Published & Updated as on - 2010-05-03
Infosys
Technologies plans to give the pride of place to foreign faces in its sales and
consultation teams in a radical hiring shift that the company believes will
help land lucrative deals and boost its image as a global IT powerhouse.
Infosys
will hire nearly 1,000 foreigners this year to push its sales and consultation
practice as the company turns its gaze on high-margin consulting and
transformational deals, said chief financial officer V Balakrishnan.
Overseas
markets contribute nearly 98% of the country’s second-largest software services
exporter’s business, but the so-called front-end workforce has just 5-6%
foreign members. “We have to improve that,” Mr Balakrishnan told ET in a recent
interview.
Infosys has about 550 people in its consulting
business and 700 in the sales team. In contrast, bigger rival Tata Consultancy
Services has nearly 700 consultants, while around 6.7% of its workforce
comprises foreigners.
For IT companies, consulting services
is a money-spinner, customarily holding out margins that are up to five times
more than the average deal. They also provide ample scope for secondary sales
for other divisions.
Software services companies such as
Infosys and TCS struggled during the recession as customers took to sharp
budget cuts. But recent earnings of tech majors such as IBM and Microsoft show
that sales are again humming, a telltale sign that global markets are emerging
from the shadows of recession.
IT sales, though, this time
are not driven by technology, but by outsourcing to reduce costs, said Mr
Balakrishnan. Reversing the hiring strategy was also in order because the
seemingly simpler application development and management contracts are now a
hive of fierce competition. “Some part of the business is always going to get
commoditised,” said Mr Balakrishnan, explaining the rationale behind the
company setting its sight on consulting and non-linear services.
For
this, the company felt the need to have better people in the front, he said,
adding that the recruits must have consulting expertise to heed to clients’
needs. Analysts welcomed Infosys’ move. “Functions like consultancy and
customer support are better done with local flavour,” said Gartner’s principal
research analyst Diptarup Chakraborti.
 Local staff also make
governments more comfortable just as they reflect the image of true-blue global
companies present in India, a la IBM or Accenture, that hire in swelling
numbers from the country, he said.
Infosys employs 1,13,796
against TCS’ 1,60,429. In any case, Mr Balakrishnan said, Accenture and Infosys
do the same work, though the scale is different.
Infosys,
which forecast a 16-18% growth for this financial year in its fourth-quarter
results, is praying for a rosier economic environment for its new hiring plans
to yield results. “The world has to stabilise before we can talk about growth,”
said Mr Balakrishnan. “Clients are very cautious and nobody is willing to make
a long-term commitment. People have budgets, but are taking a very short-term
view on things.”
Source: ET 29/04/10
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