Genpact, a global professional services firm, has managed to perform well in the year of the pandemic. In an interview with BusinessLine , Tiger Tyagarajan, CEO of Genpact, shares his insights into how the post-lockdown scenario will pan out for the company. Excerpts:
What were the key drivers for Genpact’s revenue growth last year?
For the full year 2020, we delivered total revenue of $3.7 billion, up 6 per cent on a constant currency basis. Income from operations was $439 million, up 2 per cent year-over-year, with a corresponding margin of 11.8 per cent. Our performance in 2020 reflects our agility and culture of embracing change that allowed us to rapidly meet client’s needs and successfully pivot to new ways of working. The acceleration of digital transformation into new buying centres across all industries has expanded our total addressable market, providing us with many more opportunities to drive sustainable and profitable long-term growth. During 2020, we significantly expanded our transformation services offerings to meet the accelerated demand for digital solutions that we have seen across all industry verticals, coupled with our broader end-to-end intelligent operation services, our large transformation services engagements have expanded our relationships with many of our strategic clients. More than 50 per cent of our bookings were from sole-source deals in 2020.
How have conversations with clients and their priorities changed now?
We are in a growth market that is highly under-penetrated and that has further expanded in response to the challenges presented by the pandemic. This market expansion is primarily driven by the changing needs of two different sets of clients. First, existing clients who want to accelerate their transformation journey leading to increased engagement with us on more services, and in more buying centres than before. And second, new clients, who are now much more open to partnerships, in order to change, transform and respond to the evolving trends in 2021. Our portfolio of clients is diversified across industries, so we are able to shift resources from clients in one industry to another as needed to respond with agility to shifts in demand. These are times when it is important to keep the total value that you’re creating for clients in mind and make sure that you are focused on solving their challenges and opportunities. We’re seeing traction in value-creation deals. So, it’s not necessarily just about costs and productivity, it’s actually about creating value beyond that: growth, pricing, risk, working capital etc.
What are the areas Genpact is focusing on in 2021 in terms of business impact?
Many of our vertical services, including underwriting or claims services in insurance, or financial crimes and risk services in banking or trust and safety services in hi-tech or supply chain services in manufacturing and FMCG industries or sales and commercial services are non-discretionary in nature. We have been investing in these services both organically, as well as inorganically. For example, our Barkawi acquisition in the supply chain. These services have been deliberately chosen as a follow on from our scale and strength in finance and accounting and procurement.
With the hybrid delivery model being adopted, what is the company’s strategy in terms of RTO (return to office)?
In the long term, we see a clear mix of on-shore, off-shore, near-shore and work from home. We will reopen our workplaces in a very strategic and deliberate manner and have been prioritising work that we are unable to do in a work-from-home environment in order to bring that back to the office first. Currently, we have 10 per cent of our global workforce back in the office, and we are planning a phased approach that will find the optimal balance between providing the high-level service our clients expect while maintaining the health and safety of our employees. Though there are benefits to work-from-home, being social is a fundamental human need. Teams need to get together, to build new solutions and innovate and all of this needs to be taken into account.
How is the talent landscape changing, and how is Genpact preparing its employees in the new normal?
In early 2019, we launched Genome, our learning framework. Inspired by the work done at MIT’s Center for Collective Intelligence, we designed a scalable infrastructure and a new muscle that continuously curates, crystallises, disseminates, and enhances knowledge. Genome enables our employees to continuously learn skills that are highly relevant to their current roles and future aspirations. So far we’ve had over an amazing 10 million learning hours on Genome. During the pandemic, we made major parts of the Genome platform available to professionals around the world, at no cost. We believe it is important to share the insights honed from our business and technology expertise to help people reach their professional potential and maximise their ability to drive meaningful impact in the world.
Genpact has been making a few acquisitions lately. Will that trend continue? What kind of companies will be the acquisition targets. How much investment has been earmarked for such acquisitions?
We continue to identify new opportunities as well as build differentiation in existing offerings. Our recent acquisitions demonstrate our continued commitment to building our capabilities in the cloud. This past fall, Genpact acquired Something Digital, an interactive agency specialising in e-commerce website design, digital strategy, and user experience to further enable us to drive experience-led transformation.
What are the new trends emerging in the areas of Genpact services? Do you foresee any disruptions going ahead?
Amid all the uncertainty and disruption, one thing is certain: there is a new normal that nobody could have foreseen at the start of 2020. We have seen an exponential adoption of digital and data analytics and this is all fundamentally changing the way the world works, in business and beyond. We see five clear trends that are here to stay for our clients across industries: dramatic shift from offline to online. b) The virtualisation of everything, accessing data, transactions, and analytics from any device, from anywhere, and at any time. c) A dramatic migration of solutions and services to the cloud. d) An increase in the demand for real-time predictive insights to drive decision making.