Companies

AI should be about augmented intelligence with the human in loop: Tiger Tyagarajan

Debangana Ghosh Mumbai | Updated on October 01, 2021

Tiger Tyagarajan, CEO, Genpact

CEO of Genpact speaks on the company’s performance, deploying modern technologies, focusing on the right client industries, among others

US-based professional services firm, Genpact delivered quite a stellar performance in the quarter ended June 2021. Gross profit for the quarter had gone up by over 15 per cent YoY and net income grew 65 per cent YoY.

In a conversation with BusinessLine, NV ‘Tiger’ Tyagarajan, CEO, Genpact said that a lot of this growth reflecting now is the impact of picking and focusing on the right client industries and sectors before the pandemic hit.

He shared his views on how companies, not knowing exactly how to deploy modern technologies like artificial intelligence (AI) and machine learning (ML), end up making them redundant.

Gross profits for June quarter and net income has increased. What factors drove this growth?

All industries participated in that growth. The choice of our focus on particular services, which we picked pre-pandemic, was that we would invest in both organic and as well as through acquisitions including supply chain services, financial crimes & risks in banking, sales & commercial operations, financial planning & analysis. These are the four big categories which doubled the growth rate for the company.

All of these services have a big component of transformation services because everyone wanted ways to orchestrate and collect data, then leverage that to build insights for real-time predictions and decision making.

We also saw many new clients who were accelerating digital transformation. I believe these segments will continue to sustain the business over the next two years.

Which are the key sectors and geographies the company is operating in?

Some of our key sectors include banking, insurance, large manufacturing companies, high-tech companies, consumer goods retail, life sciences and healthcare. These have been our focus pre-pandemic and will continue to be moving forward as well.

Our top geographic markets are developed economies of the world. We saw great traction over the last twenty years in the US, Canada, and Western Europe.

Also read: ‘Acceleration of digital transformation is providing many more opportunities’

We always had a big focus in Japan and Australia. We have a very strong presence and local leadership team in Japan which is deeply interconnected with our China operations where we have close to 4,000 people.

That has been a long-term sustainable ecosystem where we have built a strong reputation. We have seen significant growth pick up over the last few years. We recently doubled our focus on Germany. With our supply chain, sales and commercial and digital transformation, we have great opportunity in that country.

Any new innovations in the pipeline?

A lot of them. We have innovations going on in how to onboard customers in the banking space in hours instead of weeks, how do you fulfil orders from retailers that go to consumer goods companies with 100 per cent completion rates, how to track when the supply chain and demand is volatile and freight rates are going up.

We are trying to use AI and machine learning to do all of these with much more intelligence to drive better outcomes. A big differentiation for us is the fact that we bring together a deep understanding of domain, process and the underlying technologies needed to build those solutions.

We think combinations build solutions and individual competencies don’t create solutions. We are good at bring combinatory teams together.

We drive a lot of outcomes like sales growth, pricing, loss and fraud reduction, working capital improvement for our clients. Our commercial models are pivoted on finding ways to get paid for driving those improvements.

What are your views on modern technologies like AI and ML being adopted by companies?

Trying to drive adoption of AI in order to save labour cost is an exercise in wasted resources and time. Our believe is AI should be about augmented intelligence with the human in loop, so it’s not about replacing them but augmenting the efforts.

For instance, when a customer applies for loan to buy equipment for their factory, sometimes it takes 20 days for a bank or financial institution to just approve the application. If you can find a technology to do that in one day, then that improvement will also benefit our customer’s customer.

Also read: Genpact acquires Enquero for undisclosed sum

They can get into production three weeks early, reduce working capital and cash flow by three weeks and finally sell more for three weeks. People underestimate the importance of cycle time and driving growth, the impact it has on margins, profit & loss and delinquencies. I just think there is too much focus on cost and efficiency when people talk about these technologies.

During the earnings call, you had said that the company has enough liquidity and will be looking at M&A opportunities. What type of capabilities will you be looking at?

We have an M&A team. They search for targets, evaluate, select capabilities and are always on a look out as a part of their job. The pipeline at any given point has lot of opportunities sitting there. We start with what is our business strategy.

Once we decide on the capabilities we want, the M&A team goes looking for the same, then decide which ones are the kind of capabilities that we can build, scale further and check cultural fit and financial position.

Some of the capabilities I am looking for are data analytics, digital engineering, and data engineering. We have added capabilities in that area in December 2020.

Published on October 01, 2021

Follow us on Telegram, Facebook, Twitter, Instagram, YouTube and Linkedin. You can also download our Android App or IOS App.

This article is closed for comments.
Please Email the Editor

You May Also Like