Phil Fersht — CEO and Chief Analyst, HFS Research[01:07]
Yeah, thank you, Mark, great to see you again, AJ, and it’s great to get some time with you, maybe a little up close and personal. And hear a bit more about your thinking and where you’re going to take a company like Zensar, but maybe we backtrack a little bit and hear a bit more about you. Have you always been in the tech business? Is this what you wanted to do when you left college, all those years ago?
Ajay S. Bhutoria — CEO, Zensar[01:15]
Yeah, you know, a bit of an accident really getting into this field. So I started my career — I grew up in Calcutta in eastern India. And just by chance I found an apprenticeship with a software development shop. And spent the first couple of my jobs as a software developer with a couple of boutiques back home. And then in ’91 I joined TCS and spent the next 10 years with them, the first six of which were in technology delivery. And then the last four in technology delivery across India, Germany, Switzerland. And then the last four, I ran the Dutch business for the firm, and this was also the first time I moved out of technology into a P&L role — business development and P&L. Left TCS, left Europe, end of 2001, came to the US and joined Cognizant and spent the next 17 years with them. Joined them in their financial services practice and then moved back to Switzerland in 2006 as a part of the then Cognizant thrust into the European market. Three years in Switzerland to incubate that business. I found my successor, a local leader as planned, and came back to the US, back to financial services. And then until 2016, over a series of different roles, ended up with a leadership position in financial services for Cognizant in the Americas. Big rotation, ended up getting global responsibility for retail, consumer goods, travel, hospitality business. I ran that for three years, had a good run. And then towards the end of 2019, I left Cognizant and joined a startup. I had a very short stint with them, called L&T NxT, promoted by the L&T Group. And then sometime towards the end of last year, I was recruited by Zensar, joined Zensar in January, and here I am.
Phil Fersht — CEO and Chief Analyst, HFS Research[03:42]
Good. So, so what gets you up in the morning these days? You know, you’re running a business like Zensar, but when you get up in the morning, what’s the first thing that crosses your mind?
Ajay S. Bhutoria — CEO, Zensar[03:53]
Yeah, you know, it’s leading a company of 10,000 passionate, noisy bunch of associates who have such a lot of expectation with what they want from Zensar as a company they work for. A great set of clients who have trusted us for a long period of time, looking to transform and accelerate through the pandemic. And a market that is in a technology super cycle. So if I were just to break it down, an internal view is how do you take this company with a solid foundation to fulfill its true potential towards its next leg of growth. An external view is clients trusting us, not just with their immediate agenda, but also in terms of how we support them towards their future ambitions and plans. And then, most important of all, is to ensure that our associates find us to be the best place to work and to grow.
Phil Fersht — CEO and Chief Analyst, HFS Research[05:08]
Yeah, so what do you think of the… I mean, you’ve spent a lot of your career working for multi-billion-dollar tech businesses, obviously with an India heritage, to a smaller-scale business now. What do you feel are the key differences that you’ve been experiencing in terms of the culture, the attitude, the way clients engage with you?
Ajay S. Bhutoria — CEO, Zensar[05:30]
Right. So, you know, when I joined TCS, TCS was 3,000 people. And when I left them, they were a shade under 100,000 people. When I joined Cognizant, it was 5,000 people. When I left them, it was a little over 275,000 people. So I had two very, very exciting rides. And also having worked with firms that were fairly small and then grew in size and scale — so what I found in Zensar is not something that is new to me. So that’s the first thing. The second thing is, scale of this size, about 10,000 people, has its advantages and disadvantages. Advantages, because you’re agile, you’re nimble, you respond to market needs and customer demands somewhat faster than if you were much bigger. Of course, there are advantages of having scale in terms of client spread, in terms of geographical spread, which you don’t have if you are a firm the size of ours. But the beauty that I see now in this environment, like I mentioned, we are in a technology super cycle, is that the advantage of scale players in terms of size is somewhat diminished given the nature of buying behavior we see in the market. So actually this is a great place to be in right now — a firm of this size, a firm with this pedigree and background and with this foundation.
Phil Fersht — CEO and Chief Analyst, HFS Research[07:09]
OK. So we’re kind of 18 months into this pandemic. We’ve seen some real lows and some euphoric highs in a weird way. Do you think we’re now in a calm before a storm? Do you think there’s going to be a big what-next coming up in the next few months? What do you see unraveling as we limp our way out of this?
