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French information technology services and consulting company Capgemini India’s Chief Executive Officer Aruna Jayanthi, also a Member of the Group Executive Committee, tells Bibhu Ranjan Mishra about what drives the company to continue to grow its India operations. Edited excerpts:
Is your expansion of India operations testimony to the fact that offshoring to the country by your global clients has also increased?
Certainly the pace of rightshoring (offshoring) to India is picking up. India alone handles the bulk of our delivery for Capgemini today. Around 37 per cent of the rightshoring works for Capgemini happens out of India as compared to around 30 per cent a couple of years ago. Besides, pure onshore model is dead and gone. We are stretching the limits of what can be done from offshore. While we were earlier using offshore for delivering 60 per cent of the projects works, now-a-days 80 per cent is a reasonable standard. And, it’s no more confined to clients in North America. We are doing works for clients from Europe and Asia-Pacific region out of India now.
Bengaluru is your largest delivery location in India and you are expanding it further. What really is driving you to expand more in the city?
While we are expanding in other locations as well, the fact is that you can find a large critical mass only in Bengaluru today. It is an existing base for talents and over the years the city has built a reputation as an attractive destination for talents. There are examples when we hire talents from other cities where we have centres but they still prefer to come to Bengaluru for a variety of reasons. Today, we are in nine locations in India, but Bengaluru is the largest location for us.
With the Indian government seen pushing projects such as ‘digital India’ and ‘smart city’ with increasing use of technology, what kind of opportunities do you see in the local market?
It is a two-way opportunity. First, we can participate directly in various government projects. But indirectly, there is a lot of impact of those projects in terms of opening up of other sectors. So, there will be enough opportunities even in the private sector, and we see it opening up. We already do quite a bit of work in the Indian domestic market though a small part of that is with the government. We also do quite a bit of consulting works for the corporates as more number of Indian companies, especially those in the manufacturing space, are looking at going global.
Recent financial numbers of the Indian IT services players show that most of them use consulting to get downstream works though consulting itself is not growing that much. Is it the same for Capgemini also?
That is true for everybody. You don’t see large deals in the consulting space but having a consulting practice is important to generate that demand. Because, while providing consulting services, you have to deal with the CEOs of the organisations. That gives you an ability to understand the organisation better and gives an entry into downstream business. We set up the consulting practice for India some five years ago which is doing quite fine.
Is your expansion of India operations testimony to the fact that offshoring to the country by your global clients has also increased?
Certainly the pace of rightshoring (offshoring) to India is picking up. India alone handles the bulk of our delivery for Capgemini today. Around 37 per cent of the rightshoring works for Capgemini happens out of India as compared to around 30 per cent a couple of years ago. Besides, pure onshore model is dead and gone. We are stretching the limits of what can be done from offshore. While we were earlier using offshore for delivering 60 per cent of the projects works, now-a-days 80 per cent is a reasonable standard. And, it’s no more confined to clients in North America. We are doing works for clients from Europe and Asia-Pacific region out of India now.
Bengaluru is your largest delivery location in India and you are expanding it further. What really is driving you to expand more in the city?
While we are expanding in other locations as well, the fact is that you can find a large critical mass only in Bengaluru today. It is an existing base for talents and over the years the city has built a reputation as an attractive destination for talents. There are examples when we hire talents from other cities where we have centres but they still prefer to come to Bengaluru for a variety of reasons. Today, we are in nine locations in India, but Bengaluru is the largest location for us.
With the Indian government seen pushing projects such as ‘digital India’ and ‘smart city’ with increasing use of technology, what kind of opportunities do you see in the local market?
It is a two-way opportunity. First, we can participate directly in various government projects. But indirectly, there is a lot of impact of those projects in terms of opening up of other sectors. So, there will be enough opportunities even in the private sector, and we see it opening up. We already do quite a bit of work in the Indian domestic market though a small part of that is with the government. We also do quite a bit of consulting works for the corporates as more number of Indian companies, especially those in the manufacturing space, are looking at going global.
Recent financial numbers of the Indian IT services players show that most of them use consulting to get downstream works though consulting itself is not growing that much. Is it the same for Capgemini also?
That is true for everybody. You don’t see large deals in the consulting space but having a consulting practice is important to generate that demand. Because, while providing consulting services, you have to deal with the CEOs of the organisations. That gives you an ability to understand the organisation better and gives an entry into downstream business. We set up the consulting practice for India some five years ago which is doing quite fine.
What is the kind of employee attrition you see in India?
We don’t give attrition numbers, but it is mid double digit and less than 20 per cent for sure. It has gone up during last eight months and may be around one or two percentage points higher than what we would like it to be. Three years ago, we witnessed a similar situation when the attrition not just for us but for the whole industry spiked as the demand picked up. But now I am not sure if it is because of rise in demand, but it is certainly not at the level where we want it to be. We are trying to address this with a series of measures.
The whole industry is now going through a kind of transformation primarily to keep pace with the evolving nature of technology. Given this has there been a change in the way Capgemini hires people or re-skill the existing ones?
Definitely, the profile of skills is slightly changing but I would not say that it is a fundamental change. There are certain new skills which we need. People are talking about data scientists now and those are different kind of skills because you need people with statistical background who can look at data and analyse it. Can you re-skill a smart person into analytics? Yes, it can certainly be done. So industry goes through a cycle. But my view is that if an individual’s fundamentals are strong, you can shift him/her to anything in just couple of months.
How is the overall environment? Is it safe to say that the IT services industry is completely out of the woods, the turbulent phase?
How is the overall environment? Is it safe to say that the IT services industry is completely out of the woods, the turbulent phase?
I am not sure if we were in the woods in the first place. I think the industry is still in quite a good shape. But you have to keep in mind that the base is becoming larger. One can’t deliver the same per cent of growth what he was delivering in a smaller base as he has grown 10X in size now. That’s the reality of numbers.
