Vijay Rangineni, CEO, Mahindra Satyam BPO
SSON: Vijay, let’s start with an update. In June this year we saw the launch of Mahindra Satyam after the takeover of Satyam by Tech Mahindra in April. Obviously because of the peculiar circumstances behind the takeover, this launch must have been accompanied by its own special challenges. Can you give us an idea of some of those challenges and how you’ve been working to overcome them? How smooth for example has been the integration of Satyam into the Mahindra organizational structure?
Vijay Rangineni: Our key challenges were convincing customers and associates that it is ‘business as usual’ at Mahindra Satyam; integrating the cultures of both organizations – as it is at the root of all successful M&As; creating a joint go-to-market strategy for the combined entity; and safeguarding and enhancing investor value.
We overcame these in a number of ways. With our customers, we organized multiple roadshows across geographies to meet key customers; most meetings were attended by CP Gurnani, the CEO of Mahindra Satyam. We increased customer communication and frequent updates (launching a newsletter called "The Source" and quashing rumors on the website).
For our associates, we launched a daily associate newsletter – "News Today" – to refute incorrect media claims and communicate positive information and updates. We instituted frequent floor walks by leaders, with extensive Q&A sessions to address associate queries, and devised multiple forums for open, transparent communication. We also ensured timely salary payment and appraisals.
With regard to cultural integration, an initial meeting held in May 2009 helped Mahindra Satyam leaders understand the new vision, values and culture from Mahindra Group leaders such as Anand Mahindra, Vineet Nayyar, C P Gurnani, and others. HR and Communication teams are now playing a major role in orienting associates to the new culture.
For our joint go-to-market strategy, a new structure has been created that is more suitable to cross-selling and collaboration between different units; BPO has been identified as a shared service that will now be sold along with other key competencies such as Integrated Engineering Solutions, Infrastructure Management Services and Consulting & Enterprise Solutions. Tech Mahindra and Mahindra Satyam sales and pre-sales teams are integrating actively since the last five months to pursue deals jointly; in fact, Mahindra Satyam BPO has already started delivering to one of the customers that was a joint win.
We believe that all the steps being taken at an organization level will ultimately lead to greater investor value. The Mahindra Satyam stock is one of the best performing stocks today, and the company is among the top 15 companies globally in the IT Services industry by Market Capitalization.
SSON: Obviously without naming names, can you give some idea of how your existing clients have reacted to this year’s changes? What steps has Mahindra Satyam BPO taken to ensure minimal disruption to services and the maintenance of high standards?
VR: Customers have been understanding of the situation, and appreciate that the fundamentals of the organization are strong. They have been very open to communication from us, and are contributing to the revival process. Of course, there have been some specific concerns, which was to be expected in the given circumstances. But, I believe, we have responded quickly and in a transparent manner.
Also, the fact that fact that the organization making the strategic investment in Satyam – the Mahindra Group – is a $6.5 billion organization that has been in the business since 1945, and has a strong presence across segments helped us convince customers about the continuity of the business. Their investment to acquire 42% of stake in Satyam meant a substantial amount of cash into the business, which was an important factor in communication with our customers.
On the delivery front, we need to understand that BPO is essentially a service business… and in any service business, it is the associates rendering the services who define how successful an organization is. Our associates have clearly been the heroes of the last eight months. In several processes, we have posted significant improvements in the months following January 2009. Some numbers that will give you a better idea of how we have performed: 92% of our engagement SLAs stand above industry benchmarks; 94% of all business-critical SLAs are green – consistently over the last 18 months; the organization’s average eCDI/CSAT score of 89.17% is higher than the industry benchmark of 82%.
Clearly, associates delivering services have been cognizant of their responsibilities and have stood up for the organization when they needed to.
SSON: What’s been your own role specifically during this process? Has your job actually changed much during the upheaval - you were already CEO of Satyam BPO, after all?
VR: My primary focus has been around timely, proactive and credible interaction with stakeholders – customers, associates and Tech Mahindra. I have had the opportunity to work more closely than ever with leaders of multiple processes and functions who have come up with solutions that we have benefited from. Also, across the multiple associate-focused initiatives that we undertook over the last eight months, I have had the opportunity to interact extensively with our young workforce, which, to me, has been an energizing experience.
Also, in line with the new structure at Mahindra Satyam, BPO has been included as a shared service to be offered across Mahindra Satyam’s customer base. That has meant our greater involvement in deciding the future course of Mahindra Satyam. CP Gurnani, the CEO of Mahindra Satyam, and Sujit Baksi, President of Corporate Affairs at Tech Mahindra recently joined the Mahindra Satyam BPO Board of Directors. This shows their commitment to Mahindra Satyam’s BPO competencies, and their faith that we will play a role in achieving Mahindra Satyam’s vision.
SSON: You announced recently that you have embarked on a bit of a hiring spree, with a domestic (Indian) client’s contract requiring 1,000 new staff. This news is obviously of significance and throws up quite a few questions. First and foremost, would you say that such news is evidence that the period of crisis following the initial disclosures has now ended and that you’re on the path to - or even at - business as usual? Secondly, are you now looking for an ongoing expansion of headcount or might more rationalization yet be forthcoming? And thirdly, do we assume that you are now aggressively pursuing domestic clients as well as overseas-based buyers of your services - and if so, how much of that still-nascent market do you expect to be able to take?
VR: Certainly, the revival is well underway. Over the last 60 days, we have been one of the most aggressive recruiters in the Indian BPO space. So, while, things – not just at Mahindra Satyam, but across the BPO industry – will yet take some time to get back to being the way they were 18 months ago, the direction is positive - not just at BPO, but even in the parent organization. With more business coming in and several customers renewing their contracts, we are looking at recruiting, rewarding and retaining the best talent.
Regarding the domestic market: domestic BPO is certainly big today. It is anticipated to grow at approx. 15-18% per annum to an estimated $6 billion by 2012. We will certainly look at ways to increase our presence among Indian outsourcers, in addition to serving global customers. It gives us an opportunity to leverage global best practices – gained through our processes for Fortune 500 clients – to render superior customer service and help the client expand their customer base. With Indian customers increasingly gaining exposure to global brands and services, it is imperative that they experience the same levels of customer service in India as well. For service providers like us, that is a tremendous opportunity.
SSON: The upheaval you and your colleagues have experienced has come at the same time as the global economy has been in a state of profound turmoil. How has the global economic situation impacted on you over the past few months? It must certainly have been a baptism of fire for you as CEO!
VR: The past 12 months have certainly been a learning experience for all of us. While there has been a slowdown in the growth of organizations and the individuals who make up those organizations, across the board, there is a much greater focus on efficiencies and creating organizations that are leaner and nimbler to successfully meet customer needs.
The downturn has reinforced the importance of adhering to traditional values that result in sustainable growth and creating enduring value for stakeholders. Even what happened in our organization resulted in a greater focus on financial diligence and corporate governance. I must mention here that the reputation of the Mahindra Group globally has played a major role in convincing stakeholders to persist with Mahindra Satyam. And the results are there for all to see.
The two key reasons why we have been able to emerge from this crisis are the fundamental strength and solidity of the organization, and the timely decisions taken by the Mahindra Satyam board and management.