Infosys to club BPO unit’s services with its own in bid to revive growth

Bengaluru: Infosys Ltd, India’s second largest information technology (IT) company, plans to bundle services offered by its business process outsourcing (BPO) subsidiary with its own in an attempt to revive growth in the latter.

“So, the way it will work is that many of the service offerings of the BPO can work across all service lines,” said an executive who declined to be named.

Infosys’s decision to align the sales teams at BPO and IT services, according to many equity analysts, is logical as globally, companies from large banks such as Citigroup Inc. to retail behemoth Wal-Mart Stores Inc. want their IT vendors to offer their entire range of services.

Another executive said that the sales team at Infosys BPO, around 100-strong, will work with their counterparts in IT services, while the delivery side will continue to work like before.

Both executives declined to say why the strategy of bundling BPO offerings with the remaining service line solutions had not been deployed earlier, given that rivals Tata Consultancy Services Ltd (TCS) and Wipro Ltd already do so.

Under chief executive officer Vishal Sikka, Infosys is in the early stages of a turnaround, with the Bengaluru-based company recording industry-leading 9.1% growth in dollar terms (13.3% in constant currency) in the year ended 31 March.

However, Infosys BPO and EdgeVerve division, the products and platforms subsidiary, underperformed. Infosys BPO’s revenue rose just 0.83% to $465.5 million, 4.9% of the company’s $9.5 billion revenue.

The new sales strategy is part of Sikka’s effort to revive the fortunes of its BPO division, which employs more than 32,000 people, the two executives said.

Until 2013, Infosys BPO grew faster than the IT services firm. Over the past two years, though, it has struggled for growth, and slipped behind the BPO units of TCS and Wipro.

TCS’s back-office unit is now close to four times the size of Infosys BPO.

Infosys Technologies Limited