Sunday, 25th February 2018

Paul Spence, the Deputy General Manager of CAPGEMINI

Posted on 02. May, 2011 by in LEADERSHIP

Not many people can say “I have worked for one company during my 29 years of career.” Paul Spence, the Deputy General Manager of Capgemini, is one of those rare and lucky people. A Graduate of Wharton, long time on and off resident of Virginia, he has been relentlessly traveling the world and running business units for his company. He is often a guest speaker at many of the world’s most prestigious Universities providing his wisdom on Professional Technology Services. Currently Paul resides in the UK and Virginia. We caught up with him in London for the following conversation.

Residing in two countries, while working for a global company with 40 offices around the world, you must have more miles than George Clooney’s character in the movie “Up in the Air.” Do you have an airplane named after you yet? What do you do with all those miles?

No, no airplanes named after me. However, for those that have flown the London Heathrow to Paris Charles De Gaulle route as many times as I have, they will recognize the ‘Docklands’ plane. There are four primary users of my points: My wife Maria and I love to travel, so we do use them ourselves. Our oldest son Wes is a biologist and professional explorer, so upgrades are nice when he goes to remote places. My youngest son Ty loves his electronics, so he cashes them in for headphones, PDA’s, etc. and my mother-in-law Alicia splits time between her home country of Ecuador, US and UK, and she loves the upgrades!

You started out at an American, “partner” based, privately owned company, Ernst and Young and became part of a public French company, Capgemini after the acquisition. How is Capgemini different than the “original” Ernst and Young?

The biggest switch related to the obligations of public company reporting with 7 month forecasts and managing the markets on a quarterly basis, versus the more medium term management of a strategy and direction.

You are very familiar with China as right around the year 2000 you became the COO and then the CEO of Asia Pacific region for Capgemini living in Hong Kong. What is it like to live and do business in China?

In a word, exciting. The amount of growth going on, and thus the demands on a company such as Capgemini, are huge. In many cases, the economy has been able to leapfrog technology generations with the long term view they have to get things done. We all remember the very impressive opening ceremonies of the Beijing Olympics in 2008, with thousands of performers on the field, perfectly in sync. This is similar to business; when the government decides to develop a particular industry in a particular geography, everybody gets lined up and gets the job done.

Do your children speak Chinese? Would you encourage them to live and work in China?

Wes attended the British school there, and Ty the international school. Both have some basics around Mandarin (not Cantonese, the HK language of choice) and can recognize some characters. By no means are they fluent, however.

Should they want to live and work in China, it would be with huge support from my wife and I. In fact, for the 18th birthday of Tyler, he and several of his schoolmates went back to Hong Kong for the big rugby weekend festival called the Hong Kong Sevens. Both of them enjoyed their time there.

How can a company located in Metro DC area do business with China?

It is great that you consider Capgemini a Metro DC company, since this shows that we are living our vision of being a truly global company. While our stock is listing on the Paris Bourse as a CAC-40 company, we have 110,000 colleagues working in over 40 countries worldwide. Our focus is to take the best of technology innovation worldwide and adapt it to local needs through the use of local management.

You purchased a company in Brazil, established Capgemini’s operations in India and lived and worked in China. Basically you covered all countries in BRIC except for Russia. Why not Russia? Or should I say when in Russia?

When we look at the IT service markets today, combined with the compounded annual growth rates expected for the next five years, it becomes quite clear of the priority of our growth around Fast Growth Economies. Brazil is growing at 10% and is the largest IT market of those you referenced, thus our acquisition of CPM Braxis to become the largest Brazilian player in Brazil. China and India are next, then interestingly followed by Mexico before Russia.

Our clients, particularly those in consumer goods industries, need us to follow them and support them in Russia. We need to stay focused on not trying to open too many new geographies at one time, so our priorities are clear in the order in which we will go to each new economy.

Metro DC area is dominated by companies contracting with the Federal Government. How is business for Capgemini in the public sector? Do you anticipate harder times for growth with the looming budget cuts at all levels of public sector?

Capgemini has recently been awarded several major contracts with clients such as the USDA, U.S. Army and the Department of Homeland Security as a positive reinforcement that our global reputation for high quality, on-time delivery of major IT programs can be leveraged to support the success of major initiatives with our U.S. Government. Capgemini is also building a solid reputation for supporting key State programs such as the work we are doing to deliver modernized solutions for Unemployment Insurance which improves our ability to both manage the UI benefits process and ensure accuracy of information to eliminate fraud and error.

We established the Capgemini Government Solutions Business Unit, headquartered in Herndon in the middle of the last decade. Today we have over 120 and are planning for an additional 100 local jobs in the next 18 months. We also opened the Manassas data center last year, one of two new ones worldwide to join the other 28 we already had established. Therefore, since we are relatively new to the sector in this area, we see no boundaries to our growth.

Federal, state and local departments are looking for new players and new ideas that will allow them to absorb the budget cuts by delivering strong value for the ‘dollar’ and allow them to ultimately serve the citizen better.


You are very experienced in establishing offshore based services out of India and other cheaper locations around the world. Does the public sector use offshore resources today? Should they use it? Is it in the best interest of tax payers to reduce the cost of government expenses by leveraging offshore resources?

This is quite an emotive subject, as you can imagine. Some governments ban offshore based services completely, some place restrictions (Germany with no data shipped offshore) other governments (the Netherlands) embrace it.

While it could appear counter-intuitive, from a macro economic perspective offshore services is not synonomous with onshore job loss. There is natural replacement opportunity with retirement and attrition, which is high in the IT services industry. Additionally, by becoming more efficient on how services are provided to citizens, this allows an increase in discretionary spend that creates jobs in a macro environment.

Granted, at the individual level for the person who is being replaced, this is not an easy pill to swallow. However, this offshore movement is the trend in the IT industry, with India in particular becoming a hub for our industry, alongside Silicon Valley. This Indian migration has gone beyond the classic labour arbitrage of the 90’s and has become a true centre of technology innovation for our industry.


CAPGEMINI AT A GLANCE

Now 44 years old, Capgemini is headquartered in Paris, France and operates in 40 countries with around 110,000 people in North America, Europe, South America and the Asia Pacific region. Capgemini is Europe’s number one consulting company and it is widely considered one of the top 5 IT services and consulting companies worldwide. Since the acquisitions of Ernst & Young Consulting and Kanbay, the company has made major inroads into the US and Indian markets.


In the past, most American companies used UK or Ireland as their first foray into international markets. Today, Ireland is a basket case and the UK suffers from slow economic growth and budget cuts. Do you think that they still make sense as a beach head for American companies looking to expand internationally?

It really depends upon the sector. From a financial services perspective, London is one of, if not THE hub of the world. So yes, it could make sense depending upon the industry. However, when looking at companies that are focused on large consumer bases, difficult to overlook Brazil, China and India as primary expansion opportunities. The rapidly expanding middle class in each of these three countries far surpasses the entire population of many other countries around the world.

You work for a French company with headquarters in Paris. Why not live there?

Two major reasons: 1) I spend most of my time with clients, partners, and colleagues around the world, and Heathrow airport is one of the best to get to these places, and 2) After 4 intercontinental moves in the past 12 years, my wife has said we are done moving until retirement!

When away, what do you missed the most about the Metro DC area?

Many, many things…my friends in the Northern Virginia area who we only get to see once a year, my wife’s family in the area (I had to say that), the monuments during sunrise and sundown, the restaurant scene which is fantastic and as good as any city in the world, and further extended our home and friends in Wintergreen west of Charlottesville.

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