Phil Fersht [01:03]
Hey, thanks, Mark. Great to see you this morning, Vikas — I hope you’re well. And great to have you address our HFS network. So maybe we can start a little bit just about you and your background, and where you came from. Was being an exec in a big services firm what you always wanted to do? Did you have other plans when you were younger?
Vikas Bhalla [01:27]
Hi, Phil. Good to be here, and thank you for having the session. Yeah, you know, I was born in Delhi. I did most of my schooling in Delhi, though for a few years my father decided to move to the hills, which is the Kashmir Valley, and I spent a few years there, which was wonderful. But then for higher education I did come back to Delhi. I got my engineering degree from IIT (BHU) Varanasi. And after that I’ve worked in various locations, but going back home has always been Delhi, India. With respect to working in EXL in this industry, that’s actually quite interesting. When I was studying engineering, after my degree I wanted to be an engineer — I was very good at engineering, so I wanted to be an engineer. I started working in the chemicals industry. At a very early stage of my life, I decided that I wanted to eventually run a business. In my mind, people make careers in one of two dimensions: either it is functionally oriented — you want to be in finance or marketing or HR and operations — but there are some people who want to be in a particular industry and run a business, run a P&L. And from the very beginning, I was quite intrigued by people who ran businesses as general managers, and I wanted to do that. So when I started my career in chemical engineering, one of the things I realized was that it was probably not an industry I wanted to be in. It wasn’t really a happening industry, a fast-paced industry; it wasn’t growing fast. So I started looking for other industries. After spending a few years on the chemical industry side, I looked at outsourcing as an industry, and this was back in 2001. If anyone was looking for an industry to start working in, that was really the in thing in those days. And that’s where EXL happened. Of course, when I went into EXL and started my stint, lots of very interesting things happened. It took me a few years to finally decide that yes, this is the industry I really want to make my long-term career in. It’s been over 20 years now that I’ve been in this industry, all in EXL. And I can tell you there’s never been a dull moment. The pace at which this industry has changed has been fascinating.
Phil Fersht [03:53]
Yeah. How’s it changed, you know, being based in Delhi for most of your career? How’s it changed working for a global provider out of India, and especially in the last maybe two or three years? Is it very different? Do you feel like it’s become almost irrelevant where people are based now in terms of how you service clients, that sort of thing?
Vikas Bhalla [04:19]
So, you know, I have been part of a joint family system, something which is still very common in India, and I’ve been used to three generations living in the same house. That’s been an important part of my upbringing, and I really wanted to continue that as long as I could. That was one of the reasons why I wanted Delhi, India to always be the home to go back to. But given that EXL is a global organization with markets all outside India — even though India is still a key delivery location — to be able to do a global job, which I’ve been doing in EXL for the last 10 years, based in India has been challenging, because you end up working multiple time zones and you end up traveling a lot. There was a period of time when I was traveling probably 100 days every year, but Phil, you’ve been doing it, I know that, so you tend to get used to it. So it was basically working multiple time zones and traveling a lot — that’s what life was. And I was quite happy doing it. The pandemic changed it, because suddenly everyone was remote. There was no location you had to be in, no place you had to be in; all you needed was a computer, good connectivity, and you are at par with everyone else in the world. And I think that change, even though it will not remain entirely like this — all remote — there’s no 100% going back to the office. So I don’t think very location-specific business models will continue. It’s going to be a hybrid world; I think we all understand that. And to that extent, I think it’s become easier. I am beginning to travel now, but I don’t think travel will be as much, and I think the job can be effectively done from wherever you are.
Phil Fersht [06:11]
Yeah. You know, you’ve talked a bit about the rise of an entrepreneurial culture, people pursuing more of their passions, this acceptance of the virtual-first approach, I think you’ve used here. Talk a bit more about this entrepreneurial culture that you’ve seen really foster, particularly since the pandemic times.
