Known as ‘Tiger’ (a nickname he got in 2nd standard since his mates couldn’t pronounce his name correctly), VN Tyagarajan was appointed chief operating officer (COO) of Genpact in February. He reports to President & CEO Pramod Bhasin. Before that, he was executive vice-president, Business Development and the Americas, a post he took up in February 2005. He explains the company’s strategy in a chat with Leslie D’Monte. Excerpts:
How tough is doing business now?
The going is indeed tough for IT firms, with pressure on pricing and less work coming in. Much depends on the company one deals with, as leaders could have changed and one would have to start the dialogue all over again. However, the number of companies wanting to outsource is rising. Genpact’s IT services business is only around 20 per cent. This part will surely feel the impact. However, around 85 per cent of our BPO work (accounting for 80 per cent of Genpact’s revenue) is non-discretionary. Hence, the impact can be contained.
But what are your clients telling you?
They want us to help them streamline processes, make these more efficient, which in turn will help them cut costs and do decent business in a slowing economy. All our services come under the broad umbrella of business process management. While this may sound another buzzword, we are unique in the sense that we have developed detailed benchmarks for each process and business insight. This helps us provide better end-to-end solutions and satisfy clients.
So, is there any change in your strategy?
We are accelerating work with existing customers to increase mindshare. Then, we are helping clients manage their inventory and receivables better, while reducing delinquencies. This helps them conserve more cash. We are also looking at domestic business, now a separate business division. On this front, we are discovering that many banks and institutions want to outsources services like finance and accounting (F&A), insurance, collections, customer service and procurement. We also plan to expand our business in China. We have around 3,500 employees there. The Philippines (unit) has around 700 employees.
Are you hiring more?
We have never done much lateral hiring since we promote (almost 85 per cent) from within the company. Most of our hiring is just-in-time, so we do not have a “bench”. Besides, employee referrals have worked for us. It’s also a channel that sees the least attrition.
For the past five years, Genpact has had 16 storefronts in cities like Vizag, Lucknow, Bhubaneshwar, Jamshedpur and Chandigarh. Though, currently, with reduced focus on hiring, and our tie-up with NIIT, we don’t require a separate storefront for hiring anymore. Around 15-20 people enter our storefront daily. We interview them and the hiring is done on the spot if the candidate is found fit. For 2008, storefronts contributed 17 per cent of the total associate (employee) level hires.
The approximate initial investment for each storefront varies from Rs 10 lakh to Rs 30 lakh, subject to multiple factors such as the city, location and the nature of the work managed such as hiring, training, vendor sourcing, campus drives, etc.
The set-up is also dependent on employability options in the region. Most centres are on a lease model, with Genpact bearing the infrastructure cost.
Are you asking people to leave, given the tough environment?
Given the GE legacy, Genpact has always believed in performance appraisals. The poor performers have always been asked to go. This period is no different.
What’s your inorganic growth strategy?
Forecasting is tough in this environment. How do we value a company today? We would rather be happy with cash in safe havens. Having said that, our acquisitions (four till date) have always been to fulfil a gap which our clients want.
