Mphasis Taps Ex-Syntel CEO Nitin Rakesh As Next Chief Executive To Drive Digital, Automation Growth

Mphasis has made former Syntel CEO Nitin Rakesh its next chief executive to supercharge the company's digital transformation plans in the banking, financial services and insurance sectors.

The Bangalore, India-based solution provider said Rakesh will replace Ganesh Ayyar, who spent eight years as CEO of the $895 million company, with Rakesh formally taking over Sunday. Mphasis said it was impressed by Rakesh's track record of launching innovative service offerings in areas such as automation, and founding one of the industry's fastest-growing business process outsourcing practices.

"Mphasis hopes to gain from Nitin's vast experience, strong customer orientation and deep insights in the areas of new emerging technologies such as digital and automation," Davinder Singh Brar, Mphasis' chairman of the board, said in a statement. "He has held key leadership roles, scripting numerous success stories and we hope that under his leadership, Mphasis will reach newer heights."

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Ayyar steered Mphasis through Hewlett Packard Enterprise’s sale of a controlling stake in the company to private equity giant Blackstone Group. Mphasis saw double-digit declines in its HPE business in its final three years of ownership, Ayyar told CRN in May, although HPE has committed to spending nearly $1 billion with Mphasis over the next half-decade.

"We thank Ganesh Ayyar for building a customer-centric culture, a great management team, and a fast-growing Direct Core business," Amit Dixit, Mphasis director and co-head of Blackstone Private Equity in India, said in a statement. "We wish him the very best as he transitions his role to Nitin."

Rakesh served as CEO of Troy, Mich.-based Syntel, No. 38 on the CRN Solution Provider 500, from April 2014 to October 2016 and resigned due to "a personal decision on his part," a source familiar with the situation told CRN. When Rakesh left, Syntel's stock was trading at its lowest price in more than six years due in part to a $15 special dividend issued earlier that month.

Rakesh told investors in October that the uncertainty around global markets and industry segments resulted in longer-than-normal decision cycles on discretionary spending, delayed project starts, and slower-than-anticipated project ramps for Syntel. He singled out a lack of policy clarity in key banking and financial services markets as a driver of volatility in customer investment plans.

Rakesh's first stint at Syntel lasted from 2002 to 2008, during which time he founded the company's business process outsourcing practice and built it into a significant revenue contributor. After four years as CEO of a financial services company focused on exchange-traded funds, he returned to Syntel in September 2012 as president of its Americas operations, responsible for near-shoring efforts, and was promoted to the CEO and president role 19 months later.

Rakesh was not immediately available for comment Friday. Mphasis' stock was up 4.2 percent in trading Friday to $8.25 per share.

"I am very excited to take on the leadership of Mphasis," Rakesh said in a statement. "I am most enthused about the company's unique positioning and strong customer base and hope to capitalize on the opportunity offered by adoption of digital transformation."

Mphasis' headcount has fallen in recent years from 30,000 to 23,500 as the company leverages automation to supersize its revenue per employee, Dinesh Venugopal, Mphasis' president of digital and strategic communications, told CRN in July. Venugopal said the offshoring industry will encounter significant disruption over the next three to five years as clients push automation to cut labor costs.

"Automation is going to reduce the human effort required to do the work that's being done today," Venugopal said. "That entire [offshoring] value proposition is under threat and disruption."

Mphasis has invested in automation for the past 18 months and is starting to gain lots of traction in the financial services sector, Venugopal said, particularly around fraud detection.

"We're working at all ends of the spectrum, but at different levels of involvement," Venugopal said. "It's not a simple transformation."

Mphasis derives three-quarters of its revenue and employs 5,000 people in the U.S. including all of its go-to-market solutions teams. Venugopal said the company continues to believe and bet heavily in the U.S. market.

"Mphasis is on a positive glide path and I am sure that Nitin, given his track record in this industry, would further accelerate this momentum," Ayyar said in a statement.