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CNBC Transcript: Keshav Murugesh, Group CEO, WNS

Below is the transcript of a CNBC interview with Keshav Murugesh, Group CEO, WNS. The interview played out in CNBC's latest episode of Managing Asia on 12 June 2020, 5.30PM SG/HK (in APAC).  If you choose to use anything, please attribute to CNBC and Christine Tan.

Christine Tan (CT): Now in your 30 years in the BPO and BPM industry, when you see the scale of disruption that's happening across many industries because of the pandemic, have you seen anything of this kind?

Keshav Murugesh (KM): Christine, no, never at all. I must say that for me, this is a Supernova moment. This is a particular moment where overnight our business models have changed. Every business model has become a virtual model. In fact, as compared to what Tom Friedman said in 2007 when he defined Supernova, I think what we are undergoing is 2 times of the Supernova, because this is a pandemic that is happening at the same time across the world. While all of this is happening, not only do we have to make sure that we are delivering business continuity to every one of our clients, but at the same time, we are also focusing very strongly on making sure that our employees are safe globally.  So, very interesting times.

CT: Is it true you helped to orchestrate the movement of some 2.5 million laptops and desktops from offices to homes?

KM: Yes, Christine. You know, this was a complex situation. In India, as you know, 65 percent of WNS's 44,000 employees actually work. Therefore, what we have to do was to first and foremost, create safety protocols for everyone and for employees, then behind the scenes, start working with the Government in terms of, first of all, ensuring that we were declared an essential service; thereafter, working on risk mitigation strategies with every one of our employees, then start the logistical work of moving large numbers of desktops. For us, it was 28,000 desktops in India. But for the industry in India, it was actually moving close to 3 to 3.5 million desktops to homes. I can tell you in a week we had done it extremely well. In fact, a third party HFS did a deep dive analysis, said that we had actually responded admirably. In a week, we had already moved 92 percent of desktops home, and WNS itself is proud to say we had already moved 100 percent of desktops home. So, lots of coordination, lots of work behind the scenes and lots of digital kind of assets coming into play.

CT: Correct me if I'm wrong, Keshav, but these computers that you move, they contain highly-sensitive information of your clients. What was involved trying to protect? What was the security behind it involved in the shift?

KM: Interestingly, Christine, first of all, I must say that what we actually do is to run very complex business processes for clients across the globe, whether they are indeed BFSI segment or healthcare segment, logistics, airlines, travel or whatever you're familiar with. But the reality is, one of the beautiful things of what we do is we never actually transferred the information onto the desktops in India or anyone of our locations. We actually work on the information line with them on their servers, leveraging Citrix technology and other technology as well. But for us, when we moved these desktops, it meant we had to loosen some of the controls. It meant we had to reach into discussions with every one of our clients, helped them understand what the nature of the change was going to be, co-created work from home solutions with them, and then once the desktops reached home and were lit up, we then tightened all those controls, including cyber security controls. While we worked very partner-like in the short term with them in terms of allowing them relaxations in terms of payment terms, in terms of some short-term discounts and in terms of also just making sure that we were not overbearing in terms of contracts, they worked with us also to make sure that some of these requirements, particularly around operational risk and cyber risk, were jointly handled. As a result of which, lights went on. We have had no issues at all. In fact, I would say that since we have delivered this model very successfully.

CT: Have you had to deal with any infections among your staff so far?

KM: With 44,000 people across the globe, you have to expect that there will be some. So, yes, we have had a few people who reported sick with Covid. But I'm really delighted to say that all of them have recovered and have recovered very well.

CT: The pandemic itself has impacted your fourth quarter revenue ending March, and for fiscal 2021, you've actually announced there'll be further financial impact. So, you've decided not to issue any annual guidance. At what point, do you hope to get some visibility?

