Capgemini banks on offshore model

Capgemini is among the top IT outsourcing and consulting companies which has large presence in India and has been very successful in developing offshore delivery model to serve its customers across the verticals located in different geographies. The company has been strategically investing and utilizing the available large pool of talents and professionals for offering outsourcing services and solutions.

Aruna Jayanthi, Global Delivery Officer (GDO) for Capgemini Outsourcing, talks to Pankaj Maru of CyberMedia News about the trends in delivery model, the company's alignment towards new technologies and customers demands, pricing pressures during slowdown and role of India in Capgemini's business etc. Excerpts:

You have been with Capgemini for over a decade now. During these ten years, according to you, what kind of changes have evolved in the delivery model?

On the delivery model I would like to share two points here. First, there's much more acceptance for an offshore model today compared to ten years ago. These days, practically it is normal on every bit to position offshore very strongly, except, of course, if it is the public sector, where there are some restrictions which don't allow offshoring at all.

Secondly, outsourcing typically revolves around the value proposition of cost reduction, where the customers have multi-year deals like 3, 5 or 7 years. And these customers clearly have more expectation on cost reduction. However, in addition to this continuing trend, now customers also emphasize on bringing in innovation, simplifying the application landscape — which is lot more on values and not just the cost. So these are two changes evolved from the delivery model perspective.

While new technologies and IT platforms keep on evolving regularly, how challenging it becomes for Capgemini in keeping itself abreast of those technological changes and also meeting specific demands of customers from technology per se?

I think given the evolving trend of technology, it is absolutely essential for us as a company to bring in new technologies, ideas and innovations to our customers. We also have to be able to work on legacies because it is not that every single person is working on new technologies and it is also important to take care of those old IBM mainframes and those legacy systems.

So a big part of our company have to work on those legacy systems and they make them exciting and rewarding for our people. At the same time, they have to know — what's new and what can bring added value to our customers. So we work very closely with our partners, whether it is Oracle or Microsoft or any of these companies. We work very closely with them to make sure that we are aware of their new products or developments so we can use them better in our solutions.

Also we put a lot of effort in our employees, centers of excellence (CoE) and technology innovation hubs so that they can help to create pilots and demonstrate how new technologies come up. So, it is not one single thing, it is working with partners, training our people and investing in innovation centers.

During the last one and half years there was a lot of stress on cost-cutting across verticals; so were you facing pricing pressures in serving your customers? And how did you manage those pressures during that difficult period?

I think from an offshore perspective, we had done a pretty lean shot with emphasis on low cost and added values. Now, having said that, however, last year there was some pressure on the overall industry and not just on Capgemini. So we had conversations with several of our customers in a way as to what can we do to help them during these difficult times.

And as customers there are certain cost pressures and also being a trusted partner or as supplier we have a duty towards to work closely with them in order to see where we can cut the cost. In doing so we had taken some initiatives on that front such as we worked very hard to drive the productivity very high, passed on some discounts on to our customers, also for some customers asked us looked at ways to defer projects or do it in a way it has low impact on them. Overall we tried to help our customers in different ways.

Capgemini have more than 28,000 employees in India. So looking at this big number of staffs, how important or strategic is India to Capgemini in its overall business and innovation? Do you think Capgemini will further increase the staff numbers in India?

India is very strategic to Capgemini. It is absolutely one of the top items on the group CEO's agenda and the overall company's management, where he and the management emphasizes on every possible opportunity and considers the offshore delivery model very important for our success. And in the future we will increase out staff strength in India.