General Electric in India: The Growth Strategies

1. ANAG THE DIGITAL FIRM
November 20, 2013
Monzer AL-Shaikh Warak
Under supervision of Dr.Mamta Bhandar
GE in India: The Growth Strategies
ACTION LEARNING PROJECT
Business Process Management & Outsourcing

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GEinIndia:TheGrowthStrategies|11/20/2013
GE in India: The Growth Strategies
Introduction:
GE Capital International Services (GECIS), provides outsourcing services, including
finance and accounting services, collection services, insurance services, customer
fulfillment activities and processes, data modeling and analytics support, managed
IT services, software solutions, e-learning, and remote marketing.
It was set up in 1997 to carry out back office operations for a number of the Capital
businesses in order to leverage the English speaking, highly educated, intellectual
capital of India to deliver processes that do not require face-to-face contact with the
customer.
By 2002/03, several third-party outsourcing companies in India could do the work
more cheaply than GECIS. At around the same time, GE also restructured its core
businesses and found that GECIS no longer fitted in.
So in 2003, GE began to consider spinning off its BPO business and started pitching
for third-party business.
Case analyses:
 GE Capital International Services GE differentiated between their core and
non-core processes and decided to outsource their non-core process to
increasing its competence and focusing on customers.
 Very often organizations find that a review and re-engineering of their
processes makes them more competitive.
GE India has decided to focus on its core businesses of healthcare, financial
services, transportation equipment and infrastructure. Thus, it eliminate all
other processes that is not match their main strategy.
 While GECIS delivering services, then the main assets are their employees,
the industry that has been rechristened as business process management
should depend on developing expertise. Expertise to manage processes end -
to –end, Expertise to provide that extra edge to services. This is what will
drive future growth.
 GECIS was constantly struggle with attaining competitive advantage that is,
outperforming their competitors in the marketplace by attracting more
customers, providing better or more services.
 It invested in information technology to keep their competitive advantage.

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 GE sold its 60% stake in GECIS for $500 million to General Atlantic Partners
and Oak Hill Capital Management.
It found that to shift its focus to other areas like power, aircraft engines,
medical imaging and television programming.
 There is 40% stock remaining for GECIS, which will allow them to use other
their technology.
 The company also planned to increase its third party off shoring business by
opening new centers in smaller cities and towns of India.
 GECIS developed a multiple strategic foci In order to grow, It identified the
areas that are strategically related to their own and form partnerships (General
Atlantic and Oak Hill ) to provide the synergy for growth.
 Although there is, opportunity for GECIS to grow the management of GE has
decided to divest in GECIS because it did not fit with their main strategy.
 GECIS Taken the principle of change Culture as a continuing journey By:
o Using Change as a strategic and competitive advantage
o Optimizing change effectiveness
o building a culture that drive change
 GECIS reduced their cost by performing Business process re-engineering and
Outsourcing their non-core business processes, it had previously worked on a
70:70:70 metric, meaning that 70 percent
of all tasks were outsourced, 70 percent
of outsourced tasks were offshored and
70 percent of offshored work went to
India.
 GECIS should keep focusing on their
source of Competitive Advantage, it
should remain:
o Inimitable: Competitors cannot
duplicate easily this characteristic or attribute.
o Scarce: Competitive advantage will not accrue to a resource that is
equally available to all organizations.
o Valuable: A resource that has no value to the business or its customers
would not be classified as or thought of as valuable.
 GECIS managed their partnerships careful so as not to breed competition.
 GE has been adroit in managing its offshore program – and GECIS, which
continues to rely on the best practice Six Sigma model, seems to be well-
positioned on both fronts.

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 GECIS should keep careful with offshoring, it should outsource to
organizations that have proven track record. as well as keep Reviewing
technology and skill base.
 GECIS should increase Visibility to other countries. Also, Increase public
awareness of GE's growth and portfolio; make big announcements on all
advancing activities.
 Below are the SWOT analysis for GECIS:
 STRENGTH  WEAKNESS
 Past association with GE
 Employee satisfaction
through growth
 Lowest attrition rate
 Best training provider.
 Indians peoples has A good
English skill
 There is remaining a 40%
stock in GECIS that will
allow them to use other their
technology
 Considered to be as a low
payer
 Communication gap between
superior and subordinate
 Dependence on GE
 Opportunities  THREATS
 SEZ areas provided by
government
 Upcoming clients
 Emergence of new
outsourcing fields
 Increase in Indian inflation
rate
 Appreciation of rupee
 Many competitors
 The major challenges lie in the skills area, where attrition rates range from 25-
40%. Together with rising employee costs, retaining management talent is
becoming a major concern.
 Another challenge front of GECIS is to rope in new clients and slowly move
away from solely servicing GE as a captive BPO unit.

