Genpact: From Buyer to Supplier - Pascal Henssen
After spending 14 years with General Electric in various executive roles, Pascal Henssen decided to move to the other side of the fence to become COO of Europe for Genpact, a former operation of GE and now a leading business process outsourcer (BPO). He shares his experience with FDE’s Steve Dunkerley on what is needed to achieve a ‘win win’ partnership.
Steve Dunkerley: In terms of competing delivery models, how has the outsourced BPO delivery model evolved compared with the shared services model?
Pascal Henssen: The BPO industry has matured, as have the shared service efforts of many companies. But the reality is that the industry is now more about transformation and about making processes more effective, not just cheaper to run. A sizable BPO, by the sheer fact of having experiences across multiple customers, has a much better view on what works well and what doesn’t. At Genpact we run over 3,000 processes and can leverage ideas across customers and industries, which is almost impossible for a shared service centre to copy.
I think the key step changes have been that the BPO industry has learned how a process should be run optimally for any kind of customer. They are now taking those experiences to the customers to drive transformation. Shared service centres do not benefit from those experiences because they typically focus on one customer and how that company has done it in the past. Maybe they use consultants to improve their service but they don’t have the wealth of benchmarking information and experience across multiple clients, systems, tools and providers that a BPO company can have. So, I think the biggest change is that BPO companies have been learning, maturing and are now using that experience to help their customers, existing and new, transform their processes rather than just copy what the customer has done in the past.
SD: How should BPO providers go about applying their experience and expertise when interfacing with clients?
PH: We go to the customers and tell them about our experience, how it relates to their specific situation and how we can transform their process. So, it’s about:
- doing a good diagnostic of the potential or existing customer
- coming up with specific benchmarks to show how good or how poor their performance is compared to those benchmarks
- offering IT solutions and process solutions developed over time or seen in the market
- working with the clients to improve their processes.
BPO providers need to be able to leverage their organisational experience and use it to help make existing and new clients better at running their process. Some industry players are doing that by using IT as the starting point and being prescriptive about what the process should look like. While we find that processes are 70% the same across all industries, there are still industry and country specifics, and the key to success is understanding the relationship between Level 2 and Level 3 process metrics and the ultimate business outcomes like cashflow or profit. Our starting point is bringing science to process management, using data from our experience and testing it in our design labs. IT solutions can be enablers, but shouldn't be drivers. After we run a diagnostic with the customer, we will be able to tell them exactly what to do to transform their process and then help them implement those changes.
SD: How can clients make relationships work better with BPO service providers?
PH: The key element is to make sure they are properly staffed and have the right level of senior stakeholders or senior members of their company in touch with customers on regular basis. So, they cannot just leave relationship building to the people that own the AP or OTC process on a daily basis. It is important to understand how the BPO provider is doing, and more importantly, to ensure that the senior management on a CXO level takes the time and effort to really map out their outsourcing and offshoring strategy with their BPO partners on a quarterly or a semi-annual basis.
Additionally, companies need to listen to the BPO, who sometimes has a better understanding of the issues and concerns that exist within the customer’s operations. Often, the BPO suffers from the defects within the customer’s organisation. Of course, the process owners on the customer side would rather blame the outsourcer than actually admit to their own bosses that they are not doing a fantastic job, or that there are issues. So, as a result, there needs to be a very good mechanism for the BPO to honestly and objectively raise the issues that exist. The customer needs to create a platform for those things to bubble up and also to drive continuous interaction between the two partners, championing joint improvement meetings, joint LEAN events, joint projects and joint target setting so that the customer doesn’t simply blame the BPO, but also assesses its own organisation.
However, the single biggest item that obstructs a potentially great relationship is when the BPO is not frank enough with the customer or the customer doesn't want to hear what they have to say. In my experience, the BPO often gets to know much more about the customer's upstream processes, and retained organisation and institutional resistance to change than the customer themselves. I think creating a platform for a totally honest exchange of experiences is needed, but many clients are still very defensive about any issues on their side.
SD: From your experience, what is the danger of clients moving too fast or slow in concluding BPO deals?
PH: I think moving too fast is definitely a problem and puts the content of the solution as well as getting the right people on board, at risk. So, it is important to make sure that you take enough time to do solid solution identification as well as good on the job training. Any shortening of those cycle times will often result in a poor process performance.
At the same time, moving too slowly is also a bad option. A lot of the transformation can happen either before or during the transition. If you do too much before the transition you risk the process never actually being transferred, because you will never totally get everything clean – especially if you’re transferring processes from multiple locations. For example, it is much easier to standardise after you have moved everything to the same location. That way, what a company then has to focus on is preparation, especially from a change management perspective.
Moving too slowly also means more potential obstacles within the client’s organisation. A new CEO, a change in structure or many other things could happen if the process takes too long, putting the entire project at risk.
SD: As a former customer of BPO services, what experience do you bring to your new role as the COO of a BPO provider?
I believe the fact that I have been a customer brings a different perspective. I know what the issues are that a customer faces and I can help proactively address some of those issues. For example, I understand the change management efforts that are needed on the client side, and I can both help the customer understand the importance of change management and even give a helping hand using the experts and experience we have in our organisation.