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Infy’s Sikka, Wipro’s Premji warn tough road ahead for IT sector

business Updated: Jan 04, 2017 00:44 IST
Kalyan Subramani

Wipro Chairman Azim Premji.(AP)

Vishal Sikka, chief executive of India’s second largest software services exporter Infosys has cautioned the company’s 200,000-odd employees of the challenging time ahead for the $10 billion company. Joining him in this is Azim Premji, chairman of the third largest software services exporter Wipro who also penned a 2017 opening letter to 175,000-odd employees said the events in 2016 had raised questions and obstacles that could not be ignored.

In his new year message to the company’s employees, Sikka who has completed a little over two years at the helm of Infosys wrote “not just mechanically execute the jobs we are handed” and “there is a long way to go, and the road ahead is long and not easy.”

He further said, “We must remember that operational excellence is an imperative for each one of us. We must focus on delivering the best solutions in the smartest, fastest way possible, and not give up or give in to weaker instincts.”

While Premji wrote: “These questions have arisen from developments in the political arena, from the fast unfolding environmental crisis and from forces that want to shape the world into a place of exclusion, conflict and suspicion”.

He urged his colleagues to take a broader view of their work with an objective of helping disadvantaged people. “The importance of this success of Wipro has become manifold more, because it’s the success of Wipro that enables the possibility of making a difference to some of the most disadvantaged people in the world,” Premji wrote.

Sikka, since he took charge of the company in August 2014 has been stressing on automation and innovation that he expects to drive the company’s future growth that is facing severe pricing pressure and other challenges, that is having a direct bearing on the company’s revenue growth during the current financial year.

“Often teams deliver only what is told without going beyond the given scope and with a lackadaisical attitude towards greater value creation. This can no longer be the case,” he wrote.

He also warned that big political changes across the world like Brexit (Britain exit from European Union in June this year), US Presidential election that saw the victory of Donald Trump as the 45th President of the US are not as big a disruption as changes in technology and digitization.

“Brexit, the American Presidential election, demonetization, cyber security, the refugee and terrorism situation were the events that seriously changed the way we viewed the world, but perhaps that biggest disruption is the one that has been proceeding irreversibly and unstoppably in our times is the accelerating force of technology and digitization,” he wrote.

One of the key planks on which Sikka hopes to bring back Infosys’ industry leading growth rate is move away from a cost-arbitrage business model to one that allows Infosys employees dig deeper into clients business for innovative solutions.

“We will not survive if we remain in the constricted space of doing as we are told, depending solely on cost-arbitrage, and working as reactive problem-solvers,” he said.

Sikka’s warning also comes at a time when double digit revenue growth over the last two quarters has come under severe pressure. All major IT companies including TCS, Infosys and Cognizant have in the recent past have either indicated or have clearly stated that the growth for the rest of the year will be muted at best, with some like Infosys and Cognizant even revising the revenue guidance for the full year to a little less than 10 per cent. Recently Nasscom had revised the overall revenue growth forecast for the industry to 8-9% from 10-12% it had guided at the start of the financial year.

Infosys and Wipro will be announcing the third quarter results for the current financial year on January 13 and 25 respectively.