Letter to the Stakeholder
LETTER TO THE STAKEHOLDER
But theres a big difference between impossible and hard to imagine.
The first is about it; the second is about you!
Marvin Minsky, the father of Artificial Intelligence
Dear stakeholder,
Three years ago, when I met the Board of Infosys for
the first time, I articulated our long-term strategy for
the second-third a vision for the next 33 years of
our iconic, globally respected company. It was a crucial
time in the history of our company, and a turning point
in the IT services industry as we knew it. The technology-
led transformation of our world, and indeed our every
experience, was becoming strikingly clear. Our company
was already facing the challenges that come with lower
differentiation and subdued growth relative to peers.
The second-third had to be not only about addressing
near-term challenges, but especially about charting
a new path that keeps us resilient and relevant in this
Dr.Vishal Sikka
Chief Executive Officer
and Managing Director
2 | Boards report
age of software-driven business innovation; a path
into higher-value work that leverages automation and
transcends it, a path into entrepreneurship where
problem-finding comes from our uniquely human
ingenuity. We articulated this strategy as Renew and
New, on a foundation of creativity and education
software and services coming together in a culture of
innovation, to deliver unprecedented value to our clients,
our stakeholders, and the world around us. The next
33 years had to be, and have to be, about being more,
about helping clients transform themselves for their
digital futures, embracing artificial intelligence (AI), and
becoming the masters and orchestrators of technology
disruption rather than the victims of it. Our confidence
for a successful transformation of Infosys would be
steeped in the intellect, learnability and strong value
system of our company, of every Infoscion.
As I write this letter, three years into this exciting
journey, this transformation has started to reveal itself.
In fiscal 2017, the results of our client survey showed
satisfaction levels at their highest in the 12-year history
of the survey, with a significant improvement in CXO
satisfaction scores. Industry analysts have endorsed
the differentiation of our offerings, including NelsonHall
for our services offerings, both renewed and new; IDC,
HfS and Forrester for Infosys NiaTM, our new AI platform.
Revenue from software-related services, including
Infosys Nia, Edge, Panaya and Skava, grew by 42% in
fiscal 2017 at a much higher Revenue Per Employee
(RPE) than the rest of the company. New services such
as mainframe modernization, cloud applications and
infrastructure, enabling the API economy, Internet of
Things, cybersecurity, digital experiences and complex
analytics showed rapid momentum with clients. We have
been able to attract, excite and retain high-quality talent
as evidenced in the addition of top talent and the decline
in employee attrition. When I started, our attrition was
quite high; standalone attrition was at 23.4% in Q1 of
fiscal 2015, and 18.9% in fiscal 2015; in Q1 of fiscal 2017
Infosys Annual Report 2016-17
it was 15.8%, and 15.0% overall in fiscal 2017. Attrition Fiscal 2017 also brought with it environmental
among top performers, the most important metric we challenges such as rising protectionism, accelerating
track in evaluating attrition, is now in singledigits. commoditization, elevated client expectations and new
competition. Internally, we had challenges to bring
All this resulted in us crossing the US$10 billion revenue
stability to our consulting business and growth to our
milestone. In fiscal 2017, revenue grew 8.3% in constant
Finacle and BPO businesses. But amidst all of this, it
currency, and for the second year in a row, our growth
behooves us to stay focused on our longer-term mission
has been in line with industry peers. We won US$3.5
to drive rapid growth in software-led offerings, to capture
billion in large deals, including committed value deals
demand in newer service lines and to renew our core
as well as framework deals in fiscal 2017, and added
services a mission to deliver consistent, profitable
five more US$100 million client accounts in fiscal 2017,
growth for the benefit of all our stakeholders.
bringing the total number of US$100 million clients
to 19. Operating margins have remained stable within Renewing our core services and growing new
our stated band of 24%-25% despite pricing headwinds services
and employee wage increases. Revenue per Full-
During the last fiscal, we grew multiple new services
time Employee (FTE) increased by 1.2% as a result of
in the areas of cloud applications and infrastructure,
automation, utilization and productivity improvements.
