India's second largest software exporter Infosys forecast revenue growth of 11.8-13.8% for 2016-17 financial year and reported its best fourth-quarter numbers in at least four years.
In an interview with ET on Friday, CEO Vishal Sikka spoke about how traditional metrics of the IT industry need to evolve, how Infosys is flattening out its organisational structure and the future of employment and hiring in the IT industry. Edited excerpts:
You earlier spoke about how traditional metrics of Indian IT industry need to give way to the new. Are some older metrics becoming irrelevant?
What I mean by that is that many of these new metrics are too small to matter in the P&L, but they are incredibly important for the company's future.
Some of the ones that I've mentioned are the number of people we've freed up because of automation - this number was 600 in Q2, 1100 in Q3 and 1700 in Q4. 1700 is not a small number, but it is small as a percentage of the overall company. So, if we're not paying attention, it has a possibility to get lost in the noise.
This number matters - when it becomes 5000, 10000, 20000, then this number will be of incredible significance. It will take several more quarters, but at some point it will grow non-linearly.
The revenue coming from new services and new products is another important area. The encroachment of artificial intelligence into the more complex parts of the business is another important area. The new high-margin services as a percentage of the overall business is another important area.
What are some of the newer metrics Infosys would like to be benchmarked against, let's say a year down the line?
Ultimately it's the impact of automation on the revenue per employee, the impact of automation on the margins, the impact of the new services and the new software on the top-line. Those four metrics I would be quite keen to track. In my office in Palo Alto I have 50 other metrics that I track - the value produced from our bench is another one...these types of metrics are very important for the future of the company and the industry.
How's your organisational de-layering exercise coming along?
We're moving forward with that. We have expanded that to two other service lines partially. And we are carefully working on that. Over the course of the year, we'll do more of it...the point is to bring more people in contact with the customers. The flatter and the more in touch with the outside the organisation is, the more agile it will be and the more innovative it will be.
What does this mean for the future of hiring and employment in IT industry?
The rate will slow down, but it will continue to rise. But not at the incredibly rapid rate that we had because the number of people per value delivered will continue to come down. This is the point of the revenue per employee increase. It happens in every industry with maturity, it has to happen in ours as well. It is already happening.