In future, the world of large campuses is dead: Tiger Tyagarajan

Venkatesh Ganesh/Thomas K Thomas Mumbai | Updated on July 02, 2020 Published on July 02, 2020

Tiger Tyagarajan, Genpact’s President and CEO

Real estate should be flexible, not fixed. There are risks with the model of large campuses. You will have 1,000 people instead of 10,000 and people won’t have to travel 90 minutes to work.

The NYSE-listed Genpact, one of the companies instrumental in putting India on the outsourcing map, is seeing a mix of opportunities and headwinds as a result of Covid-19. In a conversation with BusinessLine, Tiger Tyagarajan, Genpact’s President and CEO, spoke about how big campuses are a thing of the past, and how talent need not migrate as WFH becomes the new normal.

Due to Covid-19, how did you transition employees into work from home (WFH)?

We went into lockdown during the last week of January in China, where we have 4,500 employees. We transitioned them to WFH before the China lockdown happened. So, we learnt how to deal with this transition. We learnt along the way and created a playbook. We cut off travel in February itself. In Europe and the US, we moved to WFH from late February to early March.

Then India went into a sudden lockdown along with the Philippines. We had to rely on our playbook. We transitioned a substantial part of the delivery in WFH mode. The remaining are banking customers who haven’t agreed due to regulatory compliances which mandate that work cannot be done from home.

How is the current demand for outsourcing?

In certain sectors such as healthcare, a different kind of demand is coming up. One of our clients had a challenge of finding out from which hospital the demand for respirators and ventilators would come in the next three days? So, it is daily data with which lives can be saved. Demand for wheat flour and yeast went up by 35-50 per cent in three weeks after the lockdown. Demand for non-planned buying like chewing gum went down. All these things were happening in a 24-48 hour time-frame. We had a group that focussed on future demand. We have taken a couple of our solutions to market, based on what we think will be the new world.

Can you share some details on these solutions?

We characterised them by five trends which will have an impact on every industry. The first is movement from offline to online. The obvious one is day-to-day shopping across the world. The percentage of online buying, which was in the 5-15 per cent range, pre-Covid, will go up significantly. The transition that would have taken five years will happen in two months.

The second is movement of computing to the cloud — again a journey of three to five years will happen in a few months. Third is acceleration to analytics done in real time. A business needs to capture trends on a real-time basis and assess the supply chain requirements. As an example, the demand for allergy products have gone down due to lockdown in certain areas and a pharmacy retailer needs to capture that data into its supply chain and act accordingly.

The fourth is the ability to work from any place at any time. There is no debate anymore whether work can be done offshore. Therefore, the conversation is quantum of work — offshore, onshore, nearshore or WFH. Some services will be fully WFH, some services 100 per cent onshore (in office locations), some will be a combination.

The final thing is cloud, virtualisation and analytics in real time and the user experience part. When I am doing online shopping, it is different in comparison to physical shopping. Role of the human centred process around experience has changed dramatically.

Will deal cycles get shorter?

Speed of decision-making. What took three years to decide is being done in 14 days — both inside and outside the company. Clients are deciding at rocket speed. Cycle times will get shorter. Post-Covid, things will change. Big deals are not yet happening but decision-making is much faster.

What are your growth prospects this year with the kind of headwinds?

We run the company with a long-term perspective. I could not be more thrilled about the long-term prospects for Genpact. The world cannot go back to an existing playbook. Which means one has to be curious to learn. We outlined the five trends that we expect to play out and are in a good position to execute them. The short term is important and we have said that Q2 will be a tough one and we will get better visibility moving forward.

Do you see growth coming back next year?

I think so. But will there be a second wave in the US, Europe, China? Does that mean there will be another lockdown? Does it mean unemployment increase? Does it mean customers will go through more pain?

In the phase of uncertainties, if things play out without worsening, we will grow some time next year. It is a long cycle.

In the new world, with employees getting virtual, how much does location matter?

We don’t have headquarters. Our teams should be distributed where clients are and we should function from anywhere. The 21st century companies cannot say we will work from specific locations. If they say that, how can they deliver services? So when Covid-19 happened, we were like ‘okay’, we have been doing this for years. The industry always had the tools (to WFH), we just used it more. The world is learning to use it now.

Delivery models are getting decentralised. Some IT companies have said only about 25 per cent will work from office. How is Genpact looking at this?

I have a slightly different view. When we look at the number of WFH, we look at it from services that we deliver. Clients who have outsourced accounting work had to close their books in March and we did this completely WFH. It was done faster by up to 2 days. Cases where you are not dealing with privacy-related customer info, healthcare or banking records — 80 per cent of that kind of work can be done from home. So, what is the benefit? We can hire some of the best chartered accountants, especially women, who after a few years, opt out as they get married, have kids. Even when they wanted to work, daily commuting of three hours was a drag. It opens up the talent market. So, we look at it from our work view and it can be 0 or 100 per cent, depending on which service. If you ask me 80 per cent of the people (in the age group of 25-30) don’t want to WFH. We did a pulse check. They want the social interaction outside home as the work environment in home is not always conducive. Broadband has to improve. However, in Europe, 75 per cent prefer WFH. It is complicated and there is no straightforward answer.

With the talent pool getting wider, do you see the need for large campuses?

Our perspective has been that real estate should be flexible, not fixed. This view we had 15 years back. We have not built large campuses where we bring 20,000 people. Even in NCR we don't rely on one campus and we don’t own real estate. Our clients expect us to be flexible. In the future, the world of large campuses is dead. You will have 1,000 people instead of 10,000 and people won’t have to travel 90 minutes to work. We see risks with the large campuses model.

Will it also result in a larger push into smaller towns, for hiring?

It depends on the kind of services we offer. We then have to look at the kind of skills. I spoke about the women who want to come back to the workforce. It opens up possibilities for workforces in small towns. A person does not have to migrate from Jodhpur to Bengaluru to work in a multinational company. Nagpur, Trichy, Dehradun, Mysuru are great educational spots. In the old business model, talent had to be relocated from their hometown. In WFH, it is possible. However, it has to be making sense for company, clients’ business and employees. Our industry has the potential to democratise and spread talent. However, the government and telecom sector have to participate in moving into that direction by improving things such as bandwidth.

Also, we don’t hire people for skills. We hire them for learnability, hunger and curiosity to learn, and then give them the tools, environment and platform to learn. Two years back we launched Genome as a part of a reskilling exercise.

With the quickening pace of change, professionals need to constantly improve their skills to distinguish themselves and provide maximum value in a hyper-competitive job market. Skills that were once seen as nice to have are now critical to succeeding as part of the adaptive workforce required in the digital economy. By opening Genome to the public, we are helping to accelerate the professional learning process for everyone.

Does the change in delivery model change the narrative of India as a hub of outsourcing?

India will continue to be our largest operational centre because of the talent pool. However, to call one place as the centre of everything is wrong. Our industry started in India. We started with GE business in India; significant strength and IP has come from India. For us, China was an important ecosystem which we set up 20 years back. Same was the case when we set up our Budapest centre. In Europe, we have 10,000 people. Some of the cutting edge work is done from the Ohio centre. We don't think of India as a centre of gravity. The trick is to make the global ecosystem work. The current world plays to this.

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Published on July 02, 2020
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