mainframe modernization to cloud, cybersecurity,
Automation itself released
developing new digital end-user
about 11,000 FTE worth of
experiences, advanced analytics
effort through the year, a clear
In fiscal 2017, the results and data science, engineering
demonstration of how software is
of our client survey services and Internet of Things
going to play a crucial role in our
and many more. These services
business model. showed satisfaction levels
represent a rapidly growing
at their highest in the
At the same time, we relentlessly portion of our incremental
12-year history of the
focused on optimizing traditional revenue each year, demonstrating
operating levers and costs.
survey, with a significant our continued relevance to the
Employee utilization excluding improvement in client CXO transformation of our clients
trainees reached high levels satisfactionscores. businesses.
of 81.7%. We realized the
We continued to renew our core
highest levels of net operating
service offerings, largely work
cash flow at US$2.1 billion for the year. We approved
in maintenance, operations and run areas, by driving
a comprehensive Capital Allocation Policy after taking
automation, agility and innovation into every service line.
into consideration the strategic and operational cash
requirements of the company in the medium term. In March 2017, we celebrated two years of our Zero
Distance program, which continues to drive grassroots
We continued to strengthen our management team with
innovation in every project, finding new value for clients.
internal promotions to create four presidents, including
The program has generated more than 15,000 ideas,
the appointment of Ravi Kumar S. as our Deputy COO and
and implementation of more than 2,000 innovation
the addition of Pervinder Johar as the CEO of EdgeVerve.
ideas for clients. Our focus now is on further elevating
We strengthened our organizational structure by
our innovations, including turning these into scalable
establishing industry sub-segments for agility in the
intellectual property for us.
market and for creating more management bandwidth.
There is now more ownership and accountability across In May 2017, we announced our plans to hire 10,000
the organization at the middle and senior management American technology professionals as Infoscions over
levels in contributing toward key company priorities. the next two years. Indiana is the first of four hubs where

Infosys Annual Report 2016-17 Letter to the stakeholder | 3

 we will build a strong local presence, with a focus on
education and innovation in areas such as AI, Big Data,
and more. This journey to increase our local hiring efforts
first started in the fall of 2014 with our endeavor to hire
2000+ visa-independent talent into our workforce. It was
further elevated by the inspiring work being done by the
Infosys Foundation USA to help bring Computer Science
education to the masses and close the gaps with the
skills of the future. In its first two years, more than
1,34,000 students, over 2,500 teachers and almost
2,500 schools across America have benefited from
high quality computer science training and classroom
equipment funded by the Infosys Foundation USA.
Driving rapid growth in software-led offerings
On April 26, 2017, we launched our next-generation
AI platform, Infosys Nia converging the Big Data /
analytics, machine learning, knowledge management,
and cognitive capabilities of our first-generation AI
platform; the end-to-end robotic process automation
(RPA) capabilities of AssistEdge; advanced machine
learning capabilities of Skytree; and optical character
recognition (OCR), natural
language processing (NLP)
capabilities and infrastructure
Infosys Nia eables usto
management services. Infosys
bring the power of AI
Nia builds on the strong adoption
in a purposefulwayto
of our AI and automation
our clients most
capabilities over the last year,
with more than 130 client
complexproblems.
engagements, and strong analyst
endorsements.
With Infosys Nia, we have the ability to deliver both IT
operational efficiencies through automation, and drive
breakthrough business scenarios, bringing the power
of AI in a purposeful way to our clients most complex
business challenges. For example, helping clients keep
pace with increasingly more sophisticated fraud and
enabling agility in addressing new regulatory compliance
requirements.
Our other software offerings, Skava, Edge and Panaya,
are all seeing strong traction and we continue to invest
in expanding their capabilities. We have brought all of
our software offerings, under Pervinders leadership,
4 | Letter to the stakeholder
to leverage knowledge and synergies, to help scale this
new frontier for us to great new heights.
In fiscal 2017, we made six new investments in startup
companies working in AI, autonomous unmanned
vehicles, data insights, cloud, and more all areas
relevant to our and our clients futures thus extending
the innovation we bring to our clients.
