Monday, May 16, 2011

COO Genpact: Q&A: N V Tyagarajan

Operations Director Genpact NV Tyagaraja is ready for another season as the executive director of the company. From June 17 will be at the helm of affairs in the company. He had previously served as CEO from 1999 until 2002, when Genpact was a subsidiary of General Electric Co. He says Piyali Mandal of their plans. Edited excerpts:

What will be your immediate priority?
I can assure you all tomorrow morning is going to change (laughs). We just finished a good quarter and completed the acquisition of Headstrong. These two events are very important.

We have grown well in the last quarter. Continuing the growth momentum will be the biggest focus. There are a lot of opportunities globally. We will continue to explore these in Europe, Latin America and Asia. Moreover, integration of Headstrong, driving cross sale and driving growth in new geographies will be a focus area. We have also revised our guidance upwards to 23-25 per cent. Achieving that will be a big focus of the leadership team.

Pramod Bhasin will remain as the non-executive chairman . How do you plan to leverage his expertise?
Genpact will continue to take 20-30 per cent of his time. He will help the company in integrating Headstrong and expand the company globally.

Who is going to fill your position as the chief operating officer?
As of now, we are not going to fill up the post. We don’t need it. The COO was part of our succession plans. We created the position for a smooth transition.

You talked about guidance. Do you think there is room for further revision, on the back of the positive indications you are getting from Headstrong?
No. We just closed the deal on May 3. It is still very early in the year. As we go through June-July-August, we will see how the rest of the year goes. We want to wait and see how the cross selling happens. It is better to be realistic than bullish.

While you have given a strong guidance, the business from one of your largest clients, GE, has grown just about one per cent year-on-year. Is this not a cause of concern?
I don’t think so. There is nothing to worry about on that front. Our revenues from GE are on the expected line. We expected (revenue contribution from) GE to be in lower single digit, and that’s where it is.

Going forward, do you expect GE to be a major revenue contributor?
Yes, it will be. It accounts for about 36-38 per cent of our total business. However, with the Headstrong acquisition, we expect it to give 28 per cent.

Analysts have expressed concern over the IT section. How is that shaping up?
Our overall IT business is up, but not as much as we would have liked. We are trying to fix it, and have hired new leaders including Dan Smith. We have changed the business model and are adopting a new strategy. We expect these initiatives to pay off.

Overall, do you think growth in IT will be faster than BPO sector?
No. I think BPO will grow faster than IT. It would be stronger and bigger. IT continues to grow fast, but the penetration of BPO is quite low. So, there is a larger growth opportunity in the BPO sector.

For long, industry experts have touted you as an acquisition target. Do you think your acquisition of Headstrong will put to rest such speculations?
Such rumours (about acquisition) are baseless. People who claim that we are an acquisition target don’t have any data to back it. Rather, we are always on the lookout for acquiring firms to get domain capabilities.

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