Vikas Bhalla [06:33]
It has, you know, this entrepreneurial zeal — this was happening before the pandemic. You could find an increasing number of young employees wanting to do something of their own. They all had some idea that they thought was very good, and they wanted to pursue that. When I came out of college, the first thing I was told was that the most important thing you have to think about is loyalty and longevity. So go for the right industry, go for the right employer, and then commit yourself to that long term. But I think that is being very fast replaced by experimentation and flexibility. I’m finding that many of the younger employees are much more comfortable experimenting. They want the flexibility, and with that comes the confidence to pursue your passion and take up entrepreneurial adventures. I started seeing that before the pandemic, and the pandemic accelerated it, because people started really believing in following their passion.
Phil Fersht [07:47]
And then, the advice you give —
Vikas Bhalla [07:50]
Sorry, go ahead.
Phil Fersht [07:52]
Yeah, it’s like — we probably grew up when we were similar age, but we grew up learning about doing maybe one thing well, one way. And now it’s a lot about trying new things, new areas, new industries, new techniques, even learning new technologies, and having that adaptability to do different things and be more successful in new areas. That seems to be something you’ve been seeing a lot of with talent, particularly younger talent now?
Vikas Bhalla [08:22]
Yes, absolutely. I think people are more confident, and there are a lot of success stories today that they can see and try and be adventurous around. What I’m finding is that, if you look at our industry, you’ve got to broadly break up the talent pool into two broad categories. There is the operational talent, and that’s quite abundant, frankly, in some of the delivery geographies, and there people are now beginning to start thinking about how they can actually become more innovative or start doing things which are different. And then there’s the second category, what I call the data and digital talent. These are all the employees who are into data or working on AI or working on digital technologies. And frankly, their thinking of the world, their careers, the paths they want to charter, the goals they want to pursue are just very, very different. I find that there’s a lot of entrepreneurial zeal in those employees. Merging of these two talent pools is where I think success lies, not only for the employer but also for the employee — the operational capability and the data and digital talent. And that’s something I think most organizations also need to focus on: how we merge these two talent pools. But yes, significant changes are happening in the industry.
Phil Fersht [09:58]
Yeah, I mean, we talk a lot about — I hate this term — the great resignation. I call it more of the great hurry, or the great rush now. I think companies are just moving much faster into what they know, what they need. But I’ve been really encouraged; OK, well, it’s becoming a bit of an employee’s market. I presented at a graduate ceremony for one of the service providers recently, and I was blown away with the engagement level, the intelligence level, the knowledge level of these kids — they must have been in their mid-twenties, most of them. They understood everything I was talking about, and the energy and excitement and understanding and lack of fear was really eye-opening. Whereas I did a similar presentation to a bunch of CPOs just a couple of weeks ago, and it was very hard to get them out of their comfort zone and talking about things that weren’t very familiar to them. So I’m really starting to see this entrepreneurial, learned, knowledgeable culture developing from the younger generation that we’ve created for them.
Vikas Bhalla [11:07]
And it is exciting. I totally agree. And I think this whole gap — the number of years between two generations — that gap actually is shrinking quite a bit. At least I remember when I was coming out of college, we used to think of a generation gap every 20 years or so. I think now there’s a generation gap every three or four years. You know, my daughter, who’s 22, and my nephew, who’s 14, are seven and a half years apart, and I think there are a couple of generations between them. Because my nephew is going through technology at a much earlier stage of his life at a much faster pace. And what that is doing is giving him a very different perspective to what my daughter has, to what I have. We can see that in our employees; every three years you get this new fresh wave of very differently thinking talent. And so the pace at which you’re finding these new generations and the way of thinking coming in is changing, and it really is quite fascinating.
Phil Fersht [12:07]
Yeah. So you lead insurance for EXL, which is such a strong industry for the company. You’ve really built the reputation of the business, your insurance capabilities and strengths. Specializing in one industry, what do you think the secret sauce is there? And as we look at shifts in supply chains, value chains, partnerships, do you see someone like EXL gravitating into adjacent industries more in the next year or two?
