Competency to help new entity grow

Written by BV Mahalakshmi | Updated: Oct 31 2012, 07:30am hrs
CP Gurnani, CEO of Mahindra Satyam and MD of Tech Mahindra, has played a pivotal role in the transformational journey of Mahindra Satyam and is now spearheading the merger with Tech Mahindra, which is aimed at achieving a revenue of $5 billion in the next three years. Gurnani tells BV Mahalakshmi that flexibility and strong competencies across verticals will give the new entity the necessary edge to sustain growth. Edited excerpts:

Is the ambitious target of $5 billion by 2015 achievable given the global headwinds

As we enter the final stage of the merger, which is expected to result in the creation of the new entity as a new offshore services leader, we are more confident and optimistic than ever before. When talking about global headwinds, I stand strong on my companys core strengths and differentiated offerings. We are different due to our network and communications and enterprise business solutions focus. Our network, mobility, analytics, cloud and security (NMACS) framework is an example of this difference.

Planning for the unpredictable in these times may seem an impossible irony, but an organisations ability to flex and respond is critical for sustaining growth. We have strong competencies in all our verticals, domain and process knowledge. This will give us the necessary edge.

What strategies will be adopted to achieve this target

The joint entity will have a unified go-to-market strategy with deep competencies and a balanced mix of revenues from telecom, manufacturing, technology, media and entertainment, banking, financial services and insurance, retail and healthcare. We expect contribution from Americas at 42%, Europe at 35% and Emerging Markets at 23%. The combined entity will leverage Tech Mahindras expertise in mobility, system integration and delivery of large transformations to optimally penetrate the opportunity presented by Mahindra Satyams diverse set of clients across multiple verticals.

Are acquisitions also included in the plan How much capex has been allocated for proposed buyouts

To achieve the mission we have set for 2015, we have divided our operations into four segments. While two segments focus on customer retention and extension of business with them, there is a segment that will specially focus on mergers and acquisitions. I believe 10% of the target of $5 billion will come from inorganic growth.

For this, the company will appoint two senior executives one will be involved at the corporate level to look at M&A opportunities while the other will drive the portfolio. We are also looking at start-ups. We have already announced a fund of $50 million that will facilitate new technology firms. The start-up segment will be headed by a chief innovation officer.

Which verticals would drive the growth How many more centres and new geographies would the company add by 2015

Currently, a major share of our revenue comes from application development and management services, almost 30% from engineering and manufacturing services and the rest from NMACS. The combined entity is focused on our two major domains cloud computing and enterprise mobility.

We recently announced a centre in Fargo, North Dakota, US. We will soon announce another in Netherlands and we recently set up a centre in Belgium. We already have a centre in Brazil, which is being enhanced, and we will be setting up a centre at Peru. Growth is expected from Saudi Arabia and Eastern Europe also.

What would be the total headcount and how will you maintain employee retention

About 80,000-odd associates is the expected headcount in this new entity. I spend a lot of time mentoring the future leaders of this entity.