KM: If one looks at the current situation, actually it's a pause for the business, because if you look at WNS numbers coming into April, we're actually coming in with a very strong financial year, FY2020. The last fifteen days of the quarter had some impact because of the pandemic. But overall, for four years now, WNS has delivered double digit growth rates, very strong profitability. Just prior to the pandemic, our stock price was again at a lifetime high of $75. So, at this point in time, if you just look at global business, you know, you will soon realize that hardly any planes are flying, any hotels are opened, any cruise lines are operating. Therefore, the ability for us to recover from the current situation is very high. So, I actually think that at this point in time, global business is just focused on managing the pandemic, making sure that essential services are available to citizens across the globe. Over the next few months, as we are able to deal with all of this and volumes start increasing, this particular pause that WNS is seeing will transform to one of significant growth. I'm absolutely certain that when we come out of this over the next few months, it will be very positive. But I can't predict how long this pandemic will go on for.

CT: So, in short, you will be profitable this fiscal 2021? You are confident of that?

KM: We expect to be, yes.

CT: You've also deferred promotions, increments, what's the likelihood of you having to lay off staff?

KM: First thing I must mention is very recently we actually paid out bonuses for last year to all other employees. So, that's the good news. For the short term, we've said we will defer some of these things like increments and the promotions. Right now, our focus is to hold on to all our people, avoid any kind of reductions in compensations, at least for the medium term, and just play those out for some time. I don't expect at this point in time that there would be reductions. We may not be hiring new people, at least in the short term. But I don't think that we will want to waste this crisis. We will want to make the most of it by leveraging great people who have served us over the years.

CT: As CEO of one of the leading BPM companies listed on the New York Stock Exchange, how do you see the recovery? What sort of business scenarios have you planned out?

KM: At this point in time, the worst is more or less behind us. We are starting to see countries wanting to open up. We're starting to see companies start taking baby steps. We've seen China actually now get aggressive in terms of the supply chain - the ports opening up and forcing other ports to open up as well. So, we actually think that this pandemic while it will create short term problems for the world because unemployment across the globe will increase in the short term, it will also enable us to, first and foremost, hire new qualified people near shore and on shore to blend into our business model. But overall, the demand for services will continue to be strong, essentially, because every client who has dipped their toes in the model will want to save more, will want to transform that business models with a digital acceleration, will want to test new operating models with us. Anyone who has not tested this model till now will now appreciate how well companies like WNS actually manage such a global crisis and will therefore want to be our partners and create a very strong and resilient program for themselves long term.

CT: So, gut feel, by the end of the year, do you think we'll see a recovery?

KM: I think so. I'm a bull, Christine. I think this year is a difficult year, but thereafter, the world will not be the same. Things will change. People will come back. People will start spending. Planes will start flying again. We will have you know some kind of a vaccine for this particular disease. Humankind has always been very resilient and will continue to be so.

CT: You've recently just stepped down as Chairman of Nasscom, India's tech association. How do you see this pandemic transforming India's I.T. and tech industry?

KM: The way the Indian tech industry came back with the pandemic has been amazing. You know the industry body Nasscom that I led till recently has done a fabulous job in terms of working with the Government, over-communicating with the clients across the globe and making sure that work from home has been very successfully implemented across the whole of India. I actually think that the investments we are making in terms of helping the government itself, in terms of managing the pandemic in India with new technology-based solutions is being received very well. The Prime Minister himself recently tweeted about how important Indian I.T. and BPM business was for the country and what support he would continue to provide this business. Overall, I think the investments we're making in technology and digital will continue to make sure that India continues to be the leading light in terms of technology businesses and keeping the lights on and transforming global businesses across the foreseeable future. So, I'm very positive about the impact of India, tech, people and India's resources.

CT: What will the new normal look like post-COVID? What will BPO and BPM demand look like?

KM: Digital acceleration. It would be all about new models of engagement. It will be all about making sure that - managing safety of your employees as well as keeping the lights on are enmeshed together. It will also mean higher levels of cyber security.

CT: Finally, Keshav, your leadership is now being tested during this time. How will you lead WNS and your 44,000 global employees out of this crisis?

KM: I think the future of business models will ensure that every leader has to be focused on turning around - lead with models of resilience, making sure that there is solid resolve; and more importantly, making sure that you are all the time reinventing yourself and your company and driving profitability and great culture in your company. That's what I'll be focused on as well.


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