Vikas Bhalla [12:43]
Yeah, so I think you are right. EXL as an organization is extremely focused on specific industry verticals. We realized at a very early stage of our evolution that most differentiation you can actually create for your customers is based on how well you understand their business. And that really comes from your understanding of their domains. So you need to specialize around those domains. And while we were sort of gravitating towards certain industry verticals because we had momentum, I remember in early 2014 we formally verticalized and created insurance, healthcare, and emerging as some of the industry verticals. So we are in a select few verticals. Our management philosophy is to build everything within the vertical. So you have dedicated delivery teams, thought leaders, solution providers, analytics, digital resources, so that they gain expertise. And the value proposition to our clients is that we will bring to you solutions which are not based on what we learned from you, but things we have learned over the years having worked with so many insurers, and so we can bring those solutions. And very importantly, the value proposition to the employee is that we are not helping you build a career in the outsourcing industry, but we’re helping you build a career in insurance. It’s got a very different ring to it, and that’s how we’ve been working. I think this focus on the domain has really stood its test over many years, and we continue to do that. Your question about will we move into adjacent verticals — maybe yes. I don’t know. But I think one thing that is certainly happening is that even within the verticals, there are under-penetrated areas or white spaces or new product areas. So if you think about cyber insurance, that was a very small, minuscule product line a few years back, and now not only is it already big, but growing at a fast pace. So that’s a new product line with a very different set of dynamics, where the nature of risk is non-tangible risk and sometimes can be very intangible. There’s this whole area of intangible assets, NFTs, which gets created. So as these new — what I call modern problems — become larger, cyber risk, intangible assets, I think there’s enough headroom for growth within even the insurance vertical. So that is certainly going to happen; we’re going to keep going into these new product lines and new service areas. Into adjacent, like I said, I don’t know, it could be, but we’ll know in time.
Phil Fersht [15:44]
Yeah, and how do you see the role of a service partner changing? With the emergence of this hybrid work environment, the increased digital fluency of the younger generation, how do you see the role of the provider changing as a result of that? What types of services do you see you doing more of and less of in the near and long term?
Vikas Bhalla [16:10]
So I think the role is changing a lot, and it’s changing at a very fast pace. And it’s all driven by how we see the overall industry evolving and changing, and how newer technologies are actually coming. So let me give you a few areas and examples. A few years ago, you would say that we run operations for an insurance company. Let’s take an example of new product launches or new business. The discussion would be, how can we support that by providing you with services which are provided largely by humans and pure-play global delivery models? So it was like an outsourcing service, typically charged by time and material. Now, from there, today we’re in a situation where we’re actually doing end-to-end product launches for insurers. So we bring in the technology, the data, the algorithms, the ecosystem, and the manpower required to be able to do these product launches, and basically get paid by outcome, which means we have skin in the game. A successful product launch for an insurer will also mean successful revenue streams for us. So this transition from providing human-intensive services to basically helping launch new products is a big journey, and it has happened at a very fast pace. It’s happened only in the last two or three years, frankly. That gives an example of how service providers are evolving. I think the second big area is really penetration of digital. And you cannot be at the receiving end — you don’t expect to be a strategic partner if you are the recipient of all of this rather than the one bringing these solutions to insurers. So whether it is AI-driven data extraction engines or conversational AI to help your insurance clients interact better with their customers digitally, all of these technologies need to be brought to the table. So this is no longer about that. Third, you’re right, this whole hybrid environment and the way that talent shape is changing so fast. When we went into this remote working, and we were there for three months, six months, we were all thinking this is a temporary phenomenon, that in six months’ time we’ll all be back, because we never thought this is sustainable. But if you’ve done it for two years, it just means it works. You can no longer question it. People come and ask me, are the productivity levels suffering? I said no, they’re actually better than what they were before. Is collaboration suffering? Well, intuitively I think it suffers, but frankly, when you look at outcomes, I think it has been a great period of innovation. So we’re in a situation where we are moving to this new model, which I think is hybrid with virtual first — that’s what I call it. So by default it’s virtual first, but it’s going to be hybrid, because everything cannot actually be operating remotely. And I think getting our clients and our employees comfortable with that new model is going to be a very key focus for organizations like EXL. And frankly, significant change management, because it’s going to be very different when the pandemic is no longer forcing us to be working remote. How do we still sustain that and go through — there would be difficult times — and make sure that model works. So lots of change on the table. It’s about doing end-to-end work for clients, it’s about not being recipients but providers, proactive providers of digital transformation, and it’s about working with the new normal. And then finally — and I know HFS has done some research on that and published a paper recently — it’s about the ecosystem. You can no longer be a solo player and say I do it all. That just does not work. So the transition from my function to my organization to my ecosystem, I think that transition actually is happening. And we’re finding that to be able to provide value to your clients so that they can provide value to their customers, you’ve got to bring a complete ecosystem, and you’re part of that ecosystem. And I think the success of that ecosystem is going to be very important. It’s no longer the success of only just one organization.
