Human Resources: Genpact: Going Beyond Process Efficiency to Process Effectiveness

NEW YORK, May 18, 2010 – Genpact (NYSE: G), a global leader in business process and technology management, found in a recent study of more than 150 senior finance executives that corporations were able to effectively impact business performance during the economic downturn by focusing on excellent process execution – a trend that is expected to continue as businesses emerge from the recession. The Genpact-sponsored survey titled, “Going Beyond Process Efficiency to Process Effectiveness: The CFO’s Role in Standardizing Global Processes and Improving Business Outcomes,” was conducted in the first quarter of 2010 by CFO Research Services, a division of CFO Publishing LLC.

The survey, which polled senior finance executives in North America, Europe and Asia to examine their views on enterprise-wide process effectiveness and its relation to improving business results, revealed, among other things, that nearly 60% of the finance executives believed that the downturn forced their company to improve processes – a clear indication that enterprise processes play a key role in company performance and therefore cannot be a low priority. Similarly, 78% of finance executives believe that their companies’ performance can benefit either moderately or substantially from further process improvements across a wide range of functional areas.

The high-level conclusions from this study validate Genpact’s experience in the business process management market:

· Process, as a lever for business performance, is still underutilized.

· Organizational silos restrict the enterprise-wide view, leading to significant value leakage through the organization.

· A focus on process efficiency versus overall effectiveness can leave a large amount of value unaddressed.

· Complexity and diversity of processes across a large enterprise, coupled with unclear inter-linkages between process drivers and business outcomes, restrict organizational priorities.

Most respondents