BANGALORE: In a move that signals a significant step towards automation in the IT services outsourcing business, Infosys has struck a partnership with IPsoft, the New York-based company founded by Indian American Chetan Dube that provides tools that free engineers from mundane, repetitive tasks.
The most fascinating and influential aspect of IPsoft's technology is that it includes the element of machine learning -- or artificial intelligence as some call it -- so that companies don't have to employ an army of people to write the complicated scripts that traditional automation tools require. The system learns from doing, thus making the process of automation itself automated.
These elements have helped build 220 customers for IPsoft worldwide, including Cisco, Canon, Pepsico, British Telecom, Gap, ING, Autodesk, and Pfizer.
Infosys will use the technology to automate parts of its infrastructure management and network management services - the areas that IPsoft's platform is particularly strong in. It will also work with IPsoft to adapt the technology to application maintenance and business process outsourcing services, and over time, look at adapting it to automate even parts of its application development business.
"What robotics did for the auto assembly line, we are now doing for the IT engineering line," said Chandrashekar Kakal, global head of Infosys's business IT services, the segment that constituted 63% of the company's $7.4 billion revenues last year. He said customers to whom the technology had been demonstrated were excited. Kakal will establish a centre of excellence at Infosys's Mysore campus to do R&D, establish proofs of concepts and train engineers on IPsoft's platform. Initially, some 200 employees will be trained and that number could go up to 4,000 before long.
Speaking to TOI on the phone from New York, Chetan Dube too referred to the automotive example and said, "History repeats itself." He said the IT industry was on the precipice of a transformation unlike any before. He said complexities in
networks and applications had grown so much that traditional systems were unable to handle them. "Chief information officers are under increasing pressure from business units to ensure availability of IT resources, and ensure consistency of business outcomes, without any variance. Human processes have variance built into their DNA. Our automated systems ensure absolute consistency, and are self-healing and self-governing," he said.
Dube grew up in Delhi, did an electrical engineering degree from IIT-Delhi in 1989, and then moved to the US. He was an assistant professor in mathematics at
New York University before he founded IPsoft in 1998. Dube called Infosys an "ideal partner" because they shared the same vision. He said IPsoft was in talks with some of the other leading Indian IT companies for similar partnerships but declined to name them. However, indications are that the others include Wipro and Cognizant.
Automation possibilities are very high -- upto 80-90% -- in what are called Level 0 and Level 1 tasks, things like password resets, database failures. If a database goes down because it's full, the manual process would involve a human being expanding the capacity or purging some data to create space. IPsoft's platform will automatically do these tasks; it will also figure out why the failure happened, and prevent future failures by, say, automatically purging data that it understands to be least relevant.
Higher level tasks can also be automated, but to lesser degrees. Dube said his platform reduced the average time to
resolution of problems by 60%. For Infosys, such automation fits well into its new vision to grow revenues without adding employees to the same degree. This is necessary for it to sustain its high margin strategy, something it regards critical for long-term sustainability. For the industry, revenues have been till now directly correlated with the number of people employed, and Infosys, which already has over 1.56 lakh employees, feels it would be difficult to keep expanding this number for much longer, without running into an HR and talent management nightmare.
But that's not the only reason why IT outsourcing companies may need partnerships with the likes of IPsoft. Offshoring of IT to countries like India began because Indian engineers were substantially cheaper than engineers in developed markets. Now, the automated systems are proving to be cheaper than Indian engineers. Writing about automation companies like IPsoft and Blue Prism, a British startup,
The Economist magazine in January reported (quoting a study by research firm HfS - Horses for Sources) that Blue Prism's robots cost at most $15,000 a year, compared to an offshore IT worker who costs $30,000 and an onshore one who costs $80,000.
The magazine then quotes HfS to say, "One telecoms company replaced 45 offshore employees, costing a total of $1.35m a year, with ten of Blue Prism's software robots, costing $100,000. The telecoms firm then spent its
savings of $1.25m on hiring 12 new people to do more innovative work locally at its headquarters."
