for their contracts?
A few companies are beginning to ask for such reports but it is really just the beginning.

Do you believe you are keeping up to speed with your main competitors, such as TCS and Wipro, in your ability to offer customers new types of technology?
We have only just started to compete with other Indian providers this last year as the service industry inside India has started to grow. Our main competitors are the big European firms.

But yes, I believe we are delivering customers what they want. This is shown by 97 per cent of our business coming from repeat customers.

Will Infosys continue to build its new software development centre in West Bengal, and how will it deal with the dispute there arising from the opposition to the Tata Group's plans to build the world's cheapest car? I heard Infosys might be forced to rethink its plans?
We have just been watching the situation evolve. I don't believe we have been impacted yet.

There have been a large number of reports, following the Lehman Brothers collapse and the sale of Merrill Lynch, that a number of Indian providers have launched recruitment freezes. How has the current turmoil in the finance sector affected Infosys?
A lot of those reports are purely speculation. The Infosys planning cycle is three years, broken down into chunks of periods. This allows us to be flexible and adapt to big changes in the marketplace.

On the subject of the economy, there are mixed reports on whether Indian providers are likely to benefit from the economic slowdown in the western markets. What is your view?
We are expecting an impact and a possible slowdown as clients rethink their budget strategy. However, we expect clients that are challenged with their IT spend to play into our business model. There could be a temporary lull. Anyway, it is not the case that all sectors are going through much pain, in relative terms.

But have you noticed any change in contract size or length?
I can tell you that in the past six months we have noticed no significant changes in contracts.

And how about trends towards multi-sourcing? On average, how many providers do your customers hold outsourcing contracts with?
We offer consulting expertise on multi-sourcing strategies and we tell the customer to adopt a few best-of-breed partners. Most enterprises hold three outsourcing partners.

In what circumstances would Infosys be considered a best-of-breed partner?
In consulting, package implementation, application management and business process outsourcing.