By Debojyoti Ghosh| May 16, 2014
B G Srinivas, President, talks about the roll out of the new structure at the company, it's tenfold growth in Europe over the last decade, plans for expansion and acquisition in the continent, and comments on being a top contender for the company's next CEO post
In an attempt to energise its sales engine, India’s second-largest software-services exporter Infosys has realigned its local leadership structure across major markets. The initiatives were part of the company’s restructuring plans announced earlier this year.
Q. In January this year, Infosys announced the realigning of its business portfolios under its two newly appointed presidents (B G Srinivas and UB Pravin Rao). It's been four months now, how is the new structure shaping up?
What we have done in the last four months is to ensure that not only the next level of leadership is in place, but also their reporting structure including regional market heads focusing on the US and Europe markets. We have also ensured next level leadership by industry verticals. We have enhanced the local leadership structure in terms of go-to-market (client-facing functions).
On the delivery side we have ensured an integrated delivery system. We have made certain changes specifically in technology to ensure that there is a focused unit which is more horizontal. We have consolidated some of the new technology areas like digital services and analytics.
Q. Give us some idea on the new structure across business units?
We have integrated cloud and infrastructure services under Vishnu G Bhat (senior VP, unit head, cloud, mobility and infrastructure management services.) It is a big bet for Infosys because we see a lot of opportunity in the infrastructure services space. We are making big investments to enhance our presence in that space. Another key area for us is analytics and we are exploring beyond big data and traditional analytics offerings, under Anand Swaminathan, (VP, unit head, analytics). We have consolidated digital services under Suryaprakash K (senior VP and unit head, digital and advanced technologies). These are the additional changes we have made to strengthen the delivery capabilities and to build scale as part of the new structure.
On the sales side, apart from putting the regional managers business vertical wise across different markets, we have also increased focus on new business development and adding new accounts. We have ensured that every vertical unit has a leader in every region.
Q. Europe has been growing despite its macro concerns. What has led to this growth? How is Infosys looking into the market?
In the last ten years, our strategy and investments in Europe has definitely paid dividends in terms of the returns. If you look at our growth rate in Europe, we have grown ten times in the last ten years. Very few organisations of our size have managed to record such a growth rate. From $220 million in 2004, we have grown to $2 billion in terms of revenue by FY14. This shows that our strategies and investments are in the right direction. We have grown at a compound annual growth rate (CAGR) of over 30 percent in the last ten years.
Europe is not a homogeneous market so you need to be relevant in specific countries within the market. Our go-to-market strategy is focused across specific countries in the region including the UK, France, Germany, the Benelux region, and Switzerland. We are also seeing opportunities in Italy and Spain. We have 21 offices in Europe with over 8,500 employees across the continent.
Q. What has been your strategy for Europe?
Over the last few years we have ensured that we have a strong local presence in these markets. In Germany and France we have put in place a country head structure to build local capabilities and ramp up our presence.
We have also ensured strong near-shore centres in Poland, Czech Republic and Romania as part of the Lodestone acquisition (Infosys acquired the Switzerland-based consulting firm for $349 million in 2012) to cater to business needs in the continent which requires us to be in the Eurozone and with local language capabilities.
We have tailored our software platforms, intellectual properties and services to the specific needs of the European market. Our consulting capabilities have always been very strong in the continent, which has helped us grow our business in the region despite the macro challenges.
Q. Are you exploring any new markets in Europe?
We continue to be focused in markets like UK, France, Germany, Nordic and the Benelux region. Italy as a market is opening up so it’s a new area of focus. There is so much to be done in the Nordic region. The region offers immense potential. Germany and Switzerland are doing very well, they are our strongest markets in the region. The Lodestone acquisition has been a big push and has brought in significant local capabilities in these markets. However, UK contributes most in terms of revenue in Europe and it continues to grow. France is a small market, but it is opening up slowly.
Q. Any acquisition plans in the continent?
We are always looking out but nothing specific to one country. It all depends on opportunities that can help us add capabilities and intellectual properties that we can use to scale up. There is no specific deal size. Lodestone which we acquired two years ago had a revenue base of around $220 million. We are looking at small to medium size companies.
Q. You are seen as one of the frontrunners for the CEO’s role at Infosys. How do you feel about it?
The process is on. The nomination committee is working on it. We will communicate at the right time. At this point, I can only say that like other candidates who are fortunate to be part of this process, I am happy to be part of this selection process. Let’s leave it at that and wait for the process to go through.