IT software major Infosys is increasingly using automation to drive down costs for its customers replacing people-only projects with people plus software projects.

This has impacted the company’s per capital revenue while growing its operating margins, the company’s top official said at an analyst meet last weekend.

Addressing the Barclays Global TMT (technology, media, telecom) conference, Infosys CEO and Managing Director Vishal Sikka said in fixed price project, the number of employees per project “becomes less, plus the software gets added into that….that has a direct impact on the per capita revenue as well as on the margin.” He said that Infosys is using its own automation platform to bring more repetitive mechanisable projects carried out by software instead of people. “That number will continue to increase as we go forward. …the extent to which we are embracing automation as well as in other areas, in verification and in BPO, that they are embracing automation is extraordinary,” Sikka said.

Huge opportunity Pointing out there is a huge opportunity to bring automation in fixed price projects, the company’s CFO, M D Ranganath, said during the last two quarters (Q1 and Q2), there has been a collective savings of about 1,000 FTE (full time equivalent: measures the workload of an employee). He said the company has so far trained about 62,000 people in design thinking. Sikka, who joined Infosys 15 months ago, said the plan to get back to industry leading growth within a three-year timeframe is on track.

Ranganath said internally, the company is focusing on five parameters to ensure that this target becomes a reality. As per the first parameter, Infosys is already winning large deals and now has the ability to absorb any kind of hiccups in any quarter. On an average, till last year, the average used to be about $450 million to $550 million TCV (total contract value) per quarter. This has now gone up to about $800 million plus.

The second piece is about top account growth. In the fourth quarter, there was a negative sequential growth, but in the first two quarters, they have grown 4-5 per cent. The third one is about attrition, which has stabilised to around 14 per cent from a high of 20 per cent sometime ago.

Utilisation rate The fourth parameter revolves around utilisation rate which used to be mid-70 per cent and now has gone up to about early 80 per cent while the last one is about the per capita revenue which is expected to take some more time.

As far as margins are concerned, the goal is to be at 25 per cent (+/- 1 per cent) which the company believes it is on track to achieve it. Ranganath said Infosys has empowered its leaders with ownership of the verticals they head. “If the leader wants to improve utilisation or productivity, there is clear ownership. There is one person you can talk to and get it done.”

To a query from an analyst, Sikka said what differentiates the company from the others is the fact that it is able to carry out “the most extraordinary software projects of our times at a time when the world is being transformed by software.”

He said for Boeing, the company is working on a project to capture the knowhow of retiring people into a knowledge based, into an AI (artificial intelligence) based system and how that can help them continually lower the cost of maintaining airplanes through their generation.

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