Genpact CEO - digital domain expertise in an age of Uber

Stuart Lauchlan Profile picture for user slauchlan February 7, 2016
Embedded digital is key to growth in transformative customer engagements, reckons Genpact CEO Tiger Tyagarajan.

Tyger Tyagajaran
Tyger Tyagajaran

The biggest change is the change that we see in new clients, which is let's get digital and let's get analytics, and let's actually really disrupt the way the work is being done.

That’s the year-end view of Genpact CEO Tyger Tyagarajan as he contemplated the competive landscape in the changing outsourcing market.

Genpact turned in $64.4 million profit for the fourth quarter on revenues of $646.5 million, while for the full year profit was $239.8 million on $2.46 billion revenue.

BPO revenue was up 11% year-on-year to $1.93 billion, while IT services was squeezed down 3%, but it was to digital transformation opportunities that Tyagarajan pointed, noting deals with a digital core now account for 17% of total revenue:

The world continues to be volatile with low global growth for many companies. At the same time, newer digital technologies such as mobile, robotic automation, dynamic workflows, natural language processing, cognitive intelligence and machine learning are rapidly gaining momentum, producing disruptive outcomes for those companies that embrace them.

However, while some companies succeed in adopting digital solutions, many transformational journeys fail to drive improved performance and ultimately decrease value, because they don't address end-to-end processes. Instead companies often focus solely on front-end operations and ignore digitizing the middle and back-office. Helping clients transform their businesses by redesigning end-to-end processes is where we believe we create the most value for our clients.

Into this mix, Genpact can bring domain expertise, he added:

We strongly believe the power of digital needs to be complemented with domain and process depth and expertise to provide disruptive value. To more effectively meet our clients' needs, we improved our ability to take advantage of emerging digital technologies. Our bundled solutions integrate our deep domain and process expertise with digital technologies, data and real-time analytics, providing better outcome for our clients.

We apply lean principles to drive standardization and agility and bring in design thinking to allow us to re-imagine clients' operations. We call this whole approach Lean Digital, and we are finding amazing traction for this thinking approach and solution in the marketplace. This is clearly becoming one of the prime drivers of our higher win rates.

He cited as a case in point the deal announced last week with NASCO, a provider of healthcare solutions that is owned by six Blue Cross Blue Shield companies:

Our Lean Digital and data analytics expertise will collaborate with NASCO to transform Blue Cross and Blue Shield's health plan administrative processes into a digitally-powered operating model.

Another claimed differentiator is Genpact’s use of what he called ‘embedded’ digital and analytical solutions in a number of key account wins, arguing that this resulted in nine large transformative deals during the year, including two new engagements within the consumer products vertical in the fourth quarter.

The first of these is with the Carlsberg Group. Tyagarajan explained:

This is a complex global deal that redesigns and transforms their sales, commercial and finance processes. We won the deal based on our deep industry domain expertise and unique understanding of business practices within the international markets that they operate in, which gave us an upper-hand relative to competition.

Leveraging our Lean Digital approach, we will help design best-in-class finance and sales support shared service centers in multiple geographies around the globe. This will not only provide Carlsberg with agile operations with significant productivity gains, but critical insights from data analytics will be delivered from our System of Engagement platforms to continuously improve their finance and accounting processes and generate significant business impact.

The second such engagement is an expansion of an existing deal with Mondelēz International to transform finance and accounting processes outside of North America:

By automating manual processes and deploying our digital Systems of Engagement platforms, we are creating global Centers of Excellence to standardize and manage critical finance and accounting functions, including internal controls across the company as well as generate insightful analytics for faster decision-making.

While contemplating the transition from ‘traditional’ outsourcing to digital transformation services, Tyagarajan said he sees opportunity to partner with companies of the Uber-age:

In specific industries, there are these new age companies that are disrupting all the others. To the extent that they also have technology, analytics and a back office to deal with, and to the extent that they are new age, there is a real opportunity to actually build on a clean sheet of paper a partnership where we become their clear partner, or one of our peers becomes a partner.

I'll give you one example, and I think it'll bring it to life. In the peer-to-peer lending space, in the lending club kind of space, there is a real opportunity, where those companies are very good at what they do and they want to partner with others, who are very good at what, for example, we do. And they have hyper-growth themselves.

So those are relationships that you establish. And then, as they grow, we grow. We help them grow, because we help them scale. Those are natural relationships. I think it would depend a lot on domain expertise. It depends a lot on understanding the vertical, which is why where we would partner are those that belong to our verticals and the disruptors of the verticals that we like and we play in.

My take

Steady as she goes with nothing much to scare the horses.

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