Did you hear the one about the Italian process wonk who gave up his E-Class Benz, his job-for-life at SAP and his Frankfurt home to uproot his family to spend a year in Delhi devising strategy for an India-heritage BPO provider which, at the time, was barely out of its start-up phase? Yes, that actually happened.
I have known Gianni Giacomelli well for 10 years now, and have always described him as a misplaced analyst foraging a career on the sell-side – always one of the smartest guys to talk strategy, and great fun to bring to our HfS summits to face the fury of the buyers. Gianni today has found himself as product innovation and marketing lead for the largest business process services pureplay of all, Genpact, and moved his family from Delhi to the confines of Westchester County, New York.
So without further ado, let’s find out what’s going to happen in the world of business process operations..
Phil Fersht, CEO, HfS Research: Good afternoon, Gianni – it’s great to get some time with you today. I think we last featured you on HFS (see post) about maybe seven or eight years ago right at the beginning of the blog. So it’s nice to circle back after all this time and hear from you again. You have had a pretty colorful career in the services and software industries, so maybe you could just take us through some of the highlights.. and how you ended up doing what you’re doing today.
Gianni Giacomelli, SVP & Chief Marketing Officer, Genpact: Yeah, thanks Phil, and it’s especially good to see how you guys have evolved as well. I mean seven years ago, certainly a bunch of talented people – you never have thought that you would end up disrupting the analyst model so it’s good to have seen you growing like that.
I would actually like to make a parallel. I mean, you guys have grown and I think it takes perseverance and a lot of work but then it also takes innovation and agility – this stuff takes you, careers take you to an unexpected place. Frankly, I never would have expected starting 25 years ago working in consumer products marketing and analytics then in consulting for BCG and so forth and ending up in SAP, product innovation in a business services companies. I guess it’s a little bit of a hallmark of our times, right? You don’t quite know where you are going to end up being. I think all that matters is the diversity and what you call colorfully diverse. Because when you have diversity, you actually see things from different perspectives and you end up in places that you wouldn’t know but there is a logic, there is portability and I do think that is the crux of what I’ve tried to do. Technology that can be applied to services and services that can be applied to technology.
I do think that is the way many industries are converging these days, frankly, services and technology and consulting are colliding. There is a space that is called software as a service. Ten years ago it was software and then services. And there is another space that is called consulting and then there is advisory that is very close to ongoing relationships with clients that are very similar in some cases to operations support that we do. I think having the ability to look at those things from a different perspective and obviously I have worked as a consultant and advisor. I have worked in technology and worked in services, I came to see why it is that this stuff is converging because the root isn’t all that different.
Phil: Gianni, I think the biggest contrast in your career was spending several years working for enterprise software giant SAP and then moving to a high-growth Indian-centric (at the time) BPO firm (Genpact). How did you find that transition. What was the big difference between a big software firm and a big services firm… just from your experience?
Gianni: Yeah, so it’s interesting because, you know, first of all, Genpact, yes a very big India root but a company that was growing out of India really fast, it was exhilarating. I mean, the Board was, if you look at the composition of the company, a lot more diverse and a lot more global and especially now, many top people including CEO and CFO and a number of P&L leaders in New York, and certainly very strong roots, operations, and strength of that in offshore locations. So the company already promoted the idea at the time, Pramod Bhasin who was my boss back then did so vehemently, we needed to be absolutely global and already the India based folks where very global in that respect.
So that wasn’t actually too much of a shock to be honest. I also moved to India. I moved there for a year. The reality is that obviously I was in Germany before and moving to India isn’t quite the same thing but the type of work that you do is global. I mean, you can do it from the moon and at the end of the day, it’s very similar. You end up talking to Germans and Indians and instead of sitting in German you’re sitting in India, and conference calls, groups’ compositions are roughly the same, you just have to sit somewhere else. So that wasn’t really all that much of a shock, daily life and whatnot is different but that’s life anyway. I think the big difference though, and it’s interesting, is software versus services. I think it’s a difference that will fade away to some extent over time. Think about SAP, and how it has changed. SAP has always been long-term planning, you know, do three to five years planning, organic, don’t buy too many companies because you’ll corrupt your DNA. That was back then.
Obviously, they’ve now been buying companies left and right especially in software as a service and it is funny because in those days when I was there in 2004, we actually tried to start a software as a service business in many respects by trying to embed technology into the outsourcing service providers as well as obviously using similar software into shared services. It just met with a lot of internal resistance. That strategy turned into a defensive play instead of an offensive play and low and behold ten years later, the pendulum is swinging a lot. They have abandoned a lot of reticence against inorganic growth and creating all this HANA based stuff that is a lot more malleable and adopting software as a service pervasively. So the company was already changing quite a lot back then in 2010. That is also the reason why the jump wasn’t all that big.
