‘India still retains its edge in outsourcing’

Rajesh Kurup | Updated on May 04, 2014

Salil Parekh

Capgemini’s Salil Parekh talks about India, innovation and new technologies

India is the hub of innovation and delivery for Capgemini, a French IT consulting firm that is expecting the market to grow rapidly over the next couple of years. Its headcount in India crossed 50,000 in April, making it the largest employee base in the world. The company employs a total of 1.34 lakh personnel across 44 countries.

According to Salil Parekh, member of Group Management Board at Capgemini, India still retains its competitive edge in the outsourcing sector, despite the emergence of other destinations. In an interview with Business Line, Parekh, whose portfolio covers nearly half of Capgemini’s business, talks about India, innovation and other areas of interest. Edited excerpts:

Is India still the outsourcing destination for the world or is it losing that edge to upcoming geographies such as the Philippines?

Today, about 70 per cent of the global offshoring capability is centred around India. Probable names of other countries are Poland, the Philippines, Latin American nations, some parts of China and Vietnam. Our view is that India’s competitive advantage is still very much there and for the foreseeable future, remains quite critical. However, innovations are also important. The more we invest in innovation, the more traction we will see.

Companies need to demonstrate that they leverage innovation. India still retains all of the advantages that were evident in the last five years.

Which technology trends are gaining ground and how is India positioned to tap these emerging technologies?

Cloud is the big change. We are seeing a lot of discussions among clients on whether they should look at private, public or hybrid cloud.

Analytics, digital and mobility are others. Another area we see more demand is security, as people are keen that all of this is done through a secure environment. The second question is whether Indian companies are ready to serve the global market. There, again, we find most of our competitors are focused on the cost element and not on the innovation element.

Capgemini has a massive presence in China, a geography where Indian companies are finding it difficult to get a foothold. What makes you succeed?

What the Chinese market wants is the difference that you bring to their company. We bring our innovation from the Netherlands, France, the US and Europe into the Chinese market.

We have worked with sectors such as manufacturing, energy and utility in that market and we bring our global expertise to this market.

On Capgemini’s operations in India - how is it faring?

We have a profitable business in India and our market here is growing very fast. It’s a combination of consulting and technology.

We see continued growth for our delivery centres in India. We have a dedicated team focusing on the Indian market, and the public sector – State and Central Governments’ – is in good shape.

This is in contrast with the other places such as Europe where the public sector is not doing well?

Europe has been a difficult market and its public sector has gone through a lot of change. But it is coming up, we see that. The US (public sector) is not so bad for us.

Which is the one trend that Capgemini would bank on?

For us, it’s definitely analytics and big data.

Big data is a fundamental change, so is cloud, and they are quite interconnected and that’s what is going to change the market.

Will you continue to be a dominant player in Europe?

We have a very strong presence in Europe, and in many countries, we are the number one player.

So that will continue, in the sense, we will remain a dominant player in Europe as a percentage of our business. We think the US, Latin America and Asia should increase also.

One of the biggest complaints about India is that the country lacks policy stability, in turn, impacting investment decisions. Your comments…

From our perspective, we never had that issue of different policies stopping us from making investments.

Today, we have offices in nine cities in India, a massive number of staff, the largest single staff percentage in the world. We have more than 12 or 13 laboratories in India where we make investments in mobility, analytics.

We also have a lab on SAP retail. We have never had those constraints of where policies have stopped us from investing.

I think, in the IT sector, there have been a lot of investments in India.

Published on May 02, 2014

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