Can Genpact Pivot from Operations Execution to Digital Innovation?

Like so many of its peers in the business services industry, Genpact has undertaken a brand refresh, complete with new logo and “Transformation Happens Here” mantra. If one thing is resoundingly clear from Genpact leadership, it is the acknowledgement that business clients have followed consumers’ lead and have raised the bar for their expectation experience. But, clients don’t yet see Genpact as an experience-focused company. Over an Analyst Day event in November, HfS heard Genpact’s leadership team talk about its shift in brand perception toward business outcomes such as customer experience. We believe that while Genpact is making the right moves to step away from its legacy business, it will be challenged with the pace of change that the emerging digital market is demanding.

Acquired Design and AI Capabilities Will Significantly Advance the Digital Footprint

The most recent acquisition of TandemSeven aims to fill Genpact’s gap in user experience design expertise, bringing a customer or user-focused mentality to the service provider’s portfolio. This primarily B2B-focused organization’s client base matches up well with Genpact’s, seemingly offering some cross sell opportunity as well as growth from each company’s existing clients. TandemSeven might be best known for its work with Bloomberg, for which it designed a mobile application from end to end. TandemSeven’s leaders described all of its work with various banks, insurance companies, auto manufacturers, and high-tech companies using its “We Re-Imagine Customer Experiences” mission statement. While its messaging seems less edgy than other UX design companies we have encountered, the more conservative style may be a reflection of what works well with its B2B client base.

TandemSeven’s best differentiator is its combination of design expertise with the UX360 platform to keep data intact while executing journey design. It seems that marrying this with Genpact’s analytics expertise could be a complementary fit. It’s still early days, but it seems both companies recognize the partnership’s potential and are working together to capitalize on their complementary capabilities—the challenge will be to avoid the potential culture clash that can result between Genpact’s structured execution and the more creative culture and emotional aspects of design thinking.

Genpact is also making progress on integration with its other horizontal acquisition, RAGE Frameworks, following the March 2017 acquisition. Leadership shared examples of AI-focused automation that targets some of its clients’ biggest, most complex issues. In one case, the RAGE financial framework LiveSpread suite brought in various forms of disparate information (for example, ingesting hundreds of articles sourced online) to test the credit-worthiness of companies, using AI to identify risk factors and assign credit worthiness scores to help lenders with their risk management.

As Joy Dasgupta, former GM of RAGE and now SVP of digital at Genpact, described, AI is “the tip of the iceberg” in the enterprise; the underlying processes and data will determine AI success at achieving business outcomes. Enterprises are increasingly focused on incorporating AI, real-time data, and RPA into their operations strategy; 36% see investment in AI and machine learning technologies as “mission critical” (see Exhibit 1). These two acquisitions address these market changes. At HfS, we refer to these transformation agents as the Triple A Trifecta framework, which places value at the intersection of RPA, Smart Analytics, and AI. The capabilities that these acquisitions bring will be critical to supporting the kind of focus and investment clients are expecting; while RAGE provides the AI capability, TandemSeven’s design focus will help to position Genpact as presenting an integrated solution that includes the critical trifecta building blocks.

Exhibit 1: How critical are the following C-Suite directives to your operations strategy?

 Source: “State of Automation 2017”, Sample: Enterprise Buyers = 400

Genpact’s Own Transformation Will Hinge on Its Ability to Sell Its Image As a Digital Consulting Partner

Genpact leadership is ambitious about using its consulting capabilities to enable these transformations; currently, 20% of its revenues is now considered “transformational” consulting, with a goal of making that 40% by 2020. The challenge is the perception of Genpact as an execution partner rather than a consultative and strategic partner with design expertise. As the HfS Buyer’s Guide on Genpact states, the service provider is “perceived as a safe pair of hands, a delivery engine, and known for cost savings of legacy IT. It is less known as a thought leader. Genpact currently lacks the scale and speed with respect to innovation.”

Genpact’s new logo features an animation that rearranges existing fragments to create a capital G. It is symbolic of this journey of integration that the service provider has started, taking stock of its strengths in operations and industry experience and analytics, its acquired capabilities around AI and design, and the needs of the digital market it is hoping to capitalize on. It will take more proof points to see how these capabilities come together consistently across Genpact’s existing client base–  with Cora (Genpact’s AI based platform) from a technology standpoint and business-outcome delivery from a performance standpoint.

Genpact’s focus on specific business challenges in select industries (e.g., claims and underwriting in insurance) is part of this strategy. While many of Genpact’s competitors have sought to broaden their portfolios horizontally and vertically, the 20-year-old service provider has instead decided to double-down on the areas where it has the most expertise and penetration, pursuing acquisitions that complement those areas. With the highly specialized industry challenges that it is focusing on, Genpact stands to potentially alienate some clients with competing business objectives. This further supports feedback HfS often receives from services clients for industry-specific work, who state that their service providers may be “innovating,” but in areas that are not relevant or a priority to them. Genpact will need to balance its investments to tackle the wide range of business challenges that its clients are facing today, especially as it sets itself up to deliver digital consulting.

Bottom Line

These recent acquisitions and messaging are starting points for the work required for the expertise and vision needed to reinvent Genpact’s story. The forthcoming client success stories around tangible digital transformation will make or break Genpact’s ascension from operations into digital consulting and solutions in the next 12 to 18 months.