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However, since it has expertise and a global presence, it should be able to attract the
right clients.
To avoiding outsourcing partnership failure, GECIS and their partners requires an
outsourcing relationship that leverages five essential activities of collaboration:
» Vigilantly Select the Right Partner
» Identify and Retain Talent
» Set the Goals Together and Share the Responsibility
» Pair Functions to Support Alignment
» Keep Both Sides of Senior Leadership Involved
Among the unique features of GECIS is the fact that it has moved from servicing a
single parent entity to fending on its own.
This requires considerable marketing muscle and new people have been hired for
this purpose to help fatten the order book. The company has to compete with others
in the BPO space and prove that it can be as effective as a solo entity as it was when
it was a captive BPO unit.
GECIT Newss
 In October 2005 after the spin-off, GECIS changed its name to Genpact.
 As 2013 statistics, the number of
employees is more than 65000 employees
with $2.20 billion Revenue.
 Genpact operates from Asia, Eastern
Europe, Northern America, Latin
America, Australia, and Africa.
 By 2003, Genpact was having 7500 employees at its two centers in India –
Delhi and Hyderabad, now In India it operates from Gurgaon, Delhi,
Hyderabad, Jaipur, Dehradun, Noida, Kolkata and Bangalore. The operations
in India are finance and accounting, sales and marketing analytics, customer
services, financial services collections, supply chain, information technology
and actuarial and other insurance services with learning content development.
Genpact received approval to open its Special Economic Zone center in
Bhubaneshwar.

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 Latest Genpact Acquisitions:
o April 2011: Genpact acquired Headstrong, a Virginia-based consulting
and IT services company with a specialized focus in financial services,
for US$550 Million.
o On 15 September 2011, Genpact Acquired EmPower Research, an
integrated media and business research company with strong
capabilities in social media research and measurement. EmPower
management has offices based in New York, Bangalore, Cincinnati,
New Jersey, San Francisco, and London.
o On May 14, 2012 . Genpact announced that they will acquire Atyati
Technologies which is a technology platform provider for rural banks
in India.
o July 2012: Genpact announced its plans to acquire Triumph
Engineering Corp.
 In 2009, Genpact introduced its Smart Enterprise Processes, Genpact’s Smart
Decision Services sell advice to its clients through targeted analytics,
reengineering knowledge, and risk management.
SEP methodology was reviewed and recognized by International Data
Corporation (IDC) and other Industry Analysts.
 Genpact has a 50:50 joint venture with SBI & NDTV in NGEN Media
Services. It also has tied up with NIIT for training related services.
 GECIS enhanced and refined business processes by training its workforce in
Six Sigma, a quality-control program for business process improvement.
References
 http://www.genpact.com/impact accessed at 20/11/2013
 http://www.thefreelibrary.com/NICE+Announces+First+Mass+Production+Implementation+of+NICE+Perfo
rm...-a0133361480
 Case study, Business Process Offshoring to India, Guru Sahajpaland and others
 Article: Should Indians also pay the 'Warren Buffett' tax?
 ‘The house Jack built ... and Jeffrey is about to sell,’op. cit.
 ‘How Genpact CEO Pramod Bhasin and His Team Are Breaking New Ground In BPO-land,’ op. cit.
 "Offshoring lifecycle of GE Capital International Services", by Nitisha Patel
 Wikipedia: http://en.wikipedia.org/w/index.php?title=GECIS
 GE's Growth Strategy, By: McGinsey & Company, KAIST Business School, Dec 15, 2009
 FIVE KEYS TO SUCCESSFUL COLLABORATION, By:Michael R. Koontz and others, HfS Research, March
2013
 GlobalNxt Course Content "Business Process Management and outsourcing"