Ajay S. Bhutoria — CEO, Zensar[07:34]
So, so, Phil, let me start by saying the obvious, which everybody talks about, is the pandemic has crunched what would have taken three to five years into 12 months. And that massive compression of what would have otherwise been five years of evolution into a single year, that continues. And to break it down in terms of what we see with our clients and with the markets: the new channels are driving need. The new channels are creating a need to deliver ever-improving quality of interaction and engagement with the customers. So what that means, if we double-click, is that this touchless, contactless, frictionless world — where there’s a lot of investment in terms of driving better quality customer experience, deeper customer engagement, ensuring higher customer loyalty — is not just for the front end. The bigger play, arguably, is how the clients are rewiring themselves to deliver to the promise of the front end, be it rewiring their supply chains, be it re-engineering their mid and back office. And this has unleashed a massive amount of demand. And as they do this kind of rewiring, there is need for velocity, because their competition — a lot of them are digitally native firms, digitally native startups working on architectures which are new and which make them super agile. So now the Fortune 2000 is having to accelerate this rewiring so that they could also compete in this super-agile fashion against these disruptors, right? And therefore, in order to drive this agility, one of the first things you would do is adopt the architecture driven by cloud, because that inherently drives agility, that inherently drives velocity. So you see massive demand explosion in cloud-native technologies. And then on the other side, again stating the obvious, is using the power of data to drive straight through — to drive decisions, to drive insights. So this situation, where there’s massive investment in cloud-native architectures and massive investment in data, is creating, or has created, this demand super cycle. And my personal view is this will last for at least 36 months, if not longer.
Phil Fersht — CEO and Chief Analyst, HFS Research[10:38]
Right. And what do you think the impact’s been on the India IT industry itself when we look at pre-pandemic normality to what is happening now? Do you see some sort of snapback to more centralized, people back in the office? I hear a lot of people are going to go back in soon. Or do you think something different is going to happen with the Indian environment as we emerge?
Ajay S. Bhutoria — CEO, Zensar[10:38]
Right. So I think people have started coming back to office but in very, very small numbers. I personally feel that this hybrid environment is here to stay. So that’s one part of what’s happening with India and the industry in India. And in many cases, it creates challenges. It also creates a lot of opportunities. The other dimension is regarding the pattern of demand. And there it’s a bit of a tale of two cities. So while clients have to drive an increasingly expensive transformation agenda, not all of this can be funded by increased budgets. So we see an extreme push, more so than in previous years, to compress the run side of the house, right? And to run this — so continued compression and support, application, infra, continued optimization and continued commoditization. And that is being driven largely through efficiency. So that is, in the tale of two cities, one city, which is getting compressed. And the other side is what I spoke of, which is a massive mismatch, because of this high degree of demand and what has been a fairly inelastic supply situation. You know, the demand’s gone through the roof, but on the other side, the labor market is completely inelastic, and that has resulted in a fairly volatile situation in the industry. For the hyper-aspirational Indian labor force, it’s the good old days. But then for a firm like us, it’s how we navigate through this mismatch in demand and supply that is going to determine how well we do in the future. And the way we see it is that we’ll have to go back, revert back to how it was back in the day, where a lot of effort was put in to generate organic talent. We are looking to expand across geographies from a supply chain perspective just so that we have a bigger catchment to get talent. And also working to retool, retrain, reorient our existing workforce. And towards that, Phil, one of the biggest things we’ve done is we’ve taken one of the seniormost leaders in the company out of her core delivery role and appointed her as responsible for talent supply chain. And that is organic, lateral, and retooling, retraining. That is how important it is for us. So that is what I see happening in the market. The other thing I’d like to stress upon is that how we position ourselves to the market, in terms of structuring ourselves, structuring our go-to-market, is also critical for us to really surf the wave that is created due to this super-demand super cycle. And what we have done, Phil, is that in the first quarter of this year, we did a massive strategy refresh. We have reoriented and restructured ourselves around five what we call strategic growth opportunities or strategic growth areas, those being experience services, advanced engineering, data engineering, core traditional application services, and infrastructure services, which we call foundation services. And to operationalize this, we’ve created a very precise, crystallized set of services which we call playbooks, and there are 21 that we have identified. And then we are supporting this through what we call four pillars of execution which, apart from sales expansion and talent transformation that I spoke of, is also how we deal with partnership with our core partners, especially the platform players and the hyperscalers, and then how we selectively pick M&A as a vehicle to just leapfrog certain areas of competency that we want to get to faster than we would if we were to do it organically.
Phil Fersht — CEO and Chief Analyst, HFS Research[15:53]
It’s interesting. So you said you put one of your top executives on the talent supply chain. This is obviously critical to what we’re seeing in the industry. You talk about unprecedented demand, but clients don’t have an infinite budget to keep spending more money on this. So obviously the key is to retain talent and drive more automation, things like that, right? So what do you think is working to keep the best and the brightest at a company like Zensar? Is it you give them more money? Is it you give them more learning opportunity? I mean, how are you going about keeping your talent and really flourishing in this environment?
Ajay S. Bhutoria — CEO, Zensar[16:16]
Right, right. So, Phil, more money, for sure. More learning opportunities, for sure. A great place to work, right? The required flexibility that the millennials are looking for. Speaking back of the hybrid work environment — at the start of the pandemic, we had three locations: Pune, Bangalore, and Hyderabad. Now we’ve got associates working from home out of 28 different Indian cities, right? So that’s a trend that’s not going to go away. Giving them pride to work for a firm like Zensar. And, you know, we are a part of the RPG Group. The core ethos of the group is happiness. And we do our bit to make sure that, despite the industry we are in, despite the speed at which we work, despite the pressure under which we work, we provide our people with a great place to work — outside of good money, good learning opportunities, good place to grow.
