We are building a war room to boost client engagement: Tech Mahindra CEO

Tech Mahindra’s Q1 FY19 numbers lacked the financial firepower of its larger Indian rivals. Though the firm’s revenue growth was mostly in line with the Street’s expectation, telecom segment continued to be a cause of concern. The company’s Chief Executive Officer and Managing Director C P Gurnani, in an interview with Romita Majumdar says much of the effort will go towards improving deeper engagement with top clients while the segment is expected to pick up as 5G trials gather momentum. Edited excerpts:

Client mining seems to be a concern with top clients dragging your growth to some extent?

It is an area of slow improvement and we need to work harder. I am putting together a war room to focus strengthening client engagement. If I understand the client better, I will be able to engage better with them. However, some of our top accounts are going through internal transformation. So I won’t read too much into it.

Do you think employee utilisation has reached a peak and there is change in growth strategy?

If you look at the other top players, you will see utilisation levels are up to 87 per cent. We are running at 84 per cent. So, there is still a scope for improvement but beyond a certain point we are looking at more new age delivery models. We are looking at having chat bots to improve productivity. 

Are higher sub-contracting costs and onsite costs weighing up on your profitability?

Both correlate directly with digital deals, which require more hands-on presence. The digital deals need more devOps, agile processes, which require working closely with clients on shorter projects. I will not say unavailability of talent is pushing this as much as the fact that working closely with clients is required for these new technologies. We are also hiring according to our requirement. We are recruiting freshers in the US, Canada, Mexico, Brazil and nine centres in Europe.

Telecom continues to drag your growth. Where is your communication segment strategy headed?

From Comviva point of view, it has been affected by seasonality. Similarly, for the communication group, they chose a strategy to get into platforms and they’re working towards it instead of depending only on pure IT services. I am confident about them. Trials for 5G have started and are expected to accelerate towards October, and by FY20, you will see more implementations. Other verticals are also doing well. If you look at the vertical strategy, the focus is on sub-verticalisation instead of calling them full verticals, which is working very well for our enterprise business.