C P Gurnani

MD and CEO, Tech Mahindra

Interview

April 16, 2014

/ By

Biz@India

March-April 2014



Need for the global talent

C P Gurnani, MD and CEO, Tech Mahindra

C P Gurnani,MD and CEO, Tech Mahindra

To sustain the growth, Indian IT industry needs to retain the talent and to work upon the skill development. Considering this, Tech Mahindra stepped into the higher education sector by collaborating with École Centrale Paris. Armed with better talent and a war chest for acquisitions overseas, Gurnani is gung ho about the future.

• Let’s begin by looking at the year 2014. How do you see the year as far as Indian IT industry is concerned?

I think it is a year of opportunity for the Indian IT industry. Number one is that the trajectory, which is around 13 to 15 per cent, is quite healthy. Number two, I think it is a time for Indian IT industry to take a little bit of pause and look at what they would like to prioritise for the next one or two decades. And in my opinion, the business models will change. Digitalisation will influence many players in the industry. If India incorporates prepare them to look at talents, skill development, alternate business models, business markets and service offerings, then Indian IT industry will be in a much better shape.

• You raised a number of issues in your answer. So, let’s talk about them one by one. Let’s start with talent and skills. Do you think it is a challenge in India?

It is not a challenge for India but if India wants to go to the additional markets, it needs to make the faces much more global. Let’s take an example of France. The number of French- speaking software engineers, India has, are very limited. The second challenge is the French people in the global arena. This means the relationship between India incorporates in France and global companies. I am not saying that relationship is not there; I want to say that it could be a lot better. The third point is the requirement of the talent which should be global. As we will globalise, we will require the global talent. So, this is the area where Indian corporates need to prepare themselves. Like in every situation, there is half glass empty and half glass full. I want to say, when your half glass is full, you should be worried about the half glass empty.

• But going more deep into the talent and skills issue, is the current output from the universities, except few exceptions, satisfactory up to your requirements?

See, I am probably one of the biggest admirers of the talent we are getting today. The reality is that there is nothing wrong with the talent. Today’s youth is a lot more aware, a lot more multi-faceted and a lot more ambidextrous that many of us were not that much when we were in their age. So, in my opinion, the youth needs direction, further augmentation of skills. But in any case, if you want them to become available or productive for you, you need to challenge them in the right direction. So, I don’t think that the challenge is the youth anywhere in the world; the challenge is the captainship, the challenge is being demanding; the challenge is what you want to communicate. I mean, just assuming that the person is of Facebook generation or internet generation or he is ready for everything; I think it is not fair.

• Is leadership present in our companies or we need to large ourselves a bit?

If we were not good, we would not have been growing at 13 per cent. We want to be great and for that, we need to investment a lot in inventory and skill development. And as I said, we need to make our mind-sets global. For example, TCS had acquired French company Alti SA which has small centres in Noida and Chennai. However, these kinds of acquisitions are not the representative of the relationship which exists between large economies – France and India – in one of the most vibrant sectors – information technology. Now this is a gap to me. And that’s why, we set up a university with École Centrale because I strongly believe that French education system has lot of merit that they make not only engineers but foster the relationship between the two countries in the IT sphere. They are able to give you industry academic interaction. And that is why Tech Mahindra collaborated with École Centrale.

• Let’s have a bit more about that initiative. Where do you expect it to take the Tech Mahindra business?

I don’t think that I did it for Tech Mahindra business. As I said, I am serving the needs of Indian corporates to be globalised. I am looking at India to explore opportunities in developing French Indian business or Indo-French business, whatever you really want to call it. France is a great trading partner and I think, we can do a lot more in the area of IT also.

• Besides the language gap, what else need to be prevented from the IT market so that it should be considered as truly representative in the French market?

I think, there are lot of things to be considered. Like in every part of the world, we talk about free trade. I don’t think that France is exactly the example of intellectual trade. The fact is that some of our socialistic governance has tended to be more protective; instead of trying to encourage bilateral exchange of people and information. We can go into the details but the reality is that at this stage, France is seen as a difficult place to do business by the Indian IT industry. And I personally believe that it is unfair to do business that way because France is very open particularly French corporate is very open in doing business. We have engineering development centre in Toulouse and we have phenomenal experience in Toulouse. We are very happy with our presence in France.

• Is it because that IT companies are focussed on easier markets in terms of business?

I won’t call them easy market but economically, I can call them good trading partners.

• What are Tech Mahindra’s plans for the French market?

We are looking at partnerships, better alliances or mergers, better market. We are talking to the French business. Nothing has firmed up or crystallised. We have had meetings with the French bankers in the recent past. Let’s see if something will develop, we will keep you updated.

• What is the ticket size for the acquisition?

It is about $200 million.

• That is very large?

There is a large economy in France. I am saying again that I am willing to look at it whether it will fructify or not; whether it will close or not; that’s a complete different story all together.

• Are you expecting to close it this year?

We have just started talking. It is at pre-mature stage to comment on it anything right now.

• Are you spreading your presence by hiring on-site or sending more from India?

We have a decent presence in France. As I said, we have a development centre in France. My country manager in France is a French man. It is not about me sending people from here (India). We are a global company with global centres. I strongly believe that our services and offerings add value to the French businesses and global businesses.

 

Campus of École Centrale, Paris

Campus of École Centrale, Paris

• At what percentage of market penetration where you want to reach?

It would be more than double digit growth, may be 20 per cent. We were very small. We were not even there. We had just started. So, let’s give us some time.

• In terms of other players in India, who do you think is the closest in terms of same product or competition?

Different people have different market sizes. I consider Capgemini as an Indian company not Parisian company. I can compete with Capgemini, Steria, as same as I compete with Accenture, IBM or TCS.

 

Tech Mahindra’s campus in Pune

Tech Mahindra’s campus in Pune

• Looking a bit more at the domestic situation, do you think domestic IT industry has kept pace with the global market?

It slowed down last year. It was 9-10 per cent as against international business growing at 13 per cent. It is a pre-election year. Now elections are here. I expect things to be slow in 2014 for India. It is a large economy and it has its own demand.

• What are your expectations from this current scenario?

Governance, leadership and if possible, no interference in whatever is going well.

• Any requirements from the IT perspective?

I don’t think so. There are always few challenges but I would say that successive governments helped the industry to solve some of the issues.

• My two questions – one is EUIndia FTA that is going nowhere. I think, the main issue is the mobility of manpower which concerns the entire industry. Do you see solution there?

Ultimately, it is about the two governments. The EU is not the easiest government to deal with and Indian government also made its point very clear. The FTA is a bilateral discussion and there has to be a little give and take from both the sides. I am sure that India and EU will find the way out.

• Finally, how do you see immigration bill in US – whether as an opportunity or a challenge?

I see it as both opportunity and challenge. I personally believe that cross border trade with America will continue to flourish particularly in the IT sector because the US needs to continue to remain technologically competitive and Indian corporates are very deeply entrenched in what they are doing. So, immigration bill may increase the cost and the need for compliance but eventually, the business and trade have to flourish. And, I believe that US immigration bill will be an opportunity for further skill development and for Indian corporates to learn to become a global company.

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