George D. Schindler: Yes. Well, there’s two things going on as we talked about in the last couple calls, the conversion for managed services always takes a little longer because you have a transition. Same goes for IP in many cases, particularly if it’s a software as a service, but there’s implementation associated with it, at the beginning. So, there is just naturally a longer cycle there. And of course, that’s at the same time that that shorter term revenue is under some pressure. And so, it’s just a matter of timing and balancing those out. I think we’re on the back end of that type of situation. I don’t think we’re past it yet, just given the dynamics that we see going on and a little bit of the slowness not just even in making a decision, but then going from decision to starting the projects, it’s just taking a little bit longer.
But, with the model that CGI has being ROI led, that’s kind of our antidote to some of that slowness because we put that business case right in front of the client and we all align on it. That’s our anecdote, but it’s still a little bit slowness there.
Jerome Dubreuil: Thank you.
Operator: Your next question comes from Robert Young from Canaccord Genuity. Robert, please go ahead.
Rob Young: Hi. Maybe just a quick question on M&A. I think in the prepared comments, you emphasized, building critical mass and strategic metro markets. I didn’t hear anything about large deals, but then in response, one of the questions you’ve said that the deals are getting larger. And so, is that larger metro markets or are you still evaluating larger I mean, maybe mega deals. And what would be the biggest things that prevents CGI from looking at or executing on the very large deals?
George D. Schindler: Yes. We’re still active in looking at larger acquisition targets. Don’t — when I talk about what we’re trying to do in M&A is build out those metro markets. That’s both for the small ones and the large ones. We look at large targets that have operations across Europe and North America. When we integrate it will still help us in specific metro market. So, it really is, it works on both sides of the avenue. So, thanks for asking for the clarification because we are looking at both. There’s no real hurdles from evaluation, from integration, obviously, from access to a capital perspective for us to do a larger one. It really is about making sure that they’re accretive. And, making sure that, we have an understanding of how we would make that accretive.
And, as we discussed in the past some companies aren’t in a position, where we could make that happen. So, that’s what we’re discerning on, but there’s no, there’s absolutely no, barrier from an internal integration or access to capital perspective or what appetite, frankly.
Rob Young: Okay. That’s great.
George D. Schindler: Yes.
Rob Young: I’m curious about the pace of hiring and the restructuring I know the emphasis has been on your global delivery. You’re growing the mix there.
George D. Schindler: Yes.
Rob Young: It is attrition slowing down, and then, I’m just trying to maybe get drive to the impact on utilization and eventually margins from the hiring and maybe a different hiring environment?
George D. Schindler: Yes, well look the turnover continues to be below the industry average, but our turnover is also well below just looked at these numbers, well below the pre-pandemic levels. And that’s important to note because if you look at where we were just right before the pandemic, of course, it dropped during the pandemic, and then rose again. But now we’re back below where we started even before the pandemic. That does have a — it’s an opportunity for us because then, it allows us to be, a little more discerning on the hiring. At the same time, of course, hiring has eased in the difficulty of getting the hires. So, we can — all this adds up to, we can be really focused on keeping the utilization high, not hiring in advance of the demand, having to hire as much for replacement. And so, that puts us in a better spot from a talent perspective.
Rob Young: Great. And then, that growth in or the emphasis on hiring in global delivery, I assume that’s mostly in India. Is that become an easier place for you to find good talent? Are you relatively given that attrition is low and it’s better hiring environment and visits are up 2x from last year. Are you able to get the people that you need, or is it easier to get the people you need relative to during the pandemic?
George D. Schindler: I hate to say easy, because it’s a talent is always is an important one. But yes, it has eased, our value proposition, particularly in India, like I said, I was just there. It’s a pretty strong value proposition. And so, we’re doing quite well. And remember though, we also look to build our own. So, we bring a lot of individuals, very talented individuals out of school, put them through various training programs. So, we can also build our own. And so, it’s a combination of those factors.
Rob Young: Okay. And last little one, and the year budget flush, given government is so strong. And, I mean, I know there’s the looming shutdown again, but is that a factor at the end of the year across your business or does the macro change any opportunity for budget flush? And I’ll pass line.
George D. Schindler: Yes. Are you asking from Q4 or are you asking for Q1?
Rob Young: Yes. So, I mean, at the end of the year, so fiscal Q1, I guess.
George D. Schindler: Yes. So, actually the government fiscal year was in the U.S. For example, was the same as CGI’s fiscal year. So, we saw a little bit of bump from that, but no, I don’t think you’re going to see a bump from that specifically here as we move through. I think it’s going to be more of the other factors that I mentioned around policy initiatives and around stimulating the economy.
Rob Young: And outside of government, is there anything budget flush wise?
George D. Schindler: Well, unfortunately, that it’s not so much budget flush, on the commercial side. Unfortunately, what we’re going to see, I think, a bit of is that, at the end of the year kind of slow down temporary shutdowns of various clients where they just slow down all the projects, until the beginning of the next year. So, I think it’s going to almost be the opposite of a flush.
Rob Young: Okay. Thanks. That’s very helpful. I’ll pass the line.
