Nitin Rakesh, CEO & Managing Director, Mphasis, talks about business in the post-pandemic world, the oncoming age of AI and where we stand in India’s Mission 2047. Edited excerpts from an exhaustive interview…
On changes in the post-pandemic era…
The number one question everybody’s asking me is: Did enterprises spend too much and are we going backward? My simple answer to that is: The tech investing super cycle that pulled digital transformation forward is not going away.
I have not had a single CIO come to me and say: We are entering a recession and I’m going to reverse my cloud migration… or I’m spending too much on cybersecurity… or we’re entering a recession and customer is no longer important. They are not killing projects, because they’re not important but because they don’t have the money.
There is no new abnormal anymore. This is the new normal. Every business will continue to get tech enabled and digitized. Now add on top of that the additional pivot of this new super tool called AI. Think of it as a new platform.
I’m still waiting for the recession we were promised two years ago. Because if you are in a recession, there is a playbook. If you’re in a growth environment, there’s no playbook. There’s very little you can do about uncertainty. I think the trends that got kicked off and accelerated during COVID-19 don’t look like they’ve disappeared. They may have slowed down now.
There is no new abnormality anymore. This is the new normal. Every business will continue to get tech enabled and digitized. Now add on top of that the additional pivot of this new super tool called AI. Think of it as a new platform.
To sum it up, the consumer journey is not going away. Every business is a consumer business, and you will continue to digitise every part of the business. The cloud is an infrastructure. The consumer is a digital business transformation pivot. Then, we have just entered an age where you have a whole new set of capabilities that are being unlocked with AI that will accelerate this trifecta. They all blend into each other. One thing AI will do is definitely boost productivity. We are entering a whole new era or golden times for anybody who can enable this.
If I look at the competitive positioning of our industry compared to the global Tech landscape, we’ve slowly but surely become a fairly large portion of the global tech services. We have also good progress with Deep Tech and AI startups. We’re not a global SaaS powerhouse but a services one.
As far as we are concerned, we bet behind a cloud, cognitive, and consumer-like crazy last five years. Then we went behind cost takeout because if you can’t keep the customer efficient, you won’t have a good business model. It’s really about the scalability of the business model itself. Then only can I keep it more efficient.
The promise of AI in the ChatGPT era…
It presents a fundamental shift in the way things are being done. It’s an opportunity for us because nobody has done it before. When I’m competing, I’m competing against nobody. We are going through the down phase of the hype cycle. But eventually, it’ll come back. The same thing happened to cloud. The same thing happened to digital. Before Covid, nobody believed that true digital would happen.
Looking at early trends, one is software development. But software is still leading the world. AI may be a new trend, but software leading the world is already an existing trend. You could say now we’ve got a twin-engine jet of AI and software development. Things like testing will get even more efficient, which makes the whole dev cycle more efficient, which means you can write more code. No CIO kills the project for lack of requirements. Projects get killed for lack of funding. If you have enough funding, you write more code and build more things.
Then I think customer experience transformation is a big one. There are 58,000 banking agents answering phone calls with 30-20-10-minute wait times. That has been completely transformed. You really don’t need somebody answering the phone unless the complexity of the transaction is high. You can automate basic protocols. I think fundamentally, job losses will happen in that area, which is okay because there’s already an 80% attrition rate because nobody likes to be in the job. Nobody likes to be shouted at by the customer.
But companies must set up the data pipeline because there’s no AI without data. There’s no data without having a way to manage a single source of truth. Customer data is one part of it, but application data is also important. It’s a little bit foundational, what will happen in the next 1-2 years. AI is now like an arms race. We are trying to win this segment of customer experience and the contact center.
On emerging tech like Blockchain…
Blockchain will probably disappoint in the long run because it’s just too expensive to run. It’s never about cost at all but dollars per cost. The compute-infrastructure-energy for blockchain is too expensive.
But it does offer solutions. For example, you can use blockchain to automate record-keeping for real estate transactions. Metaverse got pushed out by a few years. Nobody knows what’s going to happen. Non-Fungible Token (NFT) has become Non-Valuable Token.
The bulk of the focus right now and from our customers is Cost-led transformation. I really need to get business to be more nimble and agile and complete my digital journey. My customer experience still isn’t where it needs to be. I don’t have the money to do it. My core system is still very old. I get 2 million malware attacks every year. How do I protect against that? It’s really become a very, very focused prioritised list of things that I really need to get through.
The importance of being agile…
As an industry, for the companies who keep innovating and those who keep adjusting to the new normal, the new abnormal—will benefit. I think it’s a tech-led mind. If you lean forward on Deep Tech and find a way to make it real for your customers, you’ll last in the long run.
Part of the proposition for us is creating net new talent in chosen areas where we think there will be demand and in the right place at the right price at the right time. The second part of the solution is problem-solving. We are engineers. Throw me a problem and I’ll solve the heck out of it. The third one is what has become more important today. Don’t wait for a problem to be solved. Can you help the customer think through what is the right problem to be solved?
Can India become a Tech and Economic Superpower by 2047?
I think we are making very rapid progress. I don’t think there’s a doubt it’ll happen. It might even happen before that. For example, right now we are 20% of IT global services, and by then we may be 40-50%. The biggest advantage we have, and we can’t lose that, is the talent ecosystem that we continue to build. A lot of it is built by our industry.
right now we are 20% of IT global services and by then we may be 40-50%. The biggest advantage we have, and we can’t lose that, is the talent ecosystem that we continue to build. A lot of it is built by our industry.
There is a lot of big education infrastructure that can be improved. I think we need to continue to invest in that. There is another infrastructure augment that is needed because we can’t just rely on a few cities like Bangalore, Pune, Hyderabad, etc. We need to identify the next 30 towns that can boom. Every country has to go through that. For example, it’s not just San Francisco but Denver, Phoenix, Colorado Springs, Dallas, etc. We must enable this tech superpower mindset. That is linked to core infrastructure, electricity infrastructure, data infrastructure, etc. It’s not just about mobile data. Airport connectivity is important to have access to global customers. They need to be able to come and see you. Employees need to go in and out.
Lots of things to do in the next 5-10 years, but we can accelerate it for sure, but it will happen anyway. It will not happen on its own, there are people working on it, and we are doing it.