NV ?Tiger? Tyagarajan, who takes over as CEO of the country?s largest BPO, Genpact, from manager-founder Pramod Bhasin, has much riding on his shoulders. There is clamour to drive profitable exit for PE shareholders, and add IT services. Tiger, however, defines his challenges more as creating deeper vertical expertise, pushing into new markets like China and Latin America, and garnering more ?onshore? revenues. By Diksha Dutta

Genpact CEO-designate NV Tyagarajan, affectionately called ?Tiger?, is a busy man these days. Though he is occupied with back-to-back client meetings in the US, he is also engaged in the search for new leaders for diversifying the $1.3-billion company, also the country?s largest BPO. His focus and agenda is clear?vertical expertise for the BPO firm, and not the integration of its core business process management (BPM) business with the IT services of its recent $550-million Headstrong Corp acquisition.

Challenges of a year back have now turned into strengths and opportunities for the company. And a combined set of old and new leaders are getting ready to sail the firm?s boat with their new CEO.

As much as 65% of Genpact?s business is driven by core verticals, including banking, financial services and insurance (BFSI), pharmaceuticals, consumer packaged goods (CPG), manufacturing and healthcare.

?The important thing right now is to plan the vertical expertise, which has customer facing teams. We are looking for new leaders to strengthen the areas and will definitely have a couple of changes. They are going to be our big leaders. I am looking for a new leader in the healthcare space and a person to head the manufacturing vertical too,? shares Tiger. Clarifying his future challenges and focus areas, he admits, ?My challenge or focus being on IT-BPO integration is irrelevant. There are only some areas where you need technology support and one of them is capital markets.? The company hadded a new vertical, ?capital markets?, following the acquisition of Headstrong in April 2011, which will be headed by Sandeep Sahai, president and CEO of Headstrong, who will report directly to Tiger.

Amneet Singh, VP-global sourcing at Everest Group, also feels the acquisition has added an extra vertical to the company. ?Genpact is likely to run Headstrong as a separate vertical (capital markets), rather than putting too much efforts in integrating its IT business to other areas,? he notes.

Being a Genpact leader who grew in the client markets and interfaced with clients on a regular basis, Tiger feels the new leaders should preferably be based in the US. ?We will definitely be more aggressive than in the past in looking for US-based leaders. My bias is towards leaders in the US market,? he says, adding, ?As the company is maturing and the verticals are getting bigger, we need leaders who not only have operating expertise, but also have deeper domain knowledge and can spend time marketing.?

Tyagarajan mentions that apart from looking for leaders, the company is also hunting for 20-odd senior people across various spaces who will be customer facing. ?I have been expanding the client facing team for the past 18 months, and need to strengthen the managers who will be present in the client market further,? he says. The company currently has a strategic core leadership team of 10-15 people who take the important decisions along with Tiger.

At present, BFSI and manufacturing both contribute 39% revenues each to Genpact’s business. And Tiger knows exactly which are the areas that need better focus. A recent addition to Genpact’s core leadership team is BK Kalra, who will head retail, pharmaceuticals and CPG spaces.

The smaller verticals, including retail, pharma, healthcare and media services, combined give the company 22% revenues. And that is where the organisation needs to pull up its socks and Tiger realises it. ?I am still open to an acquisition in the analytics space, which can boost the pharmaceutical and insurance verticals of Genpact,? he says, adding that the acquisition size would be similar to that of Symphony Marketing Solutions, which the company acquired in February 2010 to uplift its retail, CPG and pharma verticals. Genpact is currently sitting on $481 million cash.

At present, Genpact faces tough competition from Perot systems in healthcare and from WNS Global Services in retail.

Singh from Everest feels the industry is maturing, with new areas creating new opportunities and thus it is a methodical step for a big company like Genpact to play up its smaller verticals.

