Automation is the new new thing for Infosys, Wipro

Bengaluru: Infosys Ltd has tasked a former SAP AG executive with automating delivery functions across its seven services lines, even as smaller rival Wipro Ltd expects automation to reduce people deployment in its delivery side by up to 35% in three years.

India’s second-largest software exporter, which completed its $200 million acquisition of Panaya Inc. earlier this month, has tasked Abdul Razack, head of platforms at Infosys, to help bring its automation technology to its service lines, including software development, application maintenance and product engineering.

The decision to put Razack in charge is significant given the crucial role he played in developing SAP Hana, the blockbuster data analytics platform, and SAP Ganges, another technology platform, at German software maker SAP, the former employer of Infosys chief executive officer (CEO) Vishal Sikka. Razack joined Infosys from SAP in October 2014.

“It will take at least 24-36 months for us to take it (Panaya’s technology) to other service lines before any tangible results are seen,” an executive at Infosys said on condition of anonymity.

About 200 executives at Wipro have also been working on building next-generation technology platforms focused on artificial intelligence for close to two years now.

“On delivery, we see hyper-automation reduce cost of operations significantly. In three years, people deployment will come down by 35% for the same scope of work,” Wipro CEO T.K. Kurien told analysts last week in New York.

Wipro has already started using the in-house automation technologies in a few of its service lines, including infrastructure management, and the early results have been encouraging.

For instance, Wipro cut down a project’s processing time by over 90% and deployed 70% fewer engineers to execute it by using “hyper automation technologies”, Kurien said in a recent presentation shared with analysts.

Encouraged by this response, Wipro has internally outlined a plan to “hyper automate” all its delivery side operations in the coming three years, according to three executives briefed by Kurien to make the company “future ready”. These executives, too, spoke on condition of anonymity as they are not authorized to speak with media.

Local software exporters have built their business over the last two decades by helping customers across industries and locations in rolling out business software applications such as Oracle, SAP and JD Edwards.

As these companies have grown in scale, their requirements of these business software applications, too, have become more complex, thereby making the Indian outsourcers deploy thousands of engineers to perform the repetitive task of managing these systems.

Information technology (IT) vendors now want to free engineers from doing the manual repetitive tasks, such as adding an update to a software application, and are working on next-generation technology platforms that, in addition to cutting headcount and time, also promises to bring in more efficiencies. ‎

“Over the last decade, packaged systems have brought tremendous complexity around implementation, management,” Sikka told investors last month. “Manual steps involved in implementation, upgrades, change management, lifecycle management on an ongoing basis are now replaced by software so that people can therefore be free to do more.”

Both Infosys and Wipro have over 150,000 engineers working on their delivery-side business, including software testing, managing IT infrastructure and writing code for customers.

The software exporters seem to have made automation their “focal point” in an effort to retain their market share in chasing commoditized outsourcing deals, which over the last few years have been under pricing pressure, industry experts said.

For this reason, some of them call the growing embrace of automation and next generation technologies by home-grown IT vendors a “cultural shift”.

“(This is) a cultural shift for Infosys—from the historical approach to software development in isolation to highly automated environments,” Thomas Reuner, principal analyst at London-based IT research firm Ovum, wrote in a note last month.

Reuner, however, cautioned that execution remains the key in how Indian IT vendors are able to best harness these next-generation technologies as Infosys’ earlier engagement with IPsoft, the New York-based company that relies on artificial intelligence to manage computer networks, has been dubbed a “failure”.

“Infosys is still playing catch-up with its Indian peers, in terms of both financial performance and building out process automation capabilities,” Reuner said, adding that the company’s partnership with IPsoft stagnated due to management changes and issues around the impact of revenue models.

“It will take considerable time to have a positive impact on the company’s broader go-to-market strategy,” said Reuner.