And because our costs go together with the labor and the dollar, I don’t think it will be as strong as that, but I would expect maybe moderate increases based on just the pricing in TP. Now consulting has also got both labor and inflation built in. And when we are seeing 6%, 8%, 10% increases in labor cost, it is, I think, appropriate to be able to pass some of that on, albeit with a lag. And you heard Jim talk in his prepared remarks about that, that is some of what is coming through in consulting. If there remains underlying labor inflation, I fully expect to be able to pass that on, again, with a bit of a lag to clients in consulting because, otherwise, that’s not a healthy business to go on. I think on the rest of software, except TP, I would expect that as labor inflation is there, those elements do come in effectively on pricing, renewal rates and so on.
But I’d also say it’s a competitive market, and you have to remain competitively priced to where the others are. So I would say it’s in those two: TP, consulting and then in other elements of the portfolio that pricing can play a role. By the way, our renewal rates are a very strong indication that these are portfolios that provide tremendous value to our clients, but we remain competitive on price.
Jim Kavanaugh: Yes. I mean our strategy overall has always been around pricing for value, right? But, David, just to put it in perspective, last year, we all dealt with a very — and we’re still dealing with a very highly inflationary environment that was somewhere anywhere, what, 3, 4, 5 points above history overall. That’s kind of what we’ve been talking about is a disproportional price in ‘23. You’re not going to get that every single year, to Arvind’s point, but I’ve always said pricing optimization is a direct correlation to the value and differentiation you offer to clients. You got to bring value to clients, or they’re not going to accept the pricing. And we’ve been seeing good take-up with our mission-critical transaction processing.
Arvind talked about the human capital-based business, the consulting, et cetera. But just quickly to wrap on your second question, David. We said entering the year, remember, we came off of December, where we had a shortfall leaving much more on the balance sheet and collected in working capital. Working capital for the year is probably somewhere around $400 million to $500 million, like you said, and that’s a tailwind coming off of last year. The remaining piece of the $1.2 billion of free cash flow growth year-over-year is the fundamental improvement in the operating discipline of our revenue and operating margin and cash from profit.
Patricia Murphy: Hey, thanks, David. Let’s see if we squeeze two more in. Let’s go to the next question.
Operator: Thank you. The next question is from Keith Bachman with BMO. You may go ahead.
Keith Bachman: Hui, many thanks for the question. Arvind, I wanted to direct this to you, if I could. You’ve talked about the success you’ve had, even at these early stages of signing new AI offerings in the consulting side of the business? How are you thinking about the supply side of the business? And what I mean by that is, as you look at over time, the software development process, as you talked about that in Orlando, is going to become much more efficient. And so if your consulting business is really a seat-based model that drives revenue and if those developers are increasing productivity by, I don’t know, 30%, 40% because it’s gen AI, presumably, clients will want that back. So how do you think about the disinflationary forces associated with gen AI on delivery side of the model, which is, I think, separate and distinct from the opportunities associated with new demand sources?