But yes in terms of software you have long cycles of building an assets whereas in services you typically try to get into a client situation and build stuff out from there and I think that was the biggest difference. It creates differences in terms of which people you staff solution design and delivery functions with, how you give investments, tollgates and all that kind of stuff. But even software companies are increasingly doing co-innovation with clients, doing agile development, and software as a service means that you don’t allow product management in Germany to tell you what products and operational functionality because it is needed for those clients in North Carolina – you do a lot more of a try, test, does it work, remove and then move on. I think services companies are coming in from the other side. I for example think of co-innovation with clients but also creating assets, creating the foundation, creating, in our case, system of engagement technology that allows you to build IT underpinnings more quickly. And yes, it is agile development with a lot of testing with our operations people.
Phil: There is so much talk right now about disruption, Gianni, with the emergence and availability of new technologies, automation and analytical tools and capabilities – and there is a lot of out-of-the box thinking going on. Are things really that different when you look at your clients and what they’re buying from Genpact today? Do you think there is a genuine shift happening in the industry, in terms of the types of services clients are buying and the way they are going to be priced?
Gianni: This is interesting because five years ago I would have said, Phil, in many respects I can go into hibernation for five years and I come back and we’re still talking about the same stuff when it comes to innovation. In 2005, we talked about outcome based pricing and we used to talk about governance. In 2010, we’re still talking about the same stuff. The reality is that I do think the last four years have changed things substantially. A couple of things that I think have happened. First of all, let me just clarify one thing that hasn’t happened. Here you are dealing with operations so follow me and forget about shared services, outsourcing and whatever those are just incarnations of operations. You’re dealing with operations and the ability to do controlled experiments in operations is always relatively limited. That is the reason why you can’t often do abrupt innovation changes. This industry is not like I buy an iPhone, I like it, I don’t, tomorrow I buy a Samsung.
In operations, there is legacy and refresh cycles are longer that is the reason why many of these things get delayed. Obviously, service oriented would have helped already back in 2007 but they didn’t until a couple of things happened. But a few things happened. First of all, APIs are a lot more pervasive right now. You have a lot of systems of records out there that you don’t need to use the inner architectures of. Very often people just take stuff out through API. The master data is still a mess but the solutions are more intelligible than it used to be in the past – from both a technology and process standpoint. So when you have those two, you can actually start pulling process stuff out and do change bit by bit which is actually what enables innovation and most people don’t think about that, but the reality is that if you try to change things wholesale, the COOs of any operation they won’t do it unless you allow them to do it bit by bit.
The other thing that has happened is obviously all the practices related to shared services and outsourcing has matured. I mean, they used to be an exuberance period in 2005 and 2007 in which everybody was running offshore for all sorts of things and I think there were a bunch of deals especially in the HR space but also in others where some providers took too much stuff to be honest and they actually ended up tarnishing a little bit of the reputation of an industry because of few but disproportionally publicized. So a lot of that has matured and that also gives everybody a bit of a level-set, and people are less reluctant to try new stuff now. And the third aspect is within the last two or three years, we have had a bunch of stuff that has become really mature in terms of technology. You should look at Mobility, you can look at Cloud, you can look at analytical tools, all that kind of stuff. It has been about three years, all of them have come together and they are mature now.
Three years ago the performance of those things was crappy and it was unpredictable if you would finish something in time or not but now the mobile applications work, much big data technology is not bleeding edge anymore and it allows you to do a proper job with distributed analytical powers. The Cloud stuff isn’t – a lot more people understand a lot more how you can use Cloud. Think of our systems of engagement, they couldn’t have been there at this scale and cost three years ago. So I do think that those three things all together are a big shift and they come together and now is the perfect storm on top of obviously the fact that in 2008 the world changed and it has created a burning platform for a bunch of people. So I do think that things have changed.
Phil: The platform is definitely burning! There is a desire to change… so when you look at Genpact, you have built a great business through managed operations, BPM, so where does it go from here? Does you become more of a consulting type business? Do you just broaden your operational services business? How does Genpact get to that next phase of growth in your evolution? What does that kind of game plan look like?
