Inside The Leader's Mind with Rohit Anand, CFO, Tech Mahindra

A lot of people think that CFOs put a very tight guard rail on. I was quite reactive and the word I learned it's an environment of perma crisis.

Yeah, lovely to be here.

Yeah, I think you have to look at it holistically, step back a little bit and look at technology industry for the last 20, 25 years. It's always evolved, right? It's evolved from changes in technology when Y2K started to when the internet bubble came in to cloud robotic process automation. There's been different transformation from a technology standpoint that has come in and most areas, the IT services firms have benefited out of it. Now from an AI perspective, the hypothesis is that AI will bring a lot of productivity for IT services, which is a good thing because you can do same amount of work with less resources. The input to output ratio changes, but the other question, and which is why there's a lot of pressure on the stocks for all IT companies, is that would mean that traditional model of IT services value goes down dramatically, right? So if you look at it, the way at least we've seen it and we've seen the technology, it's going to be a supplemental tool to help aid IT services company and will accelerate the digital transformation for the global enterprise where IT services will play a meaningful role in contributing to that change, right? So I think what it means is we need to be ready for that growth that will come in front of us, and for us to be ready for the growth means investments, right? Where are we going to invest? And to your point, are we just going to invest for the sake of investing? So I think it's very important to distinguish what really makes sense for us to be ready for the growth. And between the senior management team, the board, we have a regular discussion on that and we assess how the market is moving. We continuously look at the opportunities for investment for us, be it organic, be it organically growing our business through technology investments in people, in tools, right? All of that is constantly validated. And with that, we have a very strong and robust mechanism where between the CEO office, CTO, with my intervention, we regularly look at all the options where we're going to invest and we prioritize what we think makes sense. And then of course keep on revisiting given it's a dynamic world and technology is moving fast. Keep on revisiting that on a regular basis. That's kind of the way we operate right now. And we're very clear that we just don't want to invest dollars with the view of just showing investments. We want to make sure that every investment, every dollar that we put gives us the right return. And of course, since the technology is changing, you would have to take certain bets and certain moves that might not work, but as long as those are well measured, evaluated, and constantly debated, it makes sense for us. So I think that's the process we run and we're very comfortable with the way we're looking at investing in the technology and people.

Yes, that's right.

Yeah, I think it's a very volatile world, right? It's volatile and the word I learned a year and a half back, it's an environment of perma crisis, you know, permanent you're in a crisis mode. So it's either geopolitical or macroeconomic or technology disruptions. So permanently it's crisis situation. So then how do you think about leadership in a perma crisis mode? It's very important to understand how do you balance any of these aspects. So from our side, we constantly engage with the senior management team. We prioritize what is important for us. As you know, we shared a three-year plan for Tech Mahindra in April 2024, which was internally shared as well as known externally to the public, right? So it was one plan that was managed between internal and external stakeholders. And with that, at least it became clear where are we heading, right? That was the goal setting that we did for the entire organization. With that, we've had constant catchups, meetings, sessions with the senior management team in different forums that we've set up, either at staff or moed staff that we do, or even senior management including functional teams, so that we can continuously debate and pass on the priorities that people can balance on. Otherwise, it's very important to get mixed up and drive the wrong lever where it's really not something we're looking for. So I think that constant communication, that constant dialogue is very important, which is what we've been doing. And having a clear goal post, this year is very clear: we have to get to 15% operating margin or the EBIT number, we have to be higher than industry average growth on top line, right? So if we have to do that, the message was really relayed in the first blaze session that we did at the beginning of the year in April with the entire leadership team and the sales organization. So the message is very clear with everybody what is the priority, where are we going to head, and then wherever there's a conflicting priority, there's a forum and a session which we regularly discuss those decisions. I mean, all the deals are discussed in a deal review forum that happens thrice a week between Atul and me, and anywhere where there's a disagreement or we need to take a call which is a tough one, we obviously escalate and go to MO for a decision, right? But usually these processes and the system we've set up is working really well for everybody to be clear what the priority is and decision making is channeling appropriately through those sessions.

Okay.

Data-driven decisions.

Sustainable growth.