Digital is a fancy word, but IT business will remain strong: Capgemini India CEO Kandula
Ten months after French IT giant Capgemini acquired Igate for $4.04 billion, the company has appointed former Igate HR head Srinivas Kandula as its India CEO. Kandula, who is part of Capgemini’s group executive committee, replaces Aruna Jayanti, who moves on as global BPO head. In a candid conversation with TOI, Kandula talks about how he is obsessed with execution and believes there is plenty of steam left in the legacy IT business. Excerpts:
How is the integration going?
Igate will be merged with Capgemini. The Igate brand name will go. The first phase of integration — consolidation and stabilization — is over. All Igate employees have been mapped to Capgemini. In Igate, banking and financial services is a vertical, insurance is a separate vertical. In Capgemini, they combine the two and call it financial services. So Igate employees had to be aligned to the Capgemini structure.
In IT services, everybody works for a client and they need to be moved as it is.There were only three clients that Capgemini and gate had some overlaps with. So that part of the integration wasn’t difficult. And he redundancies were very imited, mostly in functions ike HR, finance — where you can’t have two heads.
You hired Boston Consulting Group to oversee the integration process. How did it help you with integration?
Capgemini has done 42 acquisitions before Igate. It has a strong consulting wing. So they are used to this. They have tolerance and appreciation for different cultures. Despite that, we took external help to drive the message to Igate employees. We brought in Boston Consulting Group to help with the integration as they have process knowledge. And it has clearly worked. From August to December, the attrition of our key talent (VP level and higher, and outstanding talent) was 16% compared to 19% in 2014. And not a single client has left us.
Do you think Capgemini’s heavy-dependency on India is a risk in some way?
It’s Capgemini’s overall strategy to strengthen India. We have 90,000 employees in India out of 1.80 lakh globally, that’s 50%. We will go to 1 lakh people by the end of the year. Capgemini is ahead in this game compared to other European players. When you want to hire at scale, no other country can give you so many engineers. We are going to strengthen execution.We will do greater industrialization and automation in the traditional business.
While it may be fancy to talk about digital and cloud, all those components are related to the traditional business. I’m not visionary enough to say that there is something really different out there. In the business-to-business segment, things don’t change quickly. The legacy business is still 80% of the business and that’s not going to change quickly.
You’ve transitioned from an HR role to a CEO role, which has P&L (profit & loss) responsibilities. That’s not something you see often. Do you see that as a challenge?
For some reason, a lot of people are suspicious about an HR leader holding forte. But in IT services, people are key , so I don’t see that as a big deal. If you ask me, the important thing is are you ready to learn and respect people. Do you have the curiosity to learn. That holds the key. And I believe I have that desire to learn.
Over a period of time, regardless of what role you play , what is important is whether you have this kind of an attitude, not so much whether you have an understanding of the mechanics of technology . It’s better to have a CEO who thinks he has a long way to go than have one who lives with the assumption that he knows it all.
Igate’s key client Royal Bank of Canada (RBC) had raised concerns to its board about the previous dispensation and other delivery-related challenges. Has the dust settled on it?
We believe so. They have given us a sizable new contract. It’s gone up by 23% from 12% in the last 18 months We have won a multi-million dollar insurance contract using iTops solutions. That time, Canadian media carried news reports that RBC will replace Canadian workers with Indian workers. There were delivery challenges on certain projects. But it’s behind us.
Former Deloitte deputy CEO Brian Derksen was brought in by Igate promoters to assist Ashok Vemuri. Has his assignment ended?
He was on an assignment and it ended before the deal was closed. The board felt that Ashok was a new CEO and he would require a mentor and they felt it was good to have someone from outside. Derksen worked as assessor and mentor for rest of the leadership. When we lost Phaneesh Murthy (former Igate CEO), there was vacuum and the immediate gap created a challenge.