BENGALURU: Aiman Ezzat took over as CEO of Capgemini about a year ago. He’s had a close relationship with India. He says he’s made at least a 100 trips here since his first brush with the country some 20 years ago.
Ezzat even worked in India for a few years with IT services firm Headstrong.
The €16 billion Capgemini today has 1.2 lakh employees in India, more than half of the French IT services company’s global strength.
In an exclusive interaction with TOI, Ezzat said India is not just Capgemini’s largest delivery engine, but also a key innovation hub. Excerpts:
Do you think Capgemini has come out stronger from the pandemic? You previously said that since the global financial crisis (GFC), you’ve really built your resilience. What are some of the takeaways?
Capgemini today and what it was during the GFC are two different things. Business was much more centralised in the financial crisis. It’s more globalised now. We have a more diverse sector base. One of the tests for the crisis is the level of resilience and agility of Capgemini.
Investors were looking at both. And we came good on both. Last year our margin fell just 40 bps. We integrated with Altran during the pandemic. We went to 97% work from home quite quickly, and the clients were happy with what we have delivered. People were concerned about work from home, but the level of engagement and intimacy has gone up.
Capgemini expects to grow at 7%-9% in constant currency in 2021 with 450 bps coming from the Altran buyout. The organic growth forecast is between 2.5% to 4.5%. However, Indian IT firms have made a strong recovery and are looking at double-digit growth from the lows of last year.
This is an average for the year. We expect Q1 to be slightly negative, with the pace accelerating starting in Q2. We are targeting to get to our mid-term organic growth guidance of 5% to 7% by the year end.
Following the steady market recovery and with promising market dynamics, the Group is ready to create more value in 2021. We are extremely well positioned on what is driving demand – cloud, data & AI, connectivity, software and cybersecurity.
The India-based IT services players have been doing better than many of their MNC peers over the years. Their growth rates, their margins are better. How do you see that?
If you look at it from a financial numbers standpoint, they tend to have better growth and better margins. Some of it is linked to the model and business mix. When you run management consulting businesses, they don’t deliver 25% margins.
The important thing for us is our relationship with our clients and how we are positioned with them and what we do. We will not deliver the kind of margin that you see coming from those with a high offshore leverage. The fact that we have 100,000 people in Europe has an impact on the model.
In the coming years, we will see some acceleration of the topline. It’s a journey and we are transforming the business that existed for 50 years. The Indian IT firms jumped on the wagon starting 20 years ago, and it’s a newer business in a certain way.
Digital and cloud form 65% of your business. With Altran, engineering services has emerged as potentially a third engine of growth. How do you see this changing the business velocity?
Engineering and R&D is about 50,000 people and 20% of the group. The reason that we do that is not because engineering and R&D is a good business as a service line.
For us, it’s because of the digital transformation that’s happening on the operations side. And not only in what people call as 4.0, which is focused on manufacturing and supply chain. It’s across all industries. It’s about making them all intelligent. These are industries that have electronics, but no software.
How is your India delivery engine geared towards embracing a digital-first playbook?
I remember when I started running financial services in 2008, my team was based in India and within 18 months we had to switch to 90% Java. The speed at which we can make changes in India, the speed at which people here can adapt, has always amazed me.
But it’s not so much about skilling as about scalability, and we are going through a strong phase of demand in India and our challenge here is to attract and retain talent. I think what the India leadership has done in terms of talent will pay off in the long run.
What are your new expectations from India? Will the proportion of India in your overall employee base go up further?
It could. There’s still a lot of demand for India talent, but we are also working more efficiently. India is not about a delivery centre – that was ten years ago. India for us is innovation, and we have introduced the concept of India account leaders.
We have many India account leaders who will be groomed to become global account executives. As we focus on industries, we are creating centres of excellence around specific industries in India. India is a place where we know the work we do across our clients.
Someone working for an auto client in France doesn’t necessarily know what work we are doing in China or in the US for other clients. But in India, they know everything. So the India account leaders can be proactive in coming up with propositions for our clients.