GECIS: "I do not want to worry about IPO today"

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What prompted GE to get out Gecis-the official version?
We had come here to build up a lot of necessary skills for GE. Lot of it was because there was nobody else here. Over the years, we have created some value, obviously helped the industry grow, but at the same time, we were seeing lots of external customer demand. Everybody wanted to see our facilities, wanted to know how we had done it. And from a strategic perspective, this is not GE's core business. GE does not want to be in this business. GE will continue to outsource to us and to others.

But there was a need to look at the best way forward. There were three key imperatives. One, we wanted to preserve the operating excellence that we delivered to GE. Two, we asked ourselves: is there a way we can capture some of the value that has been created. And finally, how you can position it (Gecis) for the growth in the future.

Pramod Bhasin, CEO Gecis, on the changes in his company

We evaluated various options, went through a lot of exercise, and talked to a lot of people, strategic as well as the financial investors, and ended with this structure, where GE continues to own 40 percent, the single biggest shareholder. We have a long-term contract with them and that helps to get business while providing some stability. Our new investors understand this area very well and can provide guidance on how to grow from here.

I feel, being purely a captive, after a while-not now, maybe after three years-you have to think about competitive edge, you have to think about management, you have to think about what is going to happen to the organization. In all captives, growth slows at some point of time. That is something that you have to deal with at some time. We just wanted to deal with it before it became a problem.

Why not a strategic investor? Was there disagreement in valuation?
I think we could have got more from strategic investors. There was a lot of interest from strategic investors. But this is the best ownership structure that we could think of that met all the three objectives.

With strategic investors, the fear is that; will this be the backoffice of another company? Instead of GE, it will be the back office of some othe company. Or will it be a real business, with scope for future value creation?
Valuation was never an issue. It was always a strategic discussion.

How different is it now-on the ground?
There is a lot of excitement here. We all believed we built something unique. The range and depth of high value processes that we have is unmatched. We just wanted to go out and leverage that. On the other side, we know there are a lot of challenges-gearing up for commercial proposition, building a marketing/sales front-end team....

Then, there is the culture. There is too much of GE speak. Any company has its own language. When, we go out and get external customers, we have to get out of the habit of that language. At the same time, many customers come, because we have the GE DNA embedded in us.

You must have set yourself some targets?
The only real target that I would like to set for ourselves is to reach a billion dollar of revenues in 2007 or 2008. The other target we have set for ourselves is simpler. We want to have really strong global delivery capability. We already have 25 percent of people outside India. We need to find new locations. And we will do it. So, in real terms, it (the target) is reaching the billion dollar revenue mark in next three to four years time frame. Some will be organic; some will be acquisitions. Some will be joint ventures and alliances.

Any target in terms of non-GE revenue?
Today, almost 95 percent comes from GE. Over two to three years, it will be 20�25 percent. GE will also increase, but by about 10�15 percent annually. Others will grow much faster. So, to answer your question-by 2006 end, 25 percent of the revenue should be non-GE. I will certainly like that to happen.

These are all internal targets. Any targets in comparative terms, in relation to others, to the market? Globally?
We want to be the biggest offshore BPO company. And we are, already. We would like to remain so. But what is more important to me-and I am very clear about that-is in the processes that we get into, the products that we service, we must be the best.

In terms of global scale, you know companies like Accenture are much bigger. But I do not see why we would not be growing at the same rate as say an Infosys or a Wipro.

We will continue to be the first in going to new locations. We want to maintain the leadership that we have built in India, China, Hungary in newer locations. We will continue to maintain our leadership in global delivery.

Sorry for being a little impolite. That statement about discovering newer locations would have sounded a lot more credible, had it come from GE. That company has grown by managing economic change, responding to global change faster than anyone else, and inducing that change many times. But I am now talking to Gecis, an independent company majority owned by private equity funds....
I know that. But GE is still our biggest investor. We will still leverage GE's strength. They sit in our board. We will go to them and other investors whenever we need contacts, expertise, guidance. We have access to all that resource, even today. Our other equity investors are also big companies, with a lot of depth.

As an independent company, how will a new investment decision be taken? You must worry about, as they say, matching the quarter-se-quarter-tak (QSQT) expectation. You have to go for an IPO....
Not today, I do not want to match that QSQT expectation today. IPO will happen at some point of time. We will figure it out. I do not want to worry about it today. Now, my focus is revenue with profitability. Rest will follow. We will evaluate that option three years from now.

But managing growth in a smaller company is different than that in say GE...
Yes, you have asked the right question. Managing growth is our issue. In fact, it is the real issue. And that is what I have told my entire team. How do you reach 5000 in China? 25,000 in India? 3000 in Hungary?

In terms of quality, even my competitors would agree, we are way ahead. We have to grow, with the same quality standard being maintained.

Will we have issues? Yes.

Will everything go smoothly? Absolutely not.

Will we have problems? 100 percent.

The only thing I can tell you is that we are better equipped to meet these challenges than most others.

What about money for that growth?
We make good money, well above 15�20 percent. I cannot give you the exact figures. But it is well above that. Also, we have strong investors. We may turn to them, if we require big money for say an acquisition.

But changing from the captive mindset would be tough....
From a cultural point of view, yes we have some challenges. But from business point of view, we have always operated like a commercial organization. We have never operated like a cost plus center. GE is a very tough customer.

Shyamanuja Das