Hexaware Technologies CEO, Srikrishna aka Keech talks to Phil Fersht, CEO and Chief Analyst, HfS Research on the company’s exciting future outlook. Keech shares his perspectives on being disruptive with clients, by priding ourselves of knowing customer and breaking the silos between BPO and technology.
He shares his grand vision of digital labour, and the company’s growth strategy centred around automation, cloudification and transforming customer experiences. Keech concludes with his outlook for creating an industry for the generations to come. Listen to the recording.
Phil Fersht, CEO and Chief Analyst, HFS Research: Good morning Keech. It's great to connect with you again. It was great hearing from you as well at last summit in New York last week. But before we get into the business side. Can you share a little bit about your own personal history and how you ended up running things at Hexaware?
Keech, CEO, Hexaware: Sure. So, prior to Hexaware, just about 20 years I was at HCL. In HCL I joined as trainee, management trainee, and progressively to come more interesting roles. So a little over a decade, about 12 years prior to my leaving, I started what would then become a large global infrastructure outsourcing business.
But it started off quite modestly in 2000 or so, first in India and then in America started late 2002. So I came to that business and led it for them, for a little over a decade. Also, the last three years at HCL I also led their health care and life sciences business.
So between the two businesses, it was right around 45% of HCL's revenue. How I came to be in Hexaware really has two parts to it. One, I wanted to quit HCL, partly to join Hexaware. There were some overlaps, but there are some independent reasons as well.
For leaving HCL there was some what I felt were industry issues and then there were some personal issues. Personally, I want create a legacy. I want to create a legacy in an organization which if somebody looks back at it, in say 10-20 years from now.
It would be thought of as a company that Keech created. As successful as HCL is, I would never have that opportunity in HCL. It rightfully belongs to Shiv Nadar, who is the Founder, Owner and Chairman. So that was kind of motivation number one, is to work for an organization where I can create a legacy.
The second one really is the fact that I wanted to be CEO in early my 40s. I believe that the industry needs to become younger. Being young is not the important issue, I think the ability to keep up with changing technology is a real issue. The truth is I think that comes with being younger too. So, I really felt like the best shot at becoming a CEO in early 40s, not in late 40s, which is when the window for me to be a CEO at HCL would have opened.
The third issue is structural to the industry where I felt like even back when I quite, which was in early 2014, the industry had reached a point where there were going to be structure head winds for the larger players, for a decade or longer which would make it very hard for them to continue to grow the way they're done in the previous say 20 years.
They had grown for too long and created structures for too long, being a people-based delivery organization. From organizations of that size, it's going to be incredibly hard to make a pivot to a more technology based delivery organization.
So those were kind of all the reasons of why I decided to move away from HCL, although I was not actively looking but it was at the back of my mind.
Why Hexaware really for me? I thought it gave me an opportunity to create that legacy.
It had the right ownership structure. It was public, which was very important. It allows you to attract the right kind of talent. It allows you to be visible in the market. So being public was very important. But if you look at Indian IT industry, actually many Indian industries, but especially IT - A lot of companies even if they're public, still have a very concentrated family ownership. I wanted to work in an organization which is public and it wasn't a founder family type ownership structure. Which is then linked to kind of creating a legacy, but also in a shorter term basis, if you want to be a CEO, I think a you are able to be real CEO, where you have professional ownership. So Hexaware has kind of met that sweet spot of ownership, where a chunk was owned by PE firm, the rest was public, and the PE firm philosophy, and negotiated philosophy with them was clearly that they would stay away from running the company.
The last thing with Hexaware really was that, it was that as you put it somewhere else. It was small enough to be dangerous and large enough to be present or the other way round. It was the right size - not too small, that it is irrelevant and yet it had the size ability, client relationships, financial stability, all of which can be used as a solid platform to build a serious organization.
Phil: Okay, good stuff. So, as we think about where things are shifting, tell us a little bit about Hexaware. You were traditionally known for your HR tech capabilities from my perspective and some BPO work.
But you seem to have changed tack a lot in the last couple of years. You've talked a lot about automation and I've actually heard several clients, talk very positively about the capabilities of your company and enjoy working with you. So what is the grand plan?
Keech: Our grand plan ultimately is... firstly is that we want to be the first IT Service company in the world, where half our workforce is digital and I think you understand what I mean by digital workforce but to clarify, it does not mean we have half our workforce trained in digital technologies. We really mean half our workforce is machines. Half the work we do, it was done by humans, or in a different scenario would have been done by humans.
