Salil Parekh: The man who played a pivotal role in building Capgemini’s India operations
Parekh, 50, is now one of the contenders to succeed Capgemini chairman and CEO Paul Hermelin when he retires.
Cros, now Capgemini’s chief development officer in charge of strategy and M&A, was meeting a few leaders from the India team. “Give us your trust and we can build the (Indian) operation to 10,000 people,” Parekh told Cros at that meeting. Parekh would go on to play a pivotal role in building Capgemini’s operations here, first as CEO and then in a variety of roles, including as executive chairman, from 2007 to 2010. Parekh and the 300-member team that Capgemini started off with in India has since grown to 60,000.
In early 2015, in the weeks leading up to Capgemini’s acquisition of the $4-billion acquisition of iGate, Cros, Parekh and several business heads of both firms met at a historic castle near Paris to thrash out the merger details. With this acquisition, Capgemini’s India head count will grow closer to 100,000.
Capgemini has realised 10 times more growth than what Parekh had promised Cros. “Parekh’s career at Capgemini stands as a testimony to Capgemini’s willingness to embrace leadership which originates outside of France, and to the outstanding capabilities of Salil,” says Peter Bendor-Samuel, CEO, Everest Group, an advisory fi rm. Last February, Parekh was promoted to the title of ‘directeur general adjoint’, along with four others. The title translates to deputy CEO of the €10.5-billion Capgemini. The company has fi ve deputy CEOs.
Patrick Nicolet is responsible for the general management of the Infrastructures Services strategic business unit and operating control in Latin America. Olivier Sevillia is responsible for systems integration and application maintenance SBU in Continental Europe, operating control of Capgemini Consulting, BPO and Prosodie (a French internet and telecoms services company Capgemini acquired). The two other deputy CEOs — Aiman Ezzat and Hubert Giraud — handle finance and people management and transformation respectively.
Parekh, 50, is now one of the contenders to succeed Capgemini chairman and CEO Paul Hermelin when he retires. “Parekh is a very important man. He runs a large and successful portion of the empire,” says Cros, but declines to comment on Parekh’s CEO chances.
After becoming deputy CEO, Parekh continues to hold responsibility for the clutch of businesses that include North America, financial services and others, which collectively account for about 45% of Capgemini’s revenues. “For a French company to have non-French leaders in key positions is almost as difficult — culturally — as it is for the Japanese, but they have managed to overcome that hurdle,” says Partha Iyengar, vicepresident and head of research, Gartner India.
Parekh, an IIT Bombay and Cornell University alumnus, is not the only Indian who is rising in Capgemini, which has so far spent over $5 billion on acquisitions in India — iGate now, the $1.25-billion Kanbay buyout in 2006, captives such as Indigo, Unilever’s 600-member finance and accounting captive centre in Chennai, and more recently Thesys Technologies, a banking implementation solutions provider.
Aruna Jayanthi, 51, who now leads Capgemini India as CEO, is part of Capgemini’s 18-member Group Executive Committee, a strategic decision-making body that meets every six weeks.
Baru Rao, former Capgemini India CEO, who was promoted to COO of Application Services in Europe, has now moved to North America, where he is responsible for one of Capgemini’s Fortune 100 customers. Anirban Bose, who joined Capgemini from Kanbay, now heads the banking business unit in North America.
Muthukrishnan Govindrajan, global head of testing, was earlier India testing lead for fi nancial services. Seshaiah Amisagadda and Darshan Shankavaram head infrastructure and digital services globally at Capgemini. These Indian leaders have been at the forefront of Capgemini’s global strategy. “Words such as front-offi ce and back-offi ce are banned in Capgemini,” points out Jayanthi, who is also chair of the Sweden country board. “The intent with this leadership team is very much market and business-oriented. There are some companies that haven’t been able to globalise because they haven’t put the market upfront. Paul (Hermelin) and other leaders put the market fi rst,” says Parekh.
THE KANBAY LEAP
The Kanbay acquisition, in many ways, marked the beginning of Capgemini’s evolution as a serious global scale player, taking its India strength to 12,000 — small by today’s standards but a significant number then. “It was extremely important for Capgemini in terms of signaling — both internally and externally,” says Iyengar. “It gave them key lessons in integrating across the EU, Indian and US cultural issues.
Through Kanbay, Capgemini also got a presence in the lucrative IT market for financial services. Today, financial services contributes 22% of Capgemini’s revenues and is its top revenue earning segment along with public sector enterprises. “The growth of the Kanbay global model is today what you see as our financial services. Kanbay was mostly banking but our other colleagues learnt from them and created an extremely successful insurance practice from scratch,” says Cros.
“Within Capgemini, the Kanbay acquisition is considered a huge success, and the reason for that is that it was the agent of transformation or the action that transformed the company internally to look at offshore in a much larger way,” adds Parekh, who was promoted to lead the business unit for application services in North America, UK, Asia and fi nancial services in 2011.
The Kanbay cultural integration held important lessons for Capgemini about working together and gave it the confidence to scale up to 60,000 people in India.
“They have also managed to build their brand and integrate very well in India unlike many of their Western counterparts,” says Sudin Apte, CEO, Offshore Insights, an outsourcing advisory firm, pointing to how Capgemini India’s CEO, Aruna Jayanthi, is an executive council member of Nasscom, the software industry lobby group in India. Through the downturn and recession that followed the fi nancial crisis in the US, many IT services vendors cut down on hiring and let go OF leaders, but Capgemini used the opportunity to hire leaders and build scale, says Iyengar.
A lot of the India leadership pool also fed into Capgemini global leadership. The leadership pipe has grown fatter in recent years as India grooms more leaders and talent, says Jayanthi. “Again, this is a reflection of the ‘do whatever it takes to achieve global sourcing success’ mindset. Indians are acknowledged as global sourcing leaders and this is a smart way of not ‘re-inventing’ the wheel,” says Iyengar.
Given India’s growing importance — Capgemini now has more employees in India than in France — Jayanthi’s role has also become more important to Capgemini’s overall strategy. Like Parekh, she was part of the India founding team and moved on to head its global delivery, improving effi ciency and productivity of those operations, before returning as India CEO.
With the iGate acquisition, the roles of Jayanthi and Parekh will come into a sharper focus. “As a key member of the management team, Parekh has been involved closely in evaluating the acquisition and in the fi nal decision from the initial days,” says a person associated with Capgemini, who asked not to be named. “As head of North America and of the financial services business, which is also where a majority of iGate’s revenues come from, Parekh will play a major role,” the person added.
Since the acquisition is yet to close, people ET spoke to were reluctant to comment on what the final structure would look like. As Capgemini India CEO, Jayanthi’s role in the integration of the different delivery methodologies and how both teams in India execute together will also be critical to the success. Prior to the acquisition, Jayanthi was actively involved looking at go-to-market, delivery synergies and any potential issues that can crop up in the combined entity, the same person said.
For Capgemini, there is a lot riding on this acquisition. And so far, experts say, its track record with acquisitions — it has done 40 major ones so far — has been mixed. To make this one a success, it will have to lean heavily on the culture it has created of moving from an insular to a more open mindset and tapping the best of all worlds.
“At this juncture all eyes are on the integration and who can shine most as a leader in the new firm. I see this as a competitive situation between the deputies (and others) to prove their worth,” says Phil Fersht, CEO of HfS Research