{"id":1663,"date":"2010-06-11T16:47:00","date_gmt":"2010-06-11T16:47:00","guid":{"rendered":"http:\/\/localhost\/projects\/horsesforsources\/genpact-analyst-event-06111\/"},"modified":"2010-06-11T16:47:00","modified_gmt":"2010-06-11T16:47:00","slug":"genpact-analyst-event-06111","status":"publish","type":"post","link":"https:\/\/www.horsesforsources.com\/genpact-analyst-event-06111\/","title":{"rendered":"Event Alert: Genpact looks to a new era beyond \u201cGeneral Electric\u2019s provider\u201d"},"content":{"rendered":"

\"\"<\/a>In its first industry analyst conference, BPO <\/strong>provider Genpact emphasized its business, today, is much broader than supporting General Electric\u2019s back office and primarily delivering finance and accounting (F&A) services.\u00a0 <\/strong><\/p>\n

\u201cTiger\u201d Tyagarajan (COO – see earlier interview<\/a>) and Bob Pryor (EVP for global\u00a0sales, marketing and business development ) co-hosted on May 18-19 in Cambridge, MA in what Genpact billed as its first analyst and advisor conference. The event was well attended by all thekey\u00a0analysts and many of the consulting firms which regularly help clients hire BPO firms such as Genpact.<\/p>\n

The headline message was that the majority of Genpact\u2019s business is no longer with its former parent GE (currently about 40 percent). In fact, its GE business actually declined last year as a percentage of total revenues. Furthermore, only a third of its business is now in finance and accounting outsourcing (FAO). As demand in other areas grows, Genpact will continue to verticalize its offerings in areas such as back office processing for financial institutions and healthcare companies, in addition to developing its \u00a0IT services, and knowledge process outsourcing (KPO)\/analytics offerings.<\/p>\n

Genpact\u2019s front and back office client work supports a wide range of industries; mortgage, commercial and consumer banking, investment and wealth management, insurance (property,& casualty, life, actuarial), automotive and pharmaceutical. Genpact\u2019s pharmaceutical vertical provides a diverse range of services, and its banking, financial services and insurance revenue represented 44% of overall corporate revenues in 2009. Its mortgage business has had some interesting changes, which include a new service line in mortgage renegotiation due to recent U.S. government laws.<\/p>\n

In addition to the verticals already mentioned, Genpact has grown its presence in the healthcare vertical, as well providing the whole range of services from call center, F&A, analytics, and procurement to large international automotive companies globally.\u00a0 Many of its clients also utilize Genpact\u2019s\u00a0 KPO offerings, leveraging MBA types to do all sorts of analyses that enable them to assess and evaluate risk in many different business areas. These offerings have become so popular that they account for 10 percent of Genpact\u2019s revenues.<\/p>\n

Genpact\u2019s IT business accounts for approximately 16% of revenues, from ERP implementation\/support and IT infrastructure services. This capability allows Genpact to respond to a new phenomenon in the market wherein CFOs are looking to make rapid transformational changes in the operations of the finance function, and pay for that change in a manner that doesn\u2019t hit much against any quarter\u2019s earnings. The solution outsourcing providers say they are regularly asked for is an ERP implementation or upgrade along with offshoring of the F&A function. This deal structure is compelling to CFOs since everything but severance packages can be paid for over time, much like a software as a service (SaaS) deal. Several of these deals have been worked on in the last year, and Genpact has the capability to be considered.<\/p>\n

Genpact is also growing its source-to-pay\/procurement outsourcing business.\u00a0 However, it needs to better clarify its source-to-pay partnership and alliance model with ICG Commerce, a significant provider of procurement services. \u00a0Procurement outsourcing is clearly a space with a compelling value proposition, not only because of the potential for substantial spend reduction, but also because creative contracting and outcome-based performance pricing, are positioned to allow clients to structure an arrangement with little or no up-front investment or risk to themselves.<\/p>\n

Like all businesses, Genpact is working on becoming more efficient and increasing its margin. Its answer is in innovation, productivity, higher-end service offerings, automation, site selection for tax breaks, and spend management.\u00a0 It also has high expectations for its Smart Enterprise Processes (SEPSM<\/sup>) offering, a scientific, and granular proprietary approach to business process management which focuses on optimizing process effectiveness in addition to efficiency.<\/p>\n

The HfS Viewpoint:\u00a0 Genpact is addressing critical challenges to standardize processes across its clients, but recognizes the hard work is only just beginning<\/span><\/strong><\/span><\/em><\/p>\n

Genpact has expanded into logically adjacent processes to its core F&A base, and is demonstrating healthy growth. \u00a0It is saying all the right things from a potential client\u2019s perspective about its willingness to assume risk and make significant process improvements.\u00a0<\/p>\n

In its FAO business, Genpact has been at the forefront of the market in recent years, taking on a host of enterprise clients.\u00a0 However, the main challenge in FAO is to develop process standardization across clients, which will enable further growth and profitability.\u00a0 Genpact, like its main competitors, has not been immune to this challenge, but claims to be gaining \u00a0leverage by sharing resources across its client base. However, in many instances (like the vast majority of today\u2019s FAO endeavors), Genpact uses its clients\u2019 ERP systems and strictly adheres to clients\u2019 controls and risk environments, thus limiting the ability to implement multi-client process standardization .\u00a0 That is, it has to follow the work sequence, quality checks, data verification rules, etc that the client has always used and they cannot change them with the agreement of the client.<\/p>\n

Until it can gain wide acceptance of a largely standardized offering, it will struggle to leverage assets across its FAO clients and make process and cost improvements with multi-client impact. However, Genpact does recognize these challenges and is making concerted efforts to bring \u00a0– and gain – acceptance of more standardized processes to its clients.\u00a0 One of these opportunities to develop process standardization is to provides IT-enablement of processes by delivering a new ERP system to the client. For example, its recent alliance with ERP SaaS provider NetSuite<\/a> is targeted at mid-market clients which are willing to move to the NetSuite ERP platform and have Genpact service its business processing.\u00a0 In a similar vein, Genpact has also recently partnered with leading insurance asset provider MajescoMastek.\u00a0 We believe these alliances are a move in the right direction to deliver more replicable processes to its expanding client base, while providing differentiated offerings to their principal competitors, many of which are caught up in the traditional BPO log-jam of delivering customized BPO services around legacy ERP systems.\u00a0<\/p>\n

All-in-all, Genpact clearly recognizes where it needs to focus, but it will take another couple of years for the firm\u00a0to fully demonstrate real business results from many of its new initiatives.\u00a0 The BPO industry is still largely immature, and Genpact can only move as fast as its clients will allow.<\/strong><\/p>\n

You can download this HfS Research Rapid Insight, by <\/em>clicking here<\/em><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

In its first industry analyst conference, BPO provider Genpact emphasized its business, today, is much broader than supporting General Electric\u2019s…<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[48,835,81,838,87],"tags":[180],"ppma_author":[19],"yoast_head":"\nEvent Alert: Genpact looks to a new era beyond \u201cGeneral Electric\u2019s provider\u201d - Horses for Sources | No Boundaries<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.horsesforsources.com\/genpact-analyst-event-06111\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Event Alert: Genpact looks to a new era beyond \u201cGeneral Electric\u2019s provider\u201d - 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