Witness to the Revolution

Serge Godin helped found CGI Group in 1976 after receiving a contract from Québec’s Social Affairs department to develop a system for labour negotiations. Today, CGI has an annual run rate of $3.8 billion and employs 25,000 professionals in 100 offices around the world. CC: The industry has gone through a downturn in the last few years and some see IT as nothing but a commodity. Do you see it that way?

Godin: I totally disagree with the people who say IT is commoditizing. Some of the tasks have been commoditized, but if you have evolved from IT into business transformation, it is far from commoditization. When you look at the entire spectrum of technology, there is a natural evolution from IT to business processes which is far from being a commodity. IT then becomes the backbone of business transformation.

CC: Given the move from an IT focus to more of a business one, where will the opportunities in outsourcing be?

Godin: Outsourcing is kind of a service where companies agree to share resources. And that’s what we do. We merge activities under a very solid management foundation and we find economies of scale resulting in cost savings. With those cost savings, we re-invest in business transformation. The IT spending in Canada is $60 billion. In the U.S., it’s $580 billion a year. In Western Europe its $480 billion U.S. This is a huge, huge market. With the concept of shared services, savings could come from better utilization in sharing between companies. It’s like sharing highways. To share services requires a huge (upfront) investment. You could, for example, build centres of excellence anywhere in the world — including Canada and India — and the business case would be setting up those centres.

CC: There’s also debate out there whether long-talked-about globalization is actually happening or if it has stalled. How do you see it?

GODIN: Out of our 100 largest clients, exactly 62 have IT operations in both North America and Europe, and 32 also have operations in Asia-Pacific.

CC: Do you see offshore outsourcing as a threat or has it been overstated?

GODIN: It’s a big advantage for us. It puts us in a position where we are able to reduce the costs to us and to the client to bring more savings and to re-invest in business transformation. Since we are one of the largest players and we are a neighbour of the largest market in the world in terms of IT, and because we have centres of excellence in Canada and in India, it means an evolution in terms of a delivery capability.

CC: Looking back over the last 30 years, what were some of the memorable moments for you?

Godin: The one transforming event was in 1986 when we did a planning exercise and asked our clients where they see us evolving. They told us the trend would go towards outsourcing, and we made a decision to not only be a system integrator but also to become an outsourcer. The fastest way to do that was through an acquisition, and so to finance that we went public in the same year. The other major event was in 1998 when we signed a deal with Bell Canada, after CGI and Bell Sygma merged. It was a $4.5-billion contract, and that was a signal to the market that CGI was now a credible player in the large outsourcing market.

CC: Back in 1986, companies had large IT departments, none of which wanted to outsource. What specifically happened to change the corporate mindset when it comes to outsourcing?

GODIN: You’re perfectly right about that, but back in 1986 the offering was not there. There was no company, at least in Canada, to handle that kind of challenge. There was resistance because there was a lot of skepticism at that time.
Today, when you sit down with a client and look at the capacity you have, there is an alternative.
CC: If you and your company could only be remembered for one thing, what would that be?

GODIN: I’m very proud of the team. You need to have strong people who are curious about new technologies, to have to go through all those transformations and to always be ahead of all those trends. When you look at it from a management point of view, we have one of the lowest turnover rates in the industry. This was a huge challenge for our workforce and we are very proud of the people, and we are lucky to have such a strong group.

CC: Over the years, have you relied on most of these people coming out of Québec?

Godin: We are an international company now. People are coming from everywhere.

CC: Do you remain very hands-on and active on a day-to-day management level?

Godin: I would say that I’m working from eight to five but in my case, it’s more like five to eight. I’m still having a lot of fun.

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Jim Love, Chief Content Officer, IT World Canada

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