1. Industrialized Enterprise
Business Process Operations
Global transaction processing and decision support –
a future-proof business model architecture to combat volatility
February 2014
Gianni Giacomelli
CMO, Genpact
www.genpact.com
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2. About Genpact ► Overview
A Global Leader In Business Process Services: Process
Transformation and Outsourcing, Analytics, Technology
What we do
We help leaders of some
of the largest enterprises
transform and run their
processes and
operations, including
the very complex and
industry-specific
How we do it
Our impact
Unbiased, agile combination
of process science, related
technology and analytics
limiting upfront costs and
enhancing future adaptability
We help enterprises to be
more competitive by
becoming more
intelligent: adaptive,
innovative, globally
effective and connected…
Right critical mass: we are
large (62,000+ global staff) but
our solutions appropriately
flexible; our top management
is directly involved in our
client partnerships
…by enabling tighter
management of costs,
risks, regulations, and
growth enablement
The results: US$22B* of impact for 800+ global clients
*US$22B is a cumulative
figure since 2006
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3. The Challenge
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3

4. Countering volatility with mature enterprise operations
Volatility requires agility of cost and decision-making
• Maintaining cost structure (G&A, COGS) and asset intensity in line
• Faster data-driven decisions and related, granular execution (e.g. budgets, S&OP,
customer interaction in both developed and developing markets)
But existing business process operations were built in less-volatile times, optimized for
scale, and struggle with current requirements
• Rigid cost structure
• Little innovation aimed at supporting effective value chain decision making and execution
The rapid rise of Global Business Services (GBS) hints at viable enterprise operation
strategies
• Industrialization of services: specialized and advanced process, people and technology
practices
• Decouple and scale operations, yet run end-to-end extended enterprises
• Reduce and variabilize cost, increasing business effectiveness
• More tasks and processes being in-scope
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5. Unprecedented volatility is a challenge and an opportunity –
Operations have a strategic role in both
Need to defend
A shift in the
“art of possible”
will change
operations
•
Developing markets largest new demand – but tricky to serve
•
“Granularity of growth” – micro verticals in developed markets
•
Volatility of demand and supply (talent, capital, materials etc.)
•
Regulations burden increasing (finance, environment)
•
Need to attack
Explosion in structured and unstructured data: analytics savvy
players compete better
•
IT in a flux - ERP, and BI/DW have not always delivered
ROI, cloud offers promise but practices still evolving
•
Collaboration technology and practices inflecting right now
•
Scientific understanding of GBS operating models and
process performance (cost, risk, quality) to serve key functions
(finance, supply chain, run-the-bank, sales & marketing)
Operations were designed for scale and cost – in today’s volatile environment,
enabling the enterprise requires a new operations strategy and robust execution
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6. Why volatility and surges are here to stay
Demand-side problems vicious cycle – consumer products example
Emerging
Global Middle
Class
• Global population expected to reach 8 billion by
2030, accompanied by a huge increase in the emerging middle
class in economies like China and India
• More people with more disposable income demand more
energy, food, raw materials and consumer goods, driving prices
up
Energy
• Growth in energy demand is expected to be 60% higher by 2030
• Roughly two times more than the rate of population growth
• Supply is not keeping pace
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7. Why volatility and surges are here to stay
Demand-side problems vicious cycle – consumer products example
Alternative
Fuels
• Higher fossil fuel incent diversion of crops to use for gas additives
and bio-fuels
• E.g. corn for ethanol, soybeans for biodiesel - further increasing
pricing for such commodities.
Food
• More people can afford to eat more, leading to higher long-term
food and feedstock prices
• Higher prices for grains, seeds, animal feed-stocks and other
commodities lead to higher prices in staples like
bread, milk, eggs, oils, flour, meats, poultry etc.
Consumer
Goods
• Increased global demand for consumer packaged goods drives
higher demand and prices for their commodity and raw material
inputs
• Higher fuel prices, and related higher transportation and
distribution costs
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8. The Solutions
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9. Industrialized operations use specialized and advanced process,
people and technology practices
Analyti
cs
driven
proces
ses
Optimization
Superior
metrics
management
Effectiveness
Efficiency
Cost
Targete
d org
design
and HR
practic
es
Focused
Technology
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10. Industrialized operations use specialized and advanced process,
people and technology practices
Metrics
management(1)
Org design and
HR practices
Labor
Effectiveness
Scale
Technology(2)
Efficiency
Optimization
Cost
Analytical process science
(1) cost structure, performance
ERP wrappers and config, BI and big data, workflow, collaboration, social, mobile
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11. Industrialized operations as extended enterprise
SIMPLIFIED
Business Partner
Business
• Services that require on-site
presence or that directly impact
the end customer experience
Corporate
Service
Requirements
GBS
Performance
Contracts
Provide corporate governance and
strategic guidance, establish
policies
• Processes requiring deep
expertise in specific functional
disciplines
• Highly advisory in nature, may
require frequent face to face
Internal Partner
Run processes efficiently, drive
best practices and value
• Rules-based processes common
across business units
• Significant process transaction
volumes
• Remote interaction with rest of
business
• Common systems infrastructure
Source: Genpact experience
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12. Operating models and industrialized operations
Other management
TARGET
OPERATING MODEL
Operations
OUTSOURCED
RETAINED
INDUSTRIALIZED
OPERATION
IN-HOUSE
FINANCE FUNCTION
GBS
IN-HOUSE
SUPPLY CHAIN FUNCTION
REGION 1
REGION 2
CAPTIVE
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OUTSOURCED
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13. Operating model choice depends on the objectives and the
additional impact of key levers
SIMPLIFIED
Corp
central
GBS
Captive
Labor arbitrage*
BPO
Limited
Levers
Business
partner
Process optimization
Significant
Absolute
(FTE related, Infra, IT, G&A)
Variability
High-volume process
Typical benefits
Process
effectiven.
Cost
benefits
Economies of scale
Custom, location &
context dependent proc.
Standardization
Other
benefits
Ease of setup, management
IP and business integration
Compliance and control
Market entry, scalability
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*includes cost arbitrage, and availability of skills
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14. Industrialized business process operations are increasingly
adopted and contribute to counter volatility
Strong emergence of GBS model…
From F&A and IT, to multiple functions
including decision and compliance support
Beyond traditional lift-and-shift cost focus
….enables resilience
Efficiency
• Cost structure: leaner, more predictable, and
easier to flex
• Decoupling and global delivery of
“industrializable” components
• Better timeliness, accuracy, consistency
• Stronger process and organizational metrics
linked to business outcomes
Effectiveness
• Data-to-insight embedded into process
• Finance ops (O2C, S2P, R2R) - best practices
applied consistently globally, better scalability
• Advanced use of collaboration technologies
and practices
• Sales & Marketing, supply chain data –
transactional and analytics heavy lifting
• In-house and outsourced mix continues to
evolve
• Across functions, ability to scale up and down
geographies, accommodate M&A
Benefits from
• Scale (10X = 50% less cost per transaction)
• Optimization (10-70% improvements)
• Cost arbitrage (up to -70%)
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15. Significant potential still exists for industrializing operations in
DIRECTIONAL
the Life Sciences* industry
Average # of FTEs
% already industrialized
% industrialization potential
R&D
20%
15%
30%
Procurement
40%
Sourcing and procurement support
100%
10%
Inventory and demand forecasting
Product cost accounting
20%
50%
20% 5%
70%
25%
75%
50%
30%
Back-office Support
General Management
Research support
65%
30%
Manufacturing
Distribution
Customer Care
Marketing & Sales
% not applicable
4%
1%
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95%
Industrialized Enterprise Ops
Scope and Impact
Logistics optimization
25%
Contact center support
Sales and Marketing ops and
analytics support
20%
All G&A support
Decision and transformation support
Source: Genpact Analysis, BLS
*includes Pharmaceuticals and medicine manufacturers
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16. Significant potential still exists for industrializing operations
DIRECTIONAL
Industrial Manufacturing
Average # of FTEs
% already industrialized
% industrialization potential
R&D
9% 1%
% not applicable
90%
30%
Procurement
Industrialized Enterprise Ops
Scope and Impact
10%
Manufacturing 0%
Research support, engineering services
60%
Sourcing and procurement support
100%
0%
Inventory and demand forecasting
Product cost accounting
Engineering Services
Logistics optimization
25%
Distribution
Customer Care
Marketing & Sales
Back-office Support
General Management
Contact center support
5%
30%
25%
5%
70%
30%
70%
50%
4%
30%
95%
40%
Sales and Marketing ops and
analytics support
20%
All G&A support
Decision and transformation support
1%
Source: McKinsey Research Institute, Genpact Analysis
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17. CPG
Significant potential still exists for industrializing operations
DIRECTIONAL
CPG* industry
Average # of FTEs
9%
R&D
Procurement
1%
30%
90%
10%
Manufacturing 0%
60%
100%
0%
25%
Distribution
Customer Care
Marketing & Sales
Back-office Support
General Management
5%
30%
25%
70%
30%
40%
5%
70%
50%
4%
1%
% industrialization potential
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30%
95%
% already industrialized
20%
Source: McKinsey Research Institute, Genpact Analysis
% business as usual
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* includes metal products, rubber and plastics, printing and publishing

