Professional Documents
Culture Documents
Problem statement
General Electric Capital International Service (GECIS) was a part of general electric
(GE) and operated as an offshore unit. In 2004, Pramod Bhasin, CEO of GENCIS, decided to
operate independently and move forward as a business process outsourcing (BPO) firm. The
problem which the company faced with that decision was starting its operation as a non-GE firm;
it will be difficult to attract clients towards the company. The company is having a very strong
presence in the market as a part of GE business, however, working independently as a BPO firm
would take much time to convince clients towards a BPO system of work. Building the trust
factor with the potential clients is another big issue for the company, as completely outsourcing
the business needs much trust on Genpact Inc. and its capabilities.
GE came into being in 1892 in the United States as a result of the merger of two
electrical device companies. In 1989, when the CEO Jack Welch visited India he saw lots of
opportunities there for the business to grow. In India the legal system is very good, the people
over there are full of technical skills and market has a very strong potential to grow (cited on
second page of case). That was a point when the company chose India to expand its operations.
Bhasin was president of GE capital India, which is located in New Delhi. He has been with GE
since 1984 and operated as a Radio Corporation of America. When he returned to India he saw a
great opportunity of an offshore unit of GE, which helped GEICS to come into being. The
company achieved a great success after seven years of its establishment in India and expanded its
of seven years of its operations in India (As cited in fourth page of the case). In 2004, GECIS
decided to operate as an independent firm with a name Genpact Inc. and gave its services as
BPO. They have a unique culture at Genpact; they build their business by meeting the demands
of the leaders of GE. The main focus of Genpact is to provide best outsourcing services with a
strong emphasis on customers’ preferences and creative human resources practices within the
organization.
Analysis
PESTEL
Political factor
Political factor describes the policies made by government in order to allow the goods
and services to enter into the country; political factor also consists of outsourcing. It also
describes the government’s support towards the business that is operating in the country. At a
stable rate the Indian government is average. Its political system is analyzed by different factors
that involve government policies, politicians’ interest and the rules implied on business structure
of that country. In India, political influences in privatization are reduced due to which they are
producing better results. Indian government allows free business and flexible international trade
that motivate companies to do business in India. Hence, the less political instability in India
makes it a better place for the companies to do business and make the country more developed.
Economic factor:
The economic factor in India is considerably stable, which makes the country more
attractive in a professional way. India allows a liberalization of foreign capital and does various
agreements on foreign technological advancement that help the country to improve its economic
conditions (as cited on eleventh page of the case). India decreased prices on various goods that
allowed companies to make profit by selling more goods as the taxes implied; and the prices set
by the government are moderate. Pricing strategy set by the government in India helps the
company achieve its target of attracting more customers and made it easy for the foreign
companies to set their business in India and enjoy a good economic environment of the country.
Social factor:
India put great interest in social responsibility; it took the initiative in setting the pension
cost for its employees working in the companies. The Indian government is now changing the
trend by recruiting older employees in the organization that help companies to achieve better
results by taking advantage of the experience which older employees have (As cited on the
eleventh page of case). Increasing the social activity of the country’s overall progress is helpful
in decreasing the unemployment rate in the country, and it brings a change in income
distribution, level of skills, education level and employment rate within the country.
Technological factors:
India is updating itself with the technological changes that are useful in the development
of the country. Instead of using the old traditional system, it is now focusing on the more
developed and updated technology that is used around the world. This technological
advancement helps the companies to produce better output by minimizing their time and saving
its cost that could be utilized due to an old trendy technological system of work. Technological
advancement helps the country to move towards innovation and make creative products that
benefit overall India by increasing its product demand around the world (As cited on the eleventh
page of case). Moreover, India is more towards IT advancement that brings lots of success to the
country as it is now very easy for the companies to operate in India. IT advancement allows
companies to maximize its profit by using a capital intensive system and lower the labor work
load. This system of work increases the efficiency of the output produced by the companies as
now there are less chances of human error in the result of projects.
