Capgemini gives fillip to automation adoption, drives training initiative

With India being the significant offshore base for employees, the company is driving the skilling initiative in the country on a large scale

IT services and consulting firm Capgemini, which has half its global employee base in India, is training its staff here in automation technologies, as it sees huge opportunity in the field.

The company said the reason for the move is that majority of the automation projects, in which Capgemini’s role was primarily to provide advisory and consultancy services, were getting converted into deployments. With India being the significant offshore base for employees, the company is driving the training initiative in the country on a large scale.

“About 2-3 years back, most of their automation-based projects were in advisory or in the consulting phase only. However, of late, almost 70 per cent of these automation projects are in the deployment phase, while advisory consists of a smaller base (around 20 per cent),” said Ashwin Yardi, Chief Operating Officer  (India) and Head (group industrialisation), Capgemini, told Business Standard.

“The scale of the projects is also quite wide, from anywhere between $10 million and $50 million of deals in automation and more than 650 clients.”

Capgemini has introduced an extensive skilling program ‘Automation Academy’ in this area, which has seen participation by over 25,000 employees. Yardi said given there are fewer skilled resources in such technologies, anyone with the right skill becomes a premium resource which, in turn, tends to push services cost as well. As the resource (skilled employee) base expands and matures, these services will drive high margins.

“More than 60 per cent of Capgemini’s work is done in India and almost every project involves automation, even if in different stages of maturity. Similarly, more than 20,000 of these employees skilled in automation are based in India.”

In its third quarter results announced this week, Capgemini reported that Digital and Cloud activities (including automation services), which account for around 45 per cent of the group’s overall revenues, grew over 20 per cent at constant exchange rates.

The company said while its offshore headcount will remain stable, the focus will be on improving productivity and driving more operations offshore.

A new report by the Capgemini Research Institute shows that less than a fifth (16 per cent) of global businesses are adopting multiple automation use cases at scale, while they are focusing on operational gains versus strategic long-term growth.

The report showed that of those organisations already implementing automation, around 25 per cent are using it at scale in the automotive sector, followed by industrial manufacturing and retail (about 15 per cent each). Among countries, the US and France lead with over 20 per cent organisations using automation at scale, with India ranking fifth (15 per cent).

Right now, automation service providers and clients are looking more at the return on investment in automation-based projects, rather than the cost itself, noted Yardi.

A large number of these projects are fixed price projects. However, the company is starting to get projects where customers are ready to work on a gain-share model, based on the project expectations.