Phil Fersht [20:40]
That’s right. And that customer life cycle is more convoluted and complex than ever, and you can’t own it without partnering with collaborators with common goals or common regulatory issues, that sort of thing. So who’ve been your inspirations during your career, and who are your inspirations today as you look forward, in terms of where you look for guidance or focus?
Vikas Bhalla [21:11]
You know, there are so many names that come to my mind. And frankly, as you go through life — through your childhood, and then when you’re getting into your career, and then now when you’ve spent many years in the industry — it just changes. The one thing I must say is that my childhood hero has always been my father. There are so many ways I wanted to be like him, and I don’t think I’m alone in this. Many of us, if not most of us, believe that their father is their hero, and my father has been my hero. Somebody recently asked me who else, and very interestingly — and I don’t know whether this resonates with people — my other childhood hero actually is a fictional character. It is Mr. Spock of Star Trek, played by Leonard Nimoy. I remember being initiated on Star Trek — which, by the way, is probably my most favored movie or television series ever. I was a young teenager when I got initiated on Star Trek, and I could not understand that character so well, but I really liked it. And today, when I think I understand that character well, the one thing I’ll say, as Spock would say, is: it’s fascinating. Because what he brings to the table — the ability to be different and yet be so effective in what he’s trying to do — I think it’s just great. So that’s something I’ve always seen. In terms of career, it’s changed. There was a time when I used to really follow Jack Welch, and I did work in GE for a bit, so I thought the way he had built this mega engine and the way he had used Six Sigma or the internet to just make a big ship like GE change direction so rapidly and be so effective was fascinating. Leaders like Jeff Bezos, who totally disrupted the way supply chain works and how retail can be thought of. And I think all the work and thinking that Elon Musk is bringing to the table with respect to sustainability, and then achieving that distant dream about human sustainability and driving everything around it — I think those are some of the names I feel inspired by today.
Phil Fersht [23:47]
Yeah, it seems like it’s all about staying in the game, having an infinite purpose, not just about reaching the next target and milestone. This is really fascinating. Well, I think now you’re a self-confessed Trekkie and a successful executive at EXL. It’s been great hearing about you and your background and your thoughts about today’s industry and where it’s going. It’s been a terrific discussion, Vikas, and hopefully we can meet up in person pretty soon, wherever things are going.
Vikas Bhalla [24:23]
Yes, we look forward to it. You know, I’ve been wrong at predicting the pandemic so many times over that I don’t want to make a prediction, but I see some light now. I haven’t traveled for two years, and I’m gonna start traveling this weekend. So hopefully things work out fine, and it’ll be great to catch up over a drink, Phil.
Phil Fersht [24:23]
Good luck with that. Once you actually get on the plane and close your eyes and have a glass of wine or something, it’s really nice. Getting there is not so nice — all the packing. But once you’re on the plane, you won’t remember any of it; you’ll feel a tremendous feeling of relief, and then you’ll sleep.
