Genpact CEO: ‘We are investing $600 million over three years in AI’October 7, 2023
‘AI is not a new thing for us. We started our AI journey in 2015.’
Genpact is sharpening its focus on generative artificial intelligence (GenAI).
While cost reduction and digital transformation remain high priorities for clients, they are increasingly turning to Genpact to help accelerate their data journey, says NV ‘Tiger’ Tyagarajan, chief executive officer (CEO), Genpact.
NYSE-listed Genpact has more than 115,000 employees, majority of whom are based in India.
In an interview with Ayushman Baruah/Business Standard, Tyagarajan talks about the investments in GenAI, acquisition strategy, and the technology spend environment.
Genpact is investing $600 million in AI over three years. Could you explain where and how this investment will take place?
Yes, we talked about it in our second quarter earnings call.
We are investing approximately $600 million over three years in AI.
This would broadly come under three buckets. First is research and development (R&D) spend to build solutions.
The second bucket is capital allocation used for acquisitions.
With the kind of acquisitions we have been doing for a few years now, a number of them have a deep connection to AI, whether it is Rage Frameworks or Enquero.
The third bucket is the investment on training because we cannot do the first two without this one.
How is Genpact using GenAI, both from a client and internal usage perspective?
We approach GenAI exactly the way you said it — for our customers as well as internally.
We do new work with our customers as well as use GenAI in existing projects.
First, AI is not a new thing for us. We started our AI journey in 2015.
Since then, we have focussed on AI and machine learning (ML) as well as large language models.
In those days, we called them natural language generation or natural language processing.
So, we have incorporated those into our solutions for many years now.
What we are now doing is obviously incorporating GPT 3.5 and 4.0.
We have a use case where we do a competitive analysis for an automotive customer.
The team used to produce an analysis report every Friday.
Now, we have done pilots where we have used GenAI to pull and synthesise the data to produce the report.
Now, we can give the customer a report every day instead of every Friday.
We are doing it for 100 models of cars across 100 markets because we have the capacity to do that.
Internally, we are working on many use cases.
Probably, the most important one will be in training our people faster.
Say, if training someone on a complicated process took six weeks earlier, using GenAI, we can bring a copilot, who is almost sitting with the person.
Within two weeks, the person can start doing transactions.
What is your mergers and acquisitions (M&A) strategy and are there any acquisitions in the pipeline?
Our acquisitions are driven by our strategy. And, our strategy clearly lays out a set of industry focus areas, geographic markets, and services.
Our acquisitions have always been to add capabilities in those areas.
For example, in 2018, we acquired Barkawi Management Consultants as supply chain was a big focus area for us then.
So, our acquisitions continue to complement the areas of focus in our business.
Emerging services like supply chain, sales and commercial services, financial crimes & risk, are three examples.
Our acquisitions are focused on the industries we serve like consumer goods & retail, life sciences, healthcare, high tech, manufacturing, and banking, financial services and insurance (BFSI).
Data and analytics is a horizontal that cuts across all these technologies.
In 2016, we acquired Israel-based PNMsoft that gave us a no-code, low-code workflow on Cloud.
Our acquisition of Enquero gave us a technology called PowerMe, a data intelligence platform.
Acquisitions must make sense from a financial, strategic, and cultural standpoint.
With a slowdown in the global economy, do you see a cut in technology budget, especially in BFSI?
Yes, without doubt, not just in BFSI but in many sectors.
A trend we have seen in the past few quarters is a sharp focus on what the technology implementation is about and what the project is about.
This trend is likely to continue. Clients are asking why we are spending this money.
We cannot say that we will offer you some big benefit in three years.
The benefit has to be shown now. The banking sector is obviously a great example of this but even in the consumer goods sector, there is caution as there is a decline in discretionary spending.
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