Apart from getting new vertical heads, Tyagarajan is very clear about promoting his new leaders. Beside the leadership team that has been there since the inception of the company, he has new plans. ?There are younger people in the organisation and I have been closely mentoring them. They have grown in the company for the last ten years. Some names include Sasha Sanyal, who heads our smart enterprise processes business. Then, we are also looking at getting new leaders from outside and other companies to head different geographies and verticals for us.?

Tiger even counts Shantanu Ghosh, senior vice-president (practices, solutions and transitions), as another core member of Genpact’s leadership team. His role, too, was changed last year when he was asked to be responsible for innovation, horizontal BPM across verticals and the cloud business of Genpact. He joined the company in early 2005 and built its finance and accounting business for global customers. Ghosh shares his vision for the future, ?Tiger was a layer between us and Pramod prior to this. So, much has not changed for us in terms of reporting. My focus for the company is to drive the cloud business further by adding small clients too in the portfolio. Apart from concentrating on the US, which is the largest market for SMBs, we will be focusing on growth markets like India, Brazil and Latin America too.?

Pramod Bhasin also made important leadership changes in the company in the past two years. One amongst them was to focus on the domestic business. Harpreet Duggal, a core member of Genpact’s leadership, was appointed as the India-to-India business (domestic business) head in July 2009.

Duggal started the domestic business for Genpact with nil revenues. Today, the company has 25 clients and 3,500 employees (8% of the company headcount) catering only to the domestic clients. Though as per industry standards, Genpact was a late entrant in the domestic business, Duggal feels, ?I think we were not too late. We just had a different portfolio to offer to our customers which focuses on infrastructure, technology, analytics, procurement supply chain, process re-engineering and re-design as our focus areas, along with customer service and collection. We are also looking at the healthcare vertical in a big way.? The company is not very aggressive on the telecom space, which it feels is too commoditised, though it does have one telecom client. Though Duggal feels it is unfair to compare dollars to rupees, he predicts Genpact’s domestic revenue is expected to reach 3% in the next two years.

Tiger shares his perspective on the picking up domestic and SME customisation business, ?India-to-India business and small clients are my focus areas and challenges, but they are not top on the list as of now.?

In 2010, Genpact grew 12%, slower than the industry average of 14%. In 2011, Nasscom has predicted the BPO industry to grow by 16-18%. But, as Bhasin mentioned during the recent company results, ?With the acquisition of Headstrong, we now expect full-year revenue growth of 23-25% for the year. This reflects Genpact’s full year revenue growth of 10-13%, plus eight months of revenues from Headstrong. We continue to expect our adjusted income from operations margin to be in the range of 16% to 16.5%.?

Bhasin had started GE Capital International Services (GECIS), a captive BPO of GE, in 1997. It sold 60% of stake in GECIS to PE firms Oak Hill Partners and General Atlantic in 2005. The name of GECIS was then changed to Genpact. Today, GE holds approximately 9% stake in it. Though the two PE firms invested in the company seven years back, and typically PE investors look at a five-seven year entry-exit cycle, any news can be on the cards.

But Genpact definitely has other issues on its priority list right now, as exiting an investment is a part of the natural exit cycle for these equity firms and will happen as the company matures. At present, GE still accounts for approximately 38% of Genpact?s revenues, which has significantly declined from 91% in 2005.

Coming back to Tiger, he answers the obvious question about who will be the next COO for the company, laughing, ?I am going to be here for quite some time. We do not need another succession plan so soon and neither do we need a new COO to fill my position.?

Pramod Bhasin?s planned exit

It seems Pramod Bhasin, former CEO and president of Genpact, sorted out quite a bit for Tiger before handing over the reins to him. Admits Tiger, ?My being the COO was a part of our succession plan. I was working very closely with the clients in the US to understand the business in the client markets. And this is what the new leaders will also do.?

Having started Genpact in 1997, when it was known as GECIS, with an idea to leverage India’s enormous domestic talent pool, he plans to carry on with the idea after retirement at 59 years as well. As non-executive vice-chairman at Genpact, he will help out with strategic decisions. But what he actively plans to do is play a role in skill development and the education sector, besides working with the government. This is what he says ?going in good time?.