We will continue to have industry-leading growth: C Vijayakumar

Interview with President & CEO, HCL Technologies

Just a few hours into being the boss of one of the largest global IT services companies, C Vijayakumar, or CVK to people close to him, has already started working on future strategies. Vijayakumar, president and CEO, HCL Technologies, who succeeds Anant Gupta, tells Business Standard that more than making changes, he is focussed on creating a differentiating strategy for the company. Edited excerpts:
 
What are the challenges ahead? Where do you plan to take the company in the next three years?
 
I will not say challenges, we have done very well in the last four years. We had industry-leading revenue and margin growth, so I think as a company today we are uniquely positioned to win in the new world. Moving forward, we would have more growth strategies, which is where we are really pivoting around the inflection points in the industry and I think that strategy is very differentiating. We are already seeing success and will continue to have industry-leading growth.

 

Any changes you might want to make in the company?
 
It is too early, from yesterday to today, I have not thought of what changes to make. We have a very strong leadership in all the businesses, we will see how best to make sure that everyone is motivated and they do a good job.
 
Your BPO arm has not performed that well. What are the problems you are facing in the sector and how are you addressing it?
 
The BPO business, while it is not performing well but there is a context to it. We are trying to de-focus on a lot of low-end BPO work such as voice. We are only focusing on platform-based BPO. So we have even given up a few clients, because they are in the lower end and that is not our strategy. We want our BPO strategy to complement our platform strategy. So right now we are not worried. It is a small base, we want to keep doing the right things. There is no particular challenge, we are just de-focusing on types of BPO business so that we can build the right type business for the company.

 
Why this sudden exit by Anant Gupta? What happened in the last few hours? If rumours are to be believed then the final decision was taken on Friday morning.
 
It is not that decisions have been made in the morning. We are an organisation run by a well-governed board and we have a succession planning process administered by the board and it has been part of that planning.
 
Two years back when I took charge of overall head of the infrastructure business, I was also tasked with defining the strategy of all the new services. So that is part of my contribution to the new services. So I think it has been a well-planned and nicely executed succession.

 
I think since I have had the overall role for some time, I think at some point the timing was determined by how comfortable I was and how I was able to handle everything.
 
But when was the decision of succession taken by the board?
 
When the decision is taken, we need to announce in 24 hours. But it is not a knee-jerk reaction, it is part of the larger succession planning we have for all leaders.
 
Europe has shown negative growth, is it because of Brexit?
 
It has nothing to do with Brexit. It is because we had almost 17 per cent quarter on quarter growth last quarter. When you come with a 17 per cent growth, there will always be some one-timers, so it is difficult to grow on top of that in the next quarter. Also the Europe pipeline looks a little bit soft at this point, but it is not attributable to Brexit. So we have to see why and what can be done. We have not made any specific Brexit related transitions at this point.

 
How are you addressing the high attrition rate?
 
This is a seasonally high quarter for attrition as our wage hike kicks in from July. Maybe some people did not get the expected hikes. I think we are confident that we will kind of show a lower trend in the next quarter. Primarily we are focused on retraining a lot of people.
 
The IMS and fixed price contracts contributed 59 per cent. Do you still have leeway to expand that?
 
Yes, absolutely. More are becoming managed services, outcome based, fixed price.