Infosys has continued its move to non-linear business models through the acquisition of automation software maker Panaya for $200m.
The Indian IT services company said the technology will help it reduce the amount of human resources dedicated to repetitive tasks. The cloud-based software will enable Infosys to automate tests to changes to customers’ enterprise resource planning systems and reduce the need for human resources.
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Panaya software tests changes to software from suppliers such as SAP, Oracle and Salesforce. Infosys will automate testing through the acquisition, once the software is integrated.
IT services firms are attempting to move away from linear business models where for every new bit of business, labour costs or full-time equivalents increase. India-based suppliers like Infosys, which have grown massively through supplying low-cost labour, are investing in technologies to change to non-linear business models.
IT and business process automation software helps this transition. IT staff spend a lot of their time carrying out basic tasks and are frustrated with the lack of time left to focus on transformational work. The average IT worker is using only half of the skills they possess because of time spent on straightforward tasks.
Infosys CEO Vishal Sikka said the acquisition of Panaya is key in renewing and differentiating the firm's services lines.
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“This will help amplify the potential of our people, freeing us from the drudgery of many repetitive tasks, so we may focus more on the important, strategic challenges faced by our clients,” he said.
This is part of Infosys’s "renew and new" strategy to use automation, innovation and artificial intelligence to make service lines more competitive.
Intellect has been raising awareness of the benefits automation software can bring to UK businesses. It said automation software is underused in the UK, which is currently in its early adopter phase.
Mobile operator O2 deployed software from Blue Prism in 2012 to automate business processes, saving millions of pounds in back-office operations and cutting its reliance on offshore recruitment to cope with spikes in workload.
Peter Schumacher, CEO at management consultancy Value Leadership Group, said investing in automation software makes a lot of sense to Infosys.
“However, expectations should be moderated in terms of the impact Panaya can have toward renewing and differentiating Infosys's service lines," he said.
"The key questions to consider are whether Panaya will give Infosys unique and difficult-to-emulate advantages over its peers. In other words, how can Infosys leverage this acquisition to create distinctive value for its customers? Given that many of Infosys' competitors are already working with Panaya, these remain open questions.”