{"id":135021,"date":"2023-10-07T09:39:13","date_gmt":"2023-10-07T09:39:13","guid":{"rendered":"https:\/\/allmybiznews.com\/?p=135021"},"modified":"2023-10-07T09:39:13","modified_gmt":"2023-10-07T09:39:13","slug":"genpact-ceo-we-are-investing-600-million-over-three-years-in-ai","status":"publish","type":"post","link":"https:\/\/allmybiznews.com\/business\/genpact-ceo-we-are-investing-600-million-over-three-years-in-ai\/","title":{"rendered":"Genpact CEO: ‘We are investing $600 million over three years in AI’"},"content":{"rendered":"
‘AI is not a new thing for us. We started our AI journey in 2015.’<\/strong><\/p>\n Genpact is sharpening its focus on generative artificial intelligence (GenAI).<\/p>\n 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<\/strong>, chief executive officer (CEO), Genpact.<\/p>\n NYSE-listed Genpact has more than 115,000 employees, majority of whom are based in India.<\/p>\n In an interview with Ayushman Baruah<\/strong>\/Business Standard<\/em>, Tyagarajan talks about the investments in GenAI, acquisition strategy, and the technology spend environment.<\/p>\n Genpact is investing $600 million in AI over three years. Could you explain where and how this investment will take place?<\/strong><\/p>\n Yes, we talked about it in our second quarter earnings call.<\/p>\n We are investing approximately $600 million over three years in AI.<\/p>\n This would broadly come under three buckets. First is research and development (R&D) spend to build solutions.<\/p>\n The second bucket is capital allocation used for acquisitions.<\/p>\n 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.<\/p>\n The third bucket is the investment on training because we cannot do the first two without this one.<\/p>\n How is Genpact using GenAI, both from a client and internal usage perspective?<\/strong><\/p>\n We approach GenAI exactly the way you said it — for our customers as well as internally.<\/p>\n We do new work with our customers as well as use GenAI in existing projects.<\/p>\n First, AI is not a new thing for us. We started our AI journey in 2015.<\/p>\n Since then, we have focussed on AI and machine learning (ML) as well as large language models.<\/p>\n In those days, we called them natural language generation or natural language processing.<\/p>\n So, we have incorporated those into our solutions for many years now.<\/p>\n What we are now doing is obviously incorporating GPT 3.5 and 4.0.<\/p>\n We have a use case where we do a competitive analysis for an automotive customer.<\/p>\n The team used to produce an analysis report every Friday.<\/p>\n Now, we have done pilots where we have used GenAI to pull and synthesise the data to produce the report.<\/p>\n Now, we can give the customer a report every day instead of every Friday.<\/p>\n We are doing it for 100 models of cars across 100 markets because we have the capacity to do that.<\/p>\n Internally, we are working on many use cases.<\/p>\n Probably, the most important one will be in training our people faster.<\/p>\n 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.<\/p>\n Within two weeks, the person can start doing transactions.<\/p>\n <\/p>\n What is your mergers and acquisitions (M&A) strategy and are there any acquisitions in the pipeline?<\/strong><\/p>\n Our acquisitions are driven by our strategy. And, our strategy clearly lays out a set of industry focus areas, geographic markets, and services.<\/p>\n Our acquisitions have always been to add capabilities in those areas.<\/p>\n For example, in 2018, we acquired Barkawi Management Consultants as supply chain was a big focus area for us then.<\/p>\n So, our acquisitions continue to complement the areas of focus in our business.<\/p>\n Emerging services like supply chain, sales and commercial services, financial crimes & risk, are three examples.<\/p>\n 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).<\/p>\n Data and analytics is a horizontal that cuts across all these technologies.<\/p>\n In 2016, we acquired Israel-based PNMsoft that gave us a no-code, low-code workflow on Cloud.<\/p>\n Our acquisition of Enquero gave us a technology called PowerMe, a data intelligence platform.<\/p>\n Acquisitions must make sense from a financial, strategic, and cultural standpoint.<\/p>\n <\/p>\n With a slowdown in the global economy, do you see a cut in technology budget, especially in BFSI?<\/strong><\/p>\n Yes, without doubt, not just in BFSI but in many sectors.<\/p>\n 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.<\/p>\n This trend is likely to continue. Clients are asking why we are spending this money.<\/p>\n We cannot say that we will offer you some big benefit in three years.<\/p>\n 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.<\/p>\n