That's one kind of way of thinking about the grand vision, but that's not the end goal. Ultimately, automation or clarification are still a means to a larger end game. Which is transforming customer experiences. So, at this point and going forward, everything Hexaware does is defined by three themes ‘Automate everything, cloudify everything, transform customer experiences’. While recognizing that automating and cloudifying are steps to the journey of what is ultimately the Holy Grail, is transforming customer experiences.
Phil: Yeah. So I think you're about 600 Million in size. We talked a bit about being dangerous enough to go after some big deals, but also small enough to be nimble and disruptive.
What do you think that means in reality? Can you share some examples on how you're being disruptive with the clients, but also how you've been delivering the bread and butter work that's got you to this size as well?
Keech: Yeah. I'll give you three real facts from an internal perspective and some customer examples, maybe three client examples from different perspectives. So, the internal I think is probably very important.
In no particular order, first is that I and our leadership team pride ourselves on knowing customers. I personally would know at least for our top 30 yard customers, what their 3 year plans looks like? What is their 2018 priorities? That's very important knowledge that we incorporate as a collective team in our plan. So, when we decide what are our investments? Which technologies? Which areas are we going to invest in? It is not done in isolation, it is done in fairly seeped and in-depth knowledge of our individual customer priorities. I think being our size, allows us to do that.
The second internal thing is the fact that a lot of silos, which traditional organizations have, we've broken them. The biggest silo that's being broken as an example, is the silo between BPO and technology. Any organization that treat BPO as a BPO business, and what that means in many traditional organizations is that they treat BPO as a ‘step child’.
They think it’s the cost-centre fork, who do low-end, we are superior to them - that's the tech team’s thinking. We've broken that completely. So, our BPO and tech businesses are fully aligned, the person that leads automation thinking for BPO is our CTO, who is the same CTO for the IT organization. But there are many other silos that have broken. If you think of ‘cloudify everything’ or think of ‘transforming customer experiences’, the number of traditional IT horizontals that need to come together, to deliver those outcomes is very large. With transform customer experiences for us, each of our six horizontals contribute to that outcome. How do you bring it together? It's a lot easier for us to bring it together and manage some potential conflicts, credit issues, politics. All that is our rear view mirror and I think it's a lot harder for legacy organizations to do.
So how does this transcend then to clients? For the largest clients we tend to be, viewed from the lens primarily as a disruptor. So, we have a very large global bank, where we've just a done a recent contract where our role is essentially that of a digital resolver. So, essentially what that means is we're only the digital labour.
So, in their IT, we work with them in identifying what kinds of service request and incidents we think can be resolved digitally. That comes to our platform. If we fix it, we get paid for it. If we don't, it goes to their human resolver. That human resolvers are one of those traditional companies. So, essence we sit as the first layer of office. Which is the PR and there is a PR disruption ____ 00:14:40.
The more mid-sized organizations (and that mid-sized could vary from let's say a billion up to 8, 10 billion dollars in revenue), Then we're everything for them, but even here we're using automation as a basis for full outsourcing. Automation is not the only thing we do or cloudification is not the only thing we do; we use those to deliver better outsourcing.
There is a third example where and I will describe one such deal where the question of what do you work in a question. There is nothing obvious in how technology or automation can impact it. However, the clients said, hey, this is a painful but critical piece of work that is highly level intensive. We don't know if any automation can impact it. However, we want you to take a look at doing that work because we think in the long term, if there is somebody who can bring innovation to how it's going to work, it is most likely to be Hexaware.
Phil: Okay. So you mentioned earlier about your outlook for creating an industry for the generation coming up behind us. I've noticed personally, meeting with several of your Executives that you're bringing in a younger breed of leader for your firm with a lot of energy and passion and more of a mind set for the digital world, etc.
Is this a deliberate method? Are you trying to sort change the whole stuff, the image of global services future?
Keech: There are three things that are in common for all our Leadership. Young is not a target state, but it does wind up happening that way. But the target state is one of these three, actually it's all of these three. That's our collective leadership is all these three things together.
First is that we're all kind of at some point of times in life, in our past areas we were one degree separate. We all know each other, work well with each other. So when we got together in Hexaware, we didn't have a process of figuring out strengths, weaknesses, politics and stuff like that which meant that we jell very well as a team.
The second common thing is that everybody has built or run much larger businesses in much larger organizations. They’ve manage sometimes 20x scale from what they currently do.
