Award-Winner Interview: Patrick Cogny, Genpact Europe

(In May, Genpact Romania won Best Business Process Outsourcing Provider at the 2008 Shared Services Excellence Awards in Sitges, Spain. We caught up with Patrick Cogny, the CEO of Genpact Europe, to ask why he thought his Romanian operation had proved so successful - and what lies around the corner for outsourcing in general...)

SSON: Why was Romania selected by Genpact – what was it about the country, and about the specific Bucharest location, which attracted the planning team?

Patrick Cogny: For us it’s a lot about the talent pool: the cost-effectiveness and range of the talent pool. When we did our due diligence a few years ago we found a population that had very good multilingual skills. Even beyond our employees, the people are very good with languages generally – even with English for example, which is not one of the main languages we serve from there. So the multilingual aspect is very important. And then we need to be in a country we can safely operate from – "safely" meaning in full compliance, being totally ethical and conform to our values. When we were doing our due diligence, Romania was just about to enter the EU and had done a lot of work on everything that supports compliance and ethical constructs; they’d really done their homework on that.

SSON: How independent are Genpact Romania’s operations from other Genpact organisations worldwide? Are there any activities, for example, which are only (or can only be) carried out in your center?

PC: We operate our centers as a fully integrated network, so we try to do exactly the opposite to that. For most of the clients we have, we operate both from the Bucharest center and other global centers. Now [the Bucharest center] is specialised in the multilingual processes, so there’s a logic for what we put there; but very often it works in conjunction with, for example, English-speaking processes hosted out of India. We would offer English-language and continental European languages from the two locations as an integrated process. Now, at the same time we are a pretty high-expertise, high-knowledge-based team, so we’ve invested a lot in growing the local talent and the local expertise; we wouldn’t call that "independent" but we’ve developed local teams of subject-matter experts while remaining part of a global network.

SSON: Genpact Romania won Best BPO Provider at the 2008 Shared Services Excellence Awards in Sitges earlier this year. Why do you think the judges selected you above the rest of the competition?

PC: That’s a question for them… I think we’ve been successful on the market front, so we’re considered to be the – or one of the – largest providers in the geography. And part of that is that we’re celebrating our sixth year in Europe: not that many other providers have invested that early, so it gives us a distinct advantage. We’ve learnt some things the hard way. The second thing is that we’re very customer-centric, generally speaking. The culture that we’re promoting with our teams and that is really the fabric of our whole organisation is to put the customer first – and that can sound like just a good slogan, but I think it is recognised.

Some things we do well, some things we don’t do well, but when something goes wrong we are all hands on deck to tackle it, to fix it – and to fix it to customer satisfaction, not just to the contract. So going beyond the contract – because our contracts are pretty complex, if you just stick to just what’s in the contract you’ll rarely satisfy your clients. You need to go beyond what’s in the contract. Sticking to what’s in the contract might get you good business but won’t get you the client recognition. We think it’s very important to get that, because client recognition is what enables us to grow our business.

SSON: What are the biggest challenges you’ve had to overcome during your time at the helm, and what do you see as being the biggest challenges to Genpact Romania over the next few years?

PC: A couple of things. This industry is extremely immature, it’s a young industry, and very complex – sometimes more complex than it should be, because things have not been strictly defined. That’s one of the biggest challenges: managing that complexity. The second challenge that we’re facing – that everybody’s facing – is managing the talent; it’s a big area of focus because we have to grow the talent in the geographies we’re going to, we have to retain the talent, we have to be an employer of choice. And these are markets and talent pools that overheat very rapidly because they’re not very large: unlike India, which has a huge talent pool, the talent pools for multilingual resources are not very large.

SSON: What impact do you see the credit crunch having on the industry?

PC: Short-term, it’s like everybody else: it’s a huge pressure on our customers and increased stress on the whole system. Medium-term it actually creates a lot of opportunities for us because it puts a big premium on companies restructuring and investing in their core business, and relying on partners to run business processes that are their own core business. So I think it’s actually going to boost the BPO industry going forward.

SSON: And do you think outsourcing in general is going to change significantly over the next few years? I’m thinking specifically about the move from BPO to KPO.

PC: That’s nothing new. We’ve had an Analytics practice for example for a long time, we’ve done LPO for a long time. What happens there is that when you work with a client and that client is happy with the service you’re providing, then the natural evolution is that they give you more and more high-end work. We see that as an integral part of the growth with our customers.

SSON: Do you see KPO being an increasingly important part of your business in terms of proportion of revenue, or the proportion of headcount?

PC: It is already pretty high. I don’t know how much exactly it will grow, but it’s something that will continue to grow for sure. And again the typical cycle with the client is that the client will start with the more transactional processes, and when the client becomes more comfortable with outsourcing in the first place, and the partnership with us in the second place, the partnership grows up the value chain. So that’s not a new phenomenon. It’s something which will continue to be important for us.

SSON: Finally, what advice would you give to a company just starting out on an outsourcing journey, in order to make that journey as smooth as possible?

PC: There are some obvious things. First of all, particularly to Europe, people need to get out of the captive model, which has been, say, 80 per cent of the shared service centers in Europe. There is ample data now which shows that setting up a captive is a very difficult task. Also, contrary to a few years back, there is now a big slate of providers to ensure you can get very competitive offers; you’re never going to be a prisoner of your outsourcing provider. I would encourage every European company to look at outsourcing rather than the captive model, and there’s very well-documented data to explain why.

The main thing is who you select as your partner, obviously, because those processes are not commodity processes; you will have to work with the company you engage with and select as a partner to transform your processes over time. You’ll get the labor arbitrage, you’ll get the initial productivity just by selecting an outsourcing provider, and you’ll get some good commitments; but the real value of the relationship will be how you work together in the long run. SLAs are like hygiene factors; then you start to work on things like how the end-to-end processes really meet your business objectives as a client – because at the end of the day do you really want your provider to work on turnaround time per document, or do you want your provider to help improve your cashflow? Well clearly you want the second and not just the first. You do want the turnaround time improved, but that’s just the starting point.