Mindtree rejigs strategy to eye large deals, tap vendor consolidation opportunity

Mid-sized IT services provider Mindtree is tapping into the growing vendor consolidation opportunity, as it rejigs its strategy to scale its business in a scenario where global clients are spending more on technology.

The firm will be focusing on service lines such as customer success, data and intelligence, Cloud and Enterprise IT, where businesses are investing as they look to either survive or rebuild amid the Covid-19 pandemic.

“We have done a reorganisation and said that if we can build capabilities and align them in these areas, we can handle a client end-to-end,” Debashis Chatterjee, CEO of Mindtree told ET. “If I don’t do end-to-end, then I will lose out on those deals.”

Mindtree has studied client buying patterns and how they are transforming their businesses, and when clients think of consolidation, the company “will have a firm seat on the table,” he said.

Chatterjee, a former Cognizant executive, took charge in August 2019 after Larson & Toubro bought majority stake in the Bengaluru-based IT services firm.

Since then, he has added people, rationalised small accounts and focused on mining existing clients and chasing big deals.

In the quarter ended June 30, Mindtree received a revenue boost from Microsoft, its largest client, as it helped users across the world adopt video conferencing tools in the face of the virus outbreak.

Microsoft contributed 30% to Mindtree’s $253.2 million revenue in the first quarter.

Mindtree’s revenue from retail, travel and the hospitality vertical collapsed due to the business slump among hotels and airlines in the quarter. It currently has 292 active clients against 365 a year ago.

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“We are adding new clients, but more strategic clients,” he said.

Six new clients came on board in the June quarter, which fits into its new strategic roadmap.

The challenge, Chatterjee added, was that the decision-making cycle had become slower.

It was discussing many deals that align with its new service line strategy, with a larger number of clients talking about doing more end-to-end work.

Chatterjee has strengthened the leadership team at Mindtree amid exits.

A senior executive from Accenture has been appointed as chief operating officer and a former KPIT executive as its chief financial officer.

“I might need one more quarter to fill in the gaps. If the service line strategy works, we will be hiring people and (be) doubling down in Europe,” he said.



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