The third thing in common they have is that they all share a common passion and a common vision, that a pure labour-based model that the traditional companies are so seeped in is not sustainable and that the next decade presents a big window of opportunity for companies like us to disrupt the space and become significant.
Phil: Okay. I think that's a very well articulated response. I think it's a very smart approach. So, one of the big outcomes from a New York summit last week was around emerging technologies like automation, machine learning, etc.
These aren't the end game, they're like a means to getting us from one place to another. What are these places in your view and what is the real end game fit for the clients these days?
Keech: I think the real end game is relatively simple. It is transforming customer experiences. Ultimately, I think on the day when you had the HfS summit, there was a survey about, "What are millennials? What are the brands that they like most?" Number five on that list was Amazon.
They were not even on the top four. Number one was Apple. I think number two was YouTube. Number five was Amazon and I think there was Uber there somewhere. The point is about why these brands most loved by millennials, because they deliver fabulous experience to anybody using them.
That experience is by design, obviously it is not by accident. To deliver such an experience, there is a lot of automation that needs to go behind it. If you think of a credit decision - if you want a home loan, the amount of time it takes for who is giving you that loan, to make the decision, is days and it's painful.
There is a lot of information that goes in. That information collection is somewhat automated, somewhat digitised. But after that it still goes through, who knows how many days for the underwriters to make the decision.
Imagine if a company could say, here is a form. to fill in and when you press submit, the next instant we're going to tell you whether you get a loan or not. Then after another instant, the money is in your bank potentially or with some settling agents bank.
For that level of customer experience to change, the amount of automation and straight through processing that needs to happen is immense. Frankly, I don't think you're going to go from say just picking 10 days, to make a decision on a home loan to deliver it instantly.
There maybe some born digital company that can do that, but the vast majority of existing organizations are going to go through the step by step. They're going to find ways to reduce the time from 10 days to 8 days, to 5 days to 10 hours and that's going to be the journey and technology is going to play an important part in making the journey happen, but outcome is always improving customer experience.
Phil: Okay. Thank you Keech. So, to finish up with. Can you just give us briefly what you think we're going to be talking about in three years? You've been in this industry a long time, you've seen a lot of change. You're looking at the pace we're moving at now, compared to a couple of years ago even. What do you think we're going to be talking about in three years? Which is getting out there a bit, but not too far to be complete science fiction.
Keech: Let me give you a couple of different perspectives. I'll talk about how from service providers how our organizations will look and feel. I'll also tell you from a technology perspective around the themes we are talking about, what I think could be most important.
In three years, we would have begun to mainstream and conquer in millennia. A lot of simpler use cases, very complex firms will still remain ahead of us. But will also then begin to see this immense train of blockchain.
I think blockchain has a means to solve complex problems, by not trying to insert a machine into what a human was doing, but to do something completely differently, establishing level of credit as an example.
Today there is a human that looks at 20 conditions in a letter of credit and makes a decision whether or not to negotiate the claimants payment. You can replace that human's decision making, by AML, that's one bit to solve the problem.
But what blockchain can do is to completely replace the need for human decision making at all. I think blockchain will become pervasive in the three to seven year timeline. So certainly in three years I think that will be one of the most critical things will be talking about.
Phil: Yeah. I think blockchain has brought in a new concept that could be as impactful as the Internet itself. When you look at permission less blockchain, it's almost like TCP/IP right. Then permission to blockchain could evolve like the cloud.
I mean the potential is enormous. There are some obstacles like GDPR, there are some struggles with right to privacy and things. But there are so many areas where the potential is huge and I think your comments around automation and blockchain emergence, could be very, very impactful in the future.
I also think security is going to raise its head a lot more. That was a big discussion we had last week. I think there are going to be some issues and some privacy issues that pop up. They're going to be very challenging for us. So, I have one final question Keech. How did you get the name Keech? Does it mean anything special or is it just a nickname?
Keech: It's a nickname that came from a very popular Tamil movie, which was there 35 years ago. When I was a school kid and there was a school kid in that movie called Krishna, whose nickname was Keech, so it stuck.
Phil: Very simple. Good. This has been a great discussion. It's very good to hear your views very well articulated and I enjoyed it very much. I'll send you down a copy of this in a few days time and hopefully we can get together again very soon.
I get to New York quite a lot, hopefully you travel through London occasionally as well. So, I look forward to maybe getting together again.
Keech: I absolutely look forward to that Phil and yes, I do get to London very often. So, I look forward to that.
Phil: Wonderful. Have a great week and chat again soon.
Keech: Yes. Thank you.
Phil: Bye, bye.