In March this year, countrys largest BPO Genpact signed a seven year contract to provide key end-to-end processes for specialty lines to insurance company Ironshore. This is the biggest deal for Genpact in 2011 and its customer Ironshore decided on Genpact after considering all the other vendors it could possibly outsource the deal to and it took one year for the company to make this decision.
Mitch Blaser, chief financial officer and chief operating officer at Ironshore says, We started analysing that we should outsource our work in the middle of 2010. In the first six months of 2011, we were studying the industry and talking to different partners like Accenture, Capgemini and the Tatas. PWC was our consultant partner to make the decision on the deal. Then we went on a trip to visit the facilities of vendors. Mitch adds that it was in August 2011 that the company decided to outsource to Genpact and the deal was signed in December 2011.
Genpact is neck and neck with TCS BPO and Capgemini when it comes to the banking financial services and insurance (BFSI) vertical. Over the years, the vertical has become quite strong for Genpact courtesy smart acquisitions and big deals in the kitty. Mohit Thukral, senior vice-president and global business leader at Genpact mentions, This is the first time that Genpact is providing such an in depth combination of technology platform, technology support and analytics to a customer in a package. Insurance is nearly 20% of our total BFSI vertical. These deals take 9 to 12 months because they have a big impact on people, process and cost of an organisation.
Even Keshav Murugesh, CEO at WNS Global Services feels, Earlier, we closed our deals within 8 to 9 months, but now it is taking 2-3 months higher time for customers to take decisions. However, this does not mean less business for BPO companies.
It is just that the consumers are getting cautious.
Salil Dani, research director global sourcing, Everest Group analyses the market situation, Customers want to outsource, but to the right vendor. Thus, while the deciding period was 8-9 months earlier, now negotiations even stretch to more than a year in some cases. This is across verticals like BFSI, manufacturing, retail or healthcare. Reasons for this could be slowdown in the activity of businesses and competitiveness among different vendors.
Swami Swaminathan, CEO & MD, Infosys BPO partially agrees to the whole situation, There may be temporary aberration in decision making, but once the deal is signed, the implementation happens faster. He explains that earlier while the deals were signed at the quicker pace, it took longer to implement the services.
But now, as BPOs offer higher value services, the implementation is faster.
Analysts opine that as BPO players now offer higher end services like analytics, technology platforms along with vanilla services, customers are taking time to realise the value and return on investment of this portfolio offering.