Building a culture of learning, creativity and
purpose
To strengthen the bedrock on which all of these initiatives
can thrive, we continued to focus on the most important
aspect of our transformation, our culture. To move from
solving the defined problems to finding the unknown
problems requires a deep sense of our own abilities,
both in the things we know and the things we are yet to
learn, and the belief that we can learn anything. Design
Thinking training, now at more than 1,35,000 Infoscions,
helps give Infoscions the creative confidence, as well as
the tools, to go after our clients big problems in agile
and tangibleways.
In learning and education, we
continued to work towards
empowering employees in the
critical skills of our future such
as AI and Machine Learning,
and developed completely new
programs in these technologies
that have now been delivered
to more than 1,300 employees,
with several thousand more
to be trained in the year ahead. We have made our
curriculum immersive through our flight simulator
and other experiential trainings, with over 20% higher
engagement levels. We have instituted a program to
train all new hires in three programming languages
(17,000+ employees have already gone through this
program), giving individual employees confidence in
their learnability and giving Infosys a much more agile
way of looking at the talent pool of the company. We
have created new learning platforms to meet the varying
needs of Infoscions, including the Digital Tutor social
learning platform and the Infosys Learning Platform.
Infosys Annual Report 2016-17
In employee engagement, we continued to revamp a tremendous impact on our communities in helping to
our employee rewards programs to focus much more empower and enable teachers and students alike, as
on performance. In a modern, innovation-driven Imentioned earlier.
company,every employee must be measured on
performance. In fact,the best Looking ahead
and most talented employees As we look ahead to the next 33
want to be measured on We can be the years, I deeply believe that we
performance not role maturity, have the ability to create and
nextgeneration services
or tenure, or other factors. shape the technology disruption
company, as differentiated
Itis about performance, and that is in front of us. And why
and iconic as we once were,
rewarding those with the not? Infosys has always been
a company that admires its a technology company with
passion, entrepreneurship
past and builds on it. It is the best and brightest talent
and the imagination to help
drive our transformation. As
within us to embrace the from India and from around the
part of this, in fiscal 2017, we tough choices and to move world. The very people who, over
introduced our stock incentive headlong, unabashedly, into the last 35+ years, have built,
plan for top performers, covering creating great new futures. managed and maintained the
approximately 25% of mid- to mainstream systems that we see
senior-level employees. It has today. We are exactly the people
been my personal endeavor since joining Infosys to who can learn the technologies that will transform the
enable all employees to share in the successes of the world around us, the people who can learn to be the
company, and in fiscal2017, we made the first step of this innovators, not the bystanders, not the order-takers, not
a reality. In addition, we restructured the compensation the ones optimizing the past, but the ones who find, and
of senior leaders to be more performance-based, deliver, the great breakthroughs for the next 33 years.
with a significant portion of their compensation now The ones who leverage technology to fulfill our own
coming through stock incentives, creating a more direct unlimited potential, and help others find theirs as well,
alignment with the interest of shareholders. to shape a better world at a time of pervasive global
anxiety about the future of jobs and indeed the future
Finally, we continued to be a purposeful contributor
of our humanity. We can be the next-generation services
in our communities, particularly in India and in the
company, as differentiated and iconic as we once were,
U.S. In fiscal 2017, the Infosys Foundation continued
a company that admires its past and builds on it, or
its great work in the areas of eradication of hunger
we can be a somewhat improved, but dying, previous-
and malnutrition, promoting education, art and
generation company that is mired in that past. It is within
culture, healthcare, destitute care and rehabilitation,
us to embrace the tough choices and to move headlong,
disaster relief and rural development projects with a
unabashedly, into creating great new futures. Our work
focus on solving social challenges and accelerating
in these early years of our transformation is leading
economic growth. Key projects included initiation of
us along this path. It will continue to be a challenging
the construction of an Akshaya Patra high-tech kitchen
journey, but it is one worth fighting for.
at Hyderabad, sanitation and water storage projects in
Chennai, donation of medical equipment to the Vittala
International Institute of Ophthalmology, support of
computer education in schools in multiple states,
panIndia relief support to martyrs and ex-servicemen, Dr. Vishal Sikka
Palo Alto Chief Executive Officer and
and contribution to the Swachh Bharat project, among
May 19, 2017 Managing Director
many other impactful initiatives. In the U.S., we have had

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