Industry watchers say that for Tyagarajan, popularly called Tiger, managing the transition smoothly would be no mean achievement. His predecessor Pramod Bhasin was not only the companys founder but is also known as the father of the countrys back office industry.
Three quarters after Tyagarajan took charge from Bhasin, the companys report card is impressive. Revenues from the banking and financial services (BFSI) vertical have crossed 50%. Half of the leadership team, including the CEO, now operates from onshore locations, different businesses have been re-organised into industry verticals, and revenue per employee has increased to $34,100 from $31,100 earlier.
In an exclusive interview with FE, Tyagarajan outlined his agenda for the future. I wish to shift 50% of our 53,000 employees to onshore locations in the next five years. Acquisitions will always be on agenda if they build capabilities. I want that Genpact be known largely as a company that makes enterprises intelligent rather than a mere BPO. Last but not the least, I want the company to emerge as a strong player in emerging locations like India and China and not just remain confined to Europe and the US.
Analysts term the agenda as challenging for three reasons: Diversification into different verticals is easier said than done as BFSI still contributes more than 50% of the company's revenue and continues to grow at a faster rate. Strong competition is emerging from rivals like Accenture, IBM and Capgemini.
With domestic IT players like Tata Consultancy Services (TCS) emerging as a strong player in the BPO segment as well and effectively combining IT and BPO, Genpact would have to work hard to protect its turf. TCS BPO has already crossed $1 billion in revenues and is not far behind Genpact's $1.6 billion revenue mark.
Says Tyagarajan: When I took over, the whole mood in the company was very positive because it was around then that the acquisition of Headstrong had happened and we had put a difficult year 2010 behind us and 2011 was looking good. The first six months after taking charge from June to early December I literally spent 80% of the time on the road meeting customers and employees. Through those six months, I drove a whole set of changes that are pretty much complete now.
He admitted that the growth rate of the India delivery centres for Genpact is slower than other geographies. This is one of the reasons to slowly shift the onshore-offshore employee ratio. Our overall growth rate was 27% last year but the India delivery centres grew 3-4% lower than that. However, all other delivery centres put together grew by 10%. If this trend continues in the next five years, our employees would be split 50% in India and the rest at onshore locations like US and Europe. Today, our distribution of workforce is 63-65% in India with the balance 35-36% in global markets.
Sid Pai, partner and managing director, TPI Advisory explains: There is a need for large IT and BPO firms to have their core management team and delivery capabilities outside India. Firms like Genpact have now become full service providers and can't afford to be just niche players.
Agrees Salil Dani, research director at Everest Consulting Group: There are a few top players that have concentrated a lot on BFSI vertical and are getting good businesses because of strategic acquisitions and adding analytics to the vertical. Among Indian players, Genpact, TCS BPO and EXL Service compete neck-and-neck for BFSI deals. It has become a specialised space with well defined strategies.
Genpact currently operates in five defined industry verticals: BFSI and capital markets, consumer packaged goods, retail and pharmaceuticals, manufacturing and healthcare.