Environmental factor:
India is offering a friendly environment for the companies to operate in India. The
Government of India allows a free business that makes it possible for the companies to maximize
its profit and achieve its desired goal. The environmental policies of India allow companies to set
high profit for the company and achieve it with the support of government.
Legal factors:
BPO vendors have privacy issues as they want their information to be secured and
confidential. Privacy is a serious concern with the government of every country. Each country
has its different privacy policies that make the activities followed by private sectors on the
collections of information from the clients. Companies have to secure clients' information and
disclose its personal information according to the policies made by the government of that
country (As cited on the eleventh page of the case). In India, privacy issue was very low as the
policies defined by the government are a win-win situation for the client as well as for a
company that is operating in India. As cited on the eleventh page of the case, the company has
issued a personal identification number (PIN) to the taxpayer and the internal revenue code of
Outsourcing and offshoring are two different terms that are responsible for performing
two different tasks. Both work to help the company to reduce its production cost and maximize
its profit by using other companies to perform a particular task on its behalf (As stated on the
fifth page of the case). Offshoring is defined as a function of moving business to another country
of the world however, it is supervised. It helps companies to minimize the cost related to
business by having its operations in the country where labor cost and other business operating
cost is less than the national country (As stated on the fifth pageof the case). Offshoring business
allows companies to have a control on its business activity while operating on an international
basis. Over here, the company monitors both input and output of its project operated outside and
transacts process related to its business only. On the other hand, outsourcing is a process where
companies transfer particular activity related to its business to some other country with the
authority of its supervision. The company only focuses on the output generated from the
outsourced company rather than the process of generating output. Outsourcing is a company
Drawbacks of Outsourcing
When the companies outsource their business there are certain risk factors that are needed
to be considered for the company or the factors that can cause huge loss if the company won’t
consider it while making a selection of its vendor (As stated on the tenth page of the case). The
Location Risk
When a company is going to outsource, it is very important for it to scan all the necessary
terms and condition of the particular location of its outsourced firm. It is a challenging situation
for the company to deal with the changes that are due to the change in location of a particular
operation. Fluctuation in the currency exchange rate may cause the parent company to suffer as it
has to pay according to the current currency rate of the host country. Moreover, there is some
cultural barrier that makes it difficult to deal with the people of that country (As stated on the
tenth page of the case). Their system of work and values of professional life is different that
results in the problem for the parent company carry out its desired task according to the way it
went. Companies need to consider all the risk factors related to a particular location, for example,
the culture followed in that country, social and political norms, and work life values for the
people over there. Identifying these differences help the parent company to carry out its business
Operational risk
It refers to the differences in time, cost and quality of work. This type of risk mainly
occurs from the vendor side. When the outsourced company fails to understand the quality of
work desired by the client then then the host company fails to produce the best output. Parent
company need to give its requirements in detail and remain in touch with the host company to
find out the progress of its project and ensure the quality of work produced (As stated on the
tenth page of the case). Timing issue also needs to be considered when the company is going to
outsource its business, as the timings of the host country are important while setting out the task.
Working hours of employees play a great role while setting out a target in other country of the
world as different countries have different working hours due to which sometimes the client has
to suffer.
Capability risk
Identifying the capabilities of the vendor is a key to be successful as this issue arises
when the client needs efficiency in work in a less amount of time. A company needs advance
level of capabilities in order to carry obtain a successful result, in a more efficient manner to
make a strong client relationship (As stated on the tenth page of the case ). Parent company while
outsourcing should trigger out the skills and abilities of the vendors to reduce this risk factor.