Phil Fersht — CEO and Chief Analyst, HFS Research[17:47]
Interesting. So as you look at this model, as it continues — it’s interesting because it feels to me like it’s almost opened up opportunities for you to bring on staff, because you’re not so tied to three locations, you can go for more. Do you see, as the economy shakes out a bit more, you’re going to get more demand for people to go back to the office, especially with young talent and training and things? I mean, it’s real uncharted territory that we’re gravitating into, right?
Ajay S. Bhutoria — CEO, Zensar[18:03]
Yeah, yeah, for sure. So there’s going to be opposing forces. There’s going to be one force that is going to drive them to these three locations. There’s the other force which is, look, let them work out of these 25, 28 locations. There are advantages of working remote, but there are disadvantages as well, in terms of coming together, in terms of having culture of the firm, in terms of just camaraderie if you work in a cohort. And we are trying to skin this cat in many different ways, right? So one is that, in the not-too-distant future, we will open up these centers again. Right now they’re largely empty. So in the next four to six weeks we will have people coming in. So those who are coming in again, we’ll provide them with flexibility in terms of the number of days of the week they come to work, the population that is at work at any point in time — for example, people are talking about 25%, 50% ceilings, etc. But a couple of other things we are looking at: we are looking to expand out of these three locations by creating satellite offices in other towns. And these will be proper full-fledged Zensar offices. We are looking at two right now. So in the next quarter or so we will announce two of these satellite offices, and we are looking at two additional satellite offices, which we will set up over the course of the next maybe six months in tier-3 towns in India. The other thing is, we are also trying to see, in places where we will not have a center or a satellite office, how do we enable cohorts to come together and meet? So if I have people in Jaipur in India, where we will not have a satellite office — our satellite office will probably be Delhi — then how do we… we’ve got like 50 people right now living and working in Jaipur. So how do we get cohorts to come together and enable that to happen? So there are some very innovative ways and mechanisms we are looking at in order to help people work remote and yet allow them to come together in a cohort, in manners that are easy for them. So, a very long answer, but we really have gone through this in great detail in terms of looking at the opportunities and the challenges and how to make this work best truly for our associates and for ourselves.
Phil Fersht — CEO and Chief Analyst, HFS Research[21:05]
Excellent. So where are you going to double down, where do you think the future lies from a growth perspective as you look at industries, as you look at technologies? Where do you think a company like yours can really make an edge and a difference as we look at the next couple of years?
Ajay S. Bhutoria — CEO, Zensar[21:22]
Sure. So, Phil, about five years back, we started on this Living Digital journey. A lot of the work we did around Living Digital was how we internally rewired ourselves, where now the firm works in an economy of apps. Basically, I can run the firm on my smart device. But on the other side, there was an external view where we made a couple of good investments in experience and design firms. It took us a while to get them integrated into Zensar because this was a new muscle we built, and I was fortunate that when I came in, these firms had been with Zensar for the last three to four years. So the first thing is that, with that new muscle we built, is to deliver product and experience, research, design, and strategy services to our clients, and also to use that muscle to deliver creative and content services. So that’s one. Second thing is, an experience or a product design exercise is not complete until you develop an MVP and then follow it through by delivering the platform. And towards that, we have completely revamped the structure and created a new service line which we call Advanced Engineering Services. And what that does is, on one side, it delivers that complex MVP, minimum viable product, or the prototype, that is the end deliverable of a design exercise. And on the other side, it also runs our cloud-native full-stack practice. And closely aligned with that is our data practice, because you can’t deliver on the promise of advanced engineering unless you have a compelling skill set and a compelling capability around data. So experience to engineering to engagement is where we put one big bet. The other big bet is on the other side of the house, which is on the support side of the house, where we have a very unique framework in terms of how we go to market. That framework is, again, experience first, so it’s experience-driven infrastructure services. And that’s a framework that we launched about three years ago, and it’s held us in very good stead — good wins, solid pipeline. The city of San Diego deal that we won is actually being delivered by that group within the firm. And that’s another place where we are putting a very substantial bet.
Phil Fersht — CEO and Chief Analyst, HFS Research[23:47]
Excellent. Well, this has been most refreshing, and it’s great to hear more about Zensar as you take the reins and really sort of bring the company through a crazy period in our existence. And it’s been great to see the middle tier really advancing aggressively, including yourselves. So I look forward to tracking the company, meeting you more in the future, and seeing how things evolve. So thank you for your time today, AJ.
Ajay S. Bhutoria — CEO, Zensar[23:51]
Thank you. Thank you so much, Phil. It was lovely speaking with you.
