Nick Gill, Global Automotive Segment Leader, Capgemini

The global automotive segment leader of Capgemini, the seven billion euros consulting, technology and outsourcing major, speaks to Sandeep Belagajee on his company’s plans for India and the road ahead in a rapidly developing market.

Autocar Pro News DeskBy Autocar Pro News Desk calendar 26 Feb 2007 Views icon2512 Views Share - Share to Facebook Share to Twitter Share to LinkedIn Share to Whatsapp
Nick Gill, Global Automotive Segment Leader, Capgemini

Could you tell us a little bit about Capgemini?
We are a 7 billion euros company. The business traditionally has been consulting and business while strategy consulting would account for a quarter of our turnover . About 1.7 billion euros comes from manufacturing and a quarter (425 million euros) is pure automotive. We have had a strong automotive practice for a number of years and we work with most major players. About a half of our auto business comes from development and implementation of ERP and PLM systems.

Typically what are the areas you focus on?
We do projects in all areas of the automotive industry. The most exciting, however, is EEPDM (electrics and electronics project development and management). This is more relevant in luxury brands like Mercedes and BMW.The complexity of electrics and electronics in modern cars is so great that they are like IT systems. The joke is that there is more electronics in a BMW today than there was in the Apollo 11. We use our skills as an IT services company - like release management, configuration management and version control – and bring these into play in our automotive practice as well. The other area we are seeing a lot of growth is product development management (PDM) integration. There are so many solutions providers – such as SAP, Microsoft, HP, Siebel, Cisco Systems, Sun Microsystems, MatrixOne, PTC, and Carlisle & Company – working with the manufacturers. The question is how do you integrate this diverse software ecosystem into one whole? In the engineering and design area, we look at the manufacturing, supply chain and logistics angles. We have done a lot of work in supply chain management in terms of re-engineering it from a push to a pull model rather than designing it. We also look at order-to-delivery process for several companies.

What is the size of your India operation?
We have about 700 people here working on the automotive sector. We have a research lab here and our knowledge management centre is based in India as well. The profile so far has been low-cost, back-office projects. This is more or less stabilised, and now it is a question of setting the right systems and processes in place and let the cross-pollination of ideas begin. Then you will see them being involved in more front-end projects as well. In due course of time we will get people from our Indian practice to work with our clients outside India. They will bring that knowledge back and this will benefit not just the local market but will also allow India to develop into a centre of excellence for the global market. The numbers are already growing. Ten years ago, India was one percent of our total workforce, but today it is 15 percent and within two years we see this growing to 30 percent. Our Indian investment is an efficient way of managing our business better.

Can you give us a sense of what these ‘front-end’ projects might look like?
In the front-end sales and marketing areas, the focus over the last few years has been on customer relationship management (CRM). It is now changing from a marketing application to a sales application. Manufacturers and suppliers are starting to focus on their web strategies and we help with this. Typically, in the west, the dates when customers visit the dealer is closer and closer to the actual date of buying. Nowadays people go into dealerships only two weeks prior to purchase and at that stage customers have already narrowed down their choices. This is because most of the legwork gets done on the net and if your web strategy is not right, in terms of offering test drives, finance options, or model/colour availability, you have lost the customer. There is an interesting data which shows that dealers double their chances of completing a sale if they are able to respond to a customer query within 20 minutes of the query being generated. This would need a very robust back-end integration strategy, which we provide.

What has your experience in India been with respect to the quality of talent?
We have many Indians with very strong engineering skills working with us. In fact, among the BRIC nations, India seems to be producing the best engineers. I’ve been told that there is a talent crunch in the automotive industry. There is also the issue of training and retaining workforce. Traditionally, what we have found in the west is that the best talent came from the universities and colleges around the epicentre of automotive activity. But as technology changes and improves, you will find that the quality of manpower lags the demand curve in terms of skillsets. In the IT industry which we are part of, for example, we have some of the best talent coming out of India. The story could be different on the engineering side, but in the long run I think the situation will resolve itself on account of the fact that there will always be a steady stream of young graduates coming out of the universities and colleges. That is one of the advantages of being a young, populous country.

What is your reading of the automotive sector in India?
If you look at China and India, 20 years ago everybody was more or less reconciled to the idea that China would be a major economic power, whereas India was looked on as a bit of an underperformer. But look at it now and there’s a tremendous buzz about India. Now everybody is taking about the vast workforce with the right age and this really is an asset. There is tremendous depth in terms of engineering skills and the good thing is that, thanks to its vast population, there will always be more people being added to this workforce. As someone on the outside looking inside, I feel that growth is here to stay. That’s because there will always be regions within India that can fuel growth. Also, from a consumer point of view, India has just the right demographic. There is a piece of statistic which shows that almost 70 percent of the population is below 35. Extrapolate this against a growing economy, increasing per capita, low penetration of car and vehicle ownership and you are talking of a huge demand waiting to be fulfilled.

Do you see any issues that could curtail this growth?
Infrastructure could become an issue. Good roads are an absolute must for a robust car market, and I think that China, by investing earlier in basic infrastructure earlier than India has, is reaping the rewards for it. The infrastructure they put in place clearly supports the needs of the commercial and passenger vehicle industry. I’ve heard that India is making the same sort of investment in infrastructure, which is always welcome. And infrastructure is not about good roads alone. It includes railways, ports, electricity and telecommunication as well. India has had great success in telecommunication in just the last ten years. It already has very good IT infrastructure, and this is backed by the right resources in terms of men, material and education. The automotive industry is a key driver to the overall economic development of any country. I recently read a report which projected that some 35 million people will be employed by the automotive sector within the next ten years. Any investment that helps this sector tends to have a cascading effect on other sectors as well.

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