Wachovia (Charlotte, N.C.; $493 billion in assets) signed a seven-year business-process outsourcing deal with Genpact (Luxembourg; New York; and Gurgaon, India). While terms of the deal were not disclosed, the consequences certainly will be felt within the bank as Genpact finds ways to make a bottom line impact. "We have a group of Six Sigma black belts and process black belts 'in the stream' with Wachovia, working with their teams and identifying the right processes to decouplewhich ones to move first, which to move second, what kind of sequencing would make senseand really getting prepared for alignment of processes," says Tiger Tyagarajan, executive vice president, Genpact.
Genpact originally was established in 1997 as GE Capital International Services, a captive subsidiary of GE Capital, to handle tasks such as credit card application processing, collections and accounting for GE's financial services businesses. At the end of 2004, GE divested 60 percent of the firm to private equity investors to put the former captive company in a better position to pursue new business from outside firms. According to Tyagarajan, the Wachovia deal is Genpact's 17th since branching out from GE, and it is the company's fourth deal in financial services, which comprises about 40 percent of Genpact's book of business, including the work that it still does for GE's financial services divisions.
As a GE creation, Genpact was an early beneficiary of Jack Welch's famous embrace of Six Sigma process methodology. "We had the real advantage of hiring our first individuals into the company and turning them into Six Sigma nerds," quips Tyagarajan. "Every employee is Six Sigma-trained."
Building such a shop from the ground up has its advantages relative to entrenched operations, Tyagarajan adds. "If you have 40,000 employees and you have to convert them into Six Sigma, that takes a long time," he says.
Now, Genpact's 16,000 employees in India, China, Hungary, Romania and Mexico will begin to drive Six Sigma through Wachovia's operations. "We will work together over a seven-year period, identify a range of processes and move them from Wachovia to a dedicated facility that we will run for them in India," says Tyagarajan.
Though Wachovia is pursuing cost cutting, including head-count reduction, the deal wasn't about "moving work," claims Tyagarajan. The goal of the venture, he says, is "to drive process improvement in processes that are actually pretty well-run, and to try to take them to the next level." --Ivan Schneider