 "iGATE plans major rejig, leaders will be accountable and responsibile: CEO Vemuri")
New Delhi: Moving towards a decentralised leadership model, IT services major iGATE today said it will give more freedom to its vertical heads to focus on markets like North America and Western Europe.
iGATE, whose former CEO Phaneesh Murthy was the face of the company during his tenure, is in the process of “finding leaders” to head its business in the US, the UK, Australia and countries in the Germanic, Nordic and Benelux region.
“We are developing a new organisational structure wherethe leaders will have responsibility and accountabilitytowards the clients, shareholders and employees,” iGATEPresident and CEO Ashok Vemuri told reporters in a videoconference.
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In August, Vemuri resigned as the head of North Americaregion at India’s second largest software firm Infosys to takeon as iGATE’s CEO following Murthy’s sacking.Murthy was sacked from the California-headquartered firmover an undisclosed relationship with a subordinate.
Vemuri said iGATE has entered into a credit agreement fora secured term loan facility of $360 million with DBS Bankand ING Bank, which will help the US-based company save about$105 million worth of interest over a period of five years.
The move will help iGate, which has over $ 700 millionin debt, to effectively reduce interest costs by 6 percent.
When prodded on recent top-level exits and restructuring,Vemuri said the firm is spending time in finding and groomingthe right leaders, which will take some time.“The people, who left, left for a whole host ofcombination of issues not just one. We will prioritiseaccording to the business needs and leaders will have to
Impact Shorts
More Shortsadjust to it,” he added.
He added that the structure will be nailed down in thenext few weeks.
According to reports, Sean Narayanan, the chief deliveryofficer of iGATE, submitted his resignation letter earlierthis month.
The new structure will see the creation of smaller industry-focused business units with independentresponsibilities with the heads focussing on consultancy,
delivery and sales.In the European region, iGATE would continue with thegeographical structure.
The company is also looking at exiting markets where ithad a “half-hearted” approach.
“Our biggest markets are North American and the WesternEuropean markets, where we have enough legs to derivesignificant returns. There are certain markets where we had ahalf-hearted effort. We will not scale those and there will beno initiative to seek more business,” he said.
Vemuri added that iGATE will continue to serve existingclients in these markets – Latin America, Africa, etc.
To ensure business continuity and tackling visa issues,iGate is expanding its near-shore delivery centre in Mexicoand Canada, as well as building delivery centre in Sweden.
The firm has also invested in setting up a globaltraining centre in Pune by the middle of 2014, which will takecare of software, process and leadership, Vemuri said.
Talking about its marketing plans, he said the firm willcontinue with its existing strategy, but the tone will be"reflective of the directional change."
Last year, iGate had launched a multi-million dollar adcampaign urging North American enterprises to shift theiroutsourcing model from an ’efforts’ based one to one based on’outcomes'.
Based on the changing requirements of businesses, Vemurisaid there is a need to move beyond iTops, a model popularisedby Murthy.
He said iGATE will assess the areas it needs to acquireafter moving to the new industry verticals-based structurebased on the gaps it finds.
When asked about the company’s hiring plans, Vemuri said:“We will ramp-up our recruitment. It will be fairlysubstantial.”
iGATE’s total headcount stood at over 28,200 at the endof the July-September quarter.
PTI
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