Gianni: Yeah, I think the way we look at it and certainly the way I look at it is twofold. First of all, let’s straight on understand what your clients want from you, which is getting them to run more effectively and efficiently. And secondly, let’s try to understand what you can do because of the genome of what you have. If you wanted me to be a singer, that would be great but I wouldn’t have the genome to do that so you wouldn’t want me the do that. So the same applies here. I mean, many of our clients for which we have been running operations believe we have been a really good operator and really good transformer of day-in and day-outs processes and so forth for almost 20 years for some of them. They ask “can you help us design and transform the next wave?” I think that is legitimate. Yes we’re not a management consulting firm per se. I mean, we’re not and will never be a traditional management consulting firm. But what does that mean?
We certainly have a sense of what we call the “operations feedback loops” which basically means whenever you change things, you know, small things, big things, we run that stuff and we actually figure out if those things actually materially impact from a business outcome standpoint what you’re doing. That clearly gives us an advantage over folks who just design or implement the stuff – because we design it, then we test it, we have thousands of people working on that stuff hands on keyboards and eyes on screen and a bunch of clients we can observe and you end up understanding what works and doesn’t, both on our side and on our clients’ side. So that’s our angle. Our angle is we typically tends to be fairly accurate in terms of understanding what works and what doesn’t, what will work and what will not work. Now, are we going to be your strategy consultants for every company function? Are we going to do the complete blue sky and candles kind of stuff? Should we be that? I mean, what we do is about how you run companies better, it is operations. At the end of the day, you want to invent the future but you want to invent a future that our clients can run on within the next two years. There is no appetite anymore for long jumps, because of the volatility and uncertain market conditions. I mean, you can do a little longer but it isn’t like in the old times when you implemented ERPs with a 5 years ROI in mind and it ended up being 10 and you survived it.
So I think we are becoming a little bit of that. Managed services company who can design, transform, and help you run and continuously innovate on your operations and frankly, the crux of the operation is how do we them make it intelligent, how do you re-imagine them so they predict, sense, react and learn from the impact to get better next time. Part of it that we run, part of it you run. How do we use tools? How do you use metrics? How do you use the process acumen to optimize both of them? Certainly, yes, we have come a long way from just operating one part of the business. I do think that in this respect, the GE heritage has helped a lot because we have always been kind of an extension of a client company. We have been a service provider but the next door was the rest of the company so you can actually understand how you can work across boundaries and whatnot. Does that clarify a bit?
Phil: Well thought out, Gianni. So that brings me to my final question… You are crowned the emperor of BPO for one week and you are allowed to do one thing to change the industry, what would that be?
Gianni: Our is an industry that needs some vision as well as execution. Maybe I will go way back to your initial point which I think you bumped into it and maybe accidentally but I think it is a very profound one. This isn’t about BPO or shared services or system integration or consulting or big data. This is trying to solve enterprises way of running at scale, every day, operations, a bunch of different processes. I think I would do one thing which is take everybody who is involved on the BPO side and the shared services side, on the consulting side, the analytics folks, in banking, in health care, in consumer products, and a bunch of other places, across processes. Put them into a blender, mixed them up and kind of pull them out and put them into different positions from where they were.
So in other words, just push diversity. People get siloed and incremental because they have always looked at their little patch of land and they think oh, you know, domain expertise is all there is, and obviously you need to have that, but that’s not all. We ran an interesting piece of analysis recently. We took a sample of 500 operations leaders, and most of those folks have only worked in one industry. I think that is dangerous. And by the way, you are in the one industry where you have more a mixed genome is the software industry, where people from all kind of places. Spot the correlation with innovation.
But the reason why that is, if you look at, take health care, they want to get straight processing through processing of a bunch of stuff that they do but, you know what? Banks have been doing straight through processing for probably 20 years. Well, I want you to get people from banking into health care to look at some of that stuff. And you look at the contact centers in pharma companies and their model of needing to listen more to clients directly and perhaps even provide services, and again, there is CPG contact centers have been doing social media analytics for that and have been doing a lot of combing and listening to clients in very portable ways.
It’s just that the moment that you start siloing people and siloing careers. and, by the way, the same can be said for services and technology, people think of them as categorically different but there is more overlap than you would think. You get to stifle stuff a bit, right? So what I would do is just get people to, for a week or a month or a year, do – what was that movie, Sliding Doors, I mean, you have got to swap people up for a period of time, right, and then see if you still can do things and if you can innovate. I think that probably would be a good thing for the industry.
Phil: Well said! It’s been a great interview Gianni – really some strong stuff in here. I look forward to sharing with the HfS network.
Gianni Giacomelli is SVP, Product Innovation and CMO for Genpact. He can be reached on twitter at @ggiacomelli