'The worst of times appears to be behind us'

France-based IT outsourcing and consulting major Capgemini is setting up a new division to cater solely to the domestic information technology outsourcing and consulting business. To strengthen its case, it has also hired Satyam Computer’s Vice-President & Business Head (India and South Asia), Ranjan Tayal. It’s the growth potential of the India IT services market which has prompted the $12-billion IT services major to throw its hat in the ring and give the home-grown majors a run for their money. In an interview with LESLIE D’MONTE, Capgemini’s CEO (Financial Services) for India and Asia Pacific, SALIL PAREKH, explains the company’s strategy for India. Excerpts:

Aren’t you a little late in the day as far as the India market is concerned?
I don’t think so. We started to look at India last year. India is undoubtedly a high-growth and high volume market, and the growth will be there for another 10-15 years. I must point out that we already have 23 clients in India for whom we primarily do consulting and IT advisory work. Now we want to build on this, and provide application development and maintenance (ADM) and other outsourcing services. Hence, the decision to create a new division to look after its needs...

What’s your target for this India division?
Since we will be operating on a much smaller base, our estimate is that this division should comfortably grow at a compounded annual growth rate (CAGR) of anywhere between 40 and 60 per cent.

Will you be mining new clients initially, or building on the relationship with existing ones?
It will be a mix of both. However, we will obviously be leveraging the relationship with our existing clients, too.

Which sectors do you plan to target in India?
We have a lot of global experience in the consulting and public sector domains, since we have worked with a lot of governments outside India. So, apart from the banking, financial services and insurance (BFSI) sectors, we will look at government and the public sector too. Besides, we will also be looking at the telecom sector to some extent.

How is the overall business scene panning out for Capgemini?
The business environment is quite difficult. However, we’re simultaneously seeing a lot of interest in outsourcing, despite the fact that the decision-making cycles are taking longer, and there’s a continued pressure on pricing. Nevertheless, the worst of times appears to be behind us. Things should look up by 2010.

Does that mean you will revisit your headcount target of 40,000 (currently 20,000) by 2010?
Yes. We may have to push back these targets by a year or so.

How is Capgemini dealing with US political diktats of creating more jobs abroad?
In reality, commercial decisions go much beyond political rhetoric. Besides, we are a global business and do a lot more work in Europe.