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Infosys: Getting Ahead with Zero Distance, Going Deep with MANA

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Since his appointment as CEO of Infosys, a key message of Dr. Vishal Sikka has been that automation and AI are about the ‘amplification’ of the human, and that this has been true of technology for centuries. Here is one of many similar bold visionary statements made during his early months: “we see an opportunity to launch a great human revolution, where we are able to achieve much higher productivity levels, to bring much more innovation, where we are able to paraphrase Prof. Mashelkar, ‘Do More With Less, For More.’ I refer to this as the next generation of services and we are building Infosys into such a next generation services company” (taken from Q1 FY15 earnings call). 

Twenty one months after his appointment, Infosys is on an upwards trajectory:

  • The company finished FY16 with a strong Q4 (ended March 31), 15% y/y constant currency revenue growth, higher than TCS for the first time in many years. Full FY16 revenues were up 13.3% in CC, ahead of initial guidance; and the number of large deal signings continues to grow
  • In terms of shareholder value, the introduction to Dr Sikka’s keynote address in this year’s Confluence user event in San Francisco reminded us that the market cap of Infosys has increased by over 40% (to $44bn) during this period
  • Behind these headline figures, there is a palpable improvement in employee morale, and our perception is that client confidence is restored.

As such, the tone at Infosys Confluence this year was celebratory as well as visionary.

Using the interlinked motifs of Automation, Innovation, and Education, Dr. Sikka discussed some of the key initiatives started since his arrival, distinguishing between:

  • Breakthrough innovation, e.g. the Aikido services launched last summer (which, at the time, we felt to be style over substance), and...
  • Grass roots innovation, e.g. Zero Distance projects (where the aspiration in every project is to innovate from the bottom up) launched March 2015, and Design Thinking (DT) training. Both of these have scaled, with a rate of adoption that Sikka describes as ‘astounding’. Around 90k employees have now gone through a one-day DT workshop, and 8.5k Zero Distance (ZD) master projects are currently under way, with 500 client testimonials for ZD projects already gathered. Clients we spoke to who have experience of ZD projects were appreciative of what was described by some as a ‘free service’, while those with no ZD experience yet were keen.

The big new announcement at Confluence 2016 was the launch of a ‘breakthrough innovation’ like Aikdo: the Infosys MANA AI portfolio. MANA (which includes the Infosys Automation Platform), is not a platform, more a toolset of technologies and techniques such as ontologies, probabilistic networks & inference, NLP, machine learning & neural networks, rule-based automation, process mining & forecasting, discrete event simulation, and so on. MANA, we heard, is a Polynesian word meaning a pervasive supernatural power that flows through all things. As with the branding of ‘Aikido’, the spiritual interests of Infosys’ CEO are evident.

A key differentiator in Infosys’ approach to AI with MANA is that it starts by targeting L3 activities and identifying bugs in code (with some level of self-healing), rather than the conventional approach of starting by automating L1 and working up to identifying eligible areas in L2. Infosys proclaims MANA as ‘reinventing the reinvention of IT landscapes’.

MANA is already live with five organizations (including Infosys internally) and Infosys is aiming to have 25 use cases within a year. At Confluence, we heard about two use cases.

The first use case is in order management processing at an Australian telco client. Multiple systems are involved in order processing. MANA:

  • Predicts when orders are at risk of being delayed/not fulfilled, identifying where a particular order is stuck within the  systems, and does some automatic code fixing (so preventing tickets). It also analyzes order pathways  to expose process inefficiencies
  • Where it is not able to do self-healing, MANA consolidates sources of information (source code, system logs, run-time logs, defect logs, user interactions, etc.) and uses probabilistic models to localize the bug and indicate where a code fix is needed, showing the source code components and providing associated test plans.

Beyond the cost benefits, the client noted the benefits could include improved customer experience and increased speed to cash from faster order activations (self-healing orders getting a special mention), also the near real-time information on customer order status.

The second use case is Johnson Controls Inc. (JCI) facilities equipment (chillers, generators, etc.) on Infosys campuses. MANA is being used for predictive maintenance. Again, JCI noted that MANA offers advantages beyond cost, such as sustainability and reliability, etc.

Infosys is also applying Mana internally for travel & expense management.

With automation, Infosys clearly wants to be an early adopter, not a fast follower. It is still early days: Infosys’ revenue per capita declined in FY16, with committed pricing reductions still outstripping any cost benefits from automation. We asked COO Pravin Rao when Infosys expects its investments in automation and AI will begin to have an impact on productivity. Apparently, this may start in H2 FY17, and become more evident in FY18, as Infosys makes progress against its targeted $80k revenue per capita by 2020.

Another theme at Confluence was a focus on nurturing a mind set of ‘being improving’, a nice reflection of the fact that continuous improvement is critical to success in IT services and BPS. This was certainly apparent in our conversations with BPS execs.

Among our conversations with execs, we also discussed:

  • Workforce plans: The move to automation and increased productivity is having a major impact on Infosys’ hiring strategy. While other BPS vendors are continuing to enhance their price-competitiveness via shifts in personnel to tier-2 locations in India, Infosys intends to largely retain its current delivery footprint in India and is not looking to add lower cost delivery locations there. Indeed, the company is also reducing the number of H-IB visa applications, intending to increase onshore recruitment at graduate level. The company is increasingly seeking benefits from client proximity and problem-solving backed up by automation rather than competing on people costs
  • Infosys’ acquisition strategy: This appears to be fundamentally different from most other IT service providers currently. While nearly all say their acquisition strategy is IP-led, they are typically targeting IP at the enterprise application level within a target vertical. Infosys’ focus is on ‘horizontal’ enabling software and capabilities that can be applied to augment delivery across service lines and domains, much as it is doing with Panaya, now being used for testing services as well as ERP upgrades.

Infosys’ Zero Distance approach (and the detailed focus on the client’s business by delivery personnel that it demands) and MANA are both potentially significant differentiators for a company that two years ago appeared to have been in danger of losing its mojo. MANA could also potentially be a major differentiator in BPS services where Infosys is also managing the associated applications, though client acceptance of full-stack IT and BPO services remains limited outside of new initiatives such as BPaaS. This is the sort of initiative that Dr Sikka envisioned when he talked about making Infosys a ‘a next generation services company’. Infosys is in a hurry: there will be more.

Comments to this post:

  • Very interesting. Will like to know more about MANA

    May 11, 2016, by Pravin Deshpande

  • Sure - we will be publishing more on MANA in the next few weeks.

    May 11, 2016, by Rachael

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