Information about the capabilities of the host company helps clients outsource more business and
Strategic risk
Complete dependency on the vendor is very risky for the company as it is relying on the
vendor for carrying out the business. To remove this risk factor, there should be a legal
agreement between the parent company and the vendor that helps the company to ensure the
business should be carried out by vendor as it is decided between them (As stated on the tenth
page of the case). Legal agreements play an important role in reducing a strategic risk factor as it
helps the company to penalize the vendor if they are not carried out their business according to
In BPO, client expectation is important for the company. When the company is going to
outsource its business, it is very important for the vendor to fulfil the client expectation. The
basic need of the client is to lower the cost of outsourcing its business as well as get the best
quality of output. When dealing with a new vendor, it is very risky for the company to depend on
them for its business to be resulting in a way as they want (As stated on the tenth page of the
case).
In the past decades, companies started realizing that for effective output production it
need to minimize its cost of outsourcing its business, i.e., the company needs to minimize its
production cost to increase its profit margin by transferring its business over to vendors. After
realizing this factor, companies started moving towards outsourcing a particular portion of their
business by moving its production department to another company. Thus, by doing so vendor’s
office became the back office of the company where the entire task has been performed and the
company will get its desired output. Outsourcing process benefits the company in a way that the
company gets more time for task designing or setting the goals to be achieved rather than taking
time on the operations for achieving the goals. On the other hand, outsourcing helps the vendor
by using its skills of working as a back office for different companies around the world. BPO
starts becoming successful with the passage of time as it is a win-win situation for both the
vendors and the company; both enjoy strong relations as one is designing the task and other
Outsourcing and offshoring is a business where quality of the work is acceptable by the
international country and its production of goods and services give the country a competitive
advantage over others. India has a competitive advantage of offshoring and outsourcing business
as the operations carried out in India are appreciated by the client companies around the world
due to the quality of work it maintained though out its operations. Challenges included in BPO
and offshoring are cultural barriers, timing issue, social and political problems that need to be
addressed by using effective management skills. India ranked among the top countries that
client’s feel reliable for a transferred of their business due to the satisfactory political and
Captive give advantages to the company to maximize its cost by identifying the low cost
center. Indicate untapped new area for the development and delivery of goods and services
around the world. Companies move towards captive vendors to transfer their business, but enjoy
all the supervision of their business by having knowledge about the project day to day activity.
This could help the company to minimize its cost, yet having all the control of its project (as
cited on page third of the case). On the other hand, when the clients move towards outsourcing
their business, then the overall responsibility of the operation to be carried out effectively
depends on the host country. Here the task performed by the host is very critical as it has to bring
out the accurate result according to clients' expectations. Factors that help the vendors and clients
to make their relation strong are the opportunity which the host country gets by allowing
international trade and create paths of international wealth for the country and reduce the
unemployment rate by increasing job opportunity through the client's business. Clients'
businesses help the country to upgrade the economic condition by offering more jobs to its
people and with the quality of work increase the international trade in the country, whereas, it
provided benefits to the clients by getting their businesses from the operations performed by
Recommendations
India has a potential market for the companies to outsource and offshore its business.
Genpact Inc. is facing an issue to convince the clients towards a BPO system of work with a
company who is new in this field of work. It is difficult for the company to attract clients with a
new name of the company, however, if the company shows its affiliation with GE for many years
and show some of its work done by the company as GECIS then it would be easy for the
customers to know the company and start outsourcing their business by identifying the success
rate company has achieved in its past. However, now the company is going to operate
independently, but at the start showing its affiliation would work for clients to understand its
brand name which helps them getting the idea of its success. Without showing itself as a member
of GE, it would be impossible for Genpact to attract more customers as for BPO trust building is
a very important factor for the clients gives its business to the vendor.
References
environment.
Mittal,V. Frennea, C. (2010). "Customer Satisfaction: A Strategic Review and Guidelines for
Managers."
Plunkett,W. Attner, R. & Allen, G. (2007). Management: Meeting and Exceeding Customer
Adam , J.(2003). Managing Business Risk: A Practical Guide to Protecting Your Business
Quandt, M. (2012).The Need and Importance of Outsourcing for Small and Medium Sized
Companies.
You might notice there is no real citation, but I used these references and I