18. Software, Internet Services Companies
Significant potential still exists for industrializing operations in
DIRECTIONAL
High Tech Companies*
Average # of FTEs
R&D
9%
Procurement
1%
90%
30%
10%
60%
Manufacturing 0%
100%
0%
25%
Distribution
Customer Care
Marketing & Sales
Back-office Support
General Management
5%
30%
25%
5%
70%
30%
70%
50%
4%
1%
% industrialization potential
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30%
95%
% already industrialized
40%
20%
Source: McKinsey Quarterly, Genpact Analysis
% business as usual
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* computers and office machinery, semiconductors and electronics

19. Contact Genpact to Explore
The “Art of the Possible”
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20. About Genpact
Genpact Limited (NYSE: G) is a global leader in transforming and running business processes and
operations, including those that are complex and industry-specific. Our mission is to help clients become
more competitive by making their enterprises more intelligent through becoming more adaptive,
innovative, globally effective and connected to their own clients.
Genpact stands for Generating Impact – visible in tighter cost management as well as better
management of risk, regulations and growth for hundreds of long-term clients including more than 100 of
the Fortune Global 500. Our approach is distinctive – we offer an unbiased, agile combination of smarter
processes, crystallized in our Smart Enterprise Processes (SEPSM) proprietary framework, along with
analytics and technology, which limits upfront investments and enhances future adaptability.
We have global critical mass – 62,000+ employees in 24 countries with key management and corporate
offices in New York City – while remaining flexible and collaborative, and a management team that drives
client partnerships personally.
Our history is unique – behind our single-minded passion for process and operational excellence is the
Lean and Six Sigma heritage of a former General Electric division that has served GE businesses for
more than 15 years.
For more information, visit www.genpact.com. Follow Genpact on Twitter, Facebook, and LinkedIn.
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