Hyperlocal campus might be the norm going forward: CEO Tiger Tyagarajan on the Future of Work

You saw strong growth and robust deal wins in a pandemic year. What were the key drivers?

I would start by saying that clearly one of the many changes COVID has driven, is the exponential trajectory that digital transformation has taken in every industry and every client. Digital is a combination of cloud, moving online, analytics and data. As a result, we are drawn more and more into conversations with all our clients on helping them transform their businesses, leveraging digital technologies.

Is this growth momentum sustainable in the post-vaccination world?

I think it is sustainable. All (digital transformation) trends that were happening have got accelerated. Now there is no option. I know there's a discussion of all of this happening before the pandemic, and it will go away. There's no such thing as going away. Why would anyone reverse from the cloud down to on-premise? Now, why would anyone say you know, let's go back to offline? If 20 percent of my business is online, they are going to try and make it 30 percent. So, these are clearly sustainable trends.

There has been a lot of talk about outcome-based pricing, which has become a key theme since the pandemic. 

We have been working on outcome-based pricing for quite some time now. I think we've been accelerating that for some time, but it still only about maybe 20-25 percent of the company, where revenues are not people-based. And we see that increasing as we go forward. The more we use digital technologies, like as-a-service based services, the more you get paid on output or value of output delivered.

Do you see outcome-based pricing accounting for a larger share of business going forward? If so, could you say by when do you see reaching 50 percent range?

I think it will be a medium- to long-term journey because we have long-term contracts with our clients. So, they don't change overnight. As some of those contracts get renewed, we will have those discussions at that time.

And, I see that moving from the 25 percent mark to the 50 percent mark over time, but it will take time. Our clients like it because our alignment of goals is good.

Now coming to the hybrid delivery model, how do you see it evolving for the company?

When you look at the way work is done, it is no longer about coming to campus. This notion of the campus is gone. Now does that mean office work is gone? No, there'll be office work, maybe half the work is in the office and half the work is virtual. That doesn't mean half the people will be in the office and half the people will be, you know, working from home. So, all kinds of permutations and combinations are going to be possible.

Are you planning to give up some of your real estate in the hybrid work model?

Real estate investments are long-term investments, including leases. Most of our real estate is leased. We don't (own real estate) because we think it creates inflexibility. And I think the pandemic has shown that. I'm sure over time, we will consolidate real estate, and find the right real estate footprint.

For example, instead of having five buildings in the National Capital Region (NCR) where we have operations, we might have 25 locations in the NCR but all of them much smaller and spread out so that people who are working from home can come into the office. The office can only accommodate at any given point up to, say 100 people. And by rotation, people nearby come and use the office every week. So the travel time goes from one and a half hours to 15 minutes.

Over time, I think between us and our clients, we will come to a good understanding of our overall portfolio of 100,000 people on what is the right architecture that we need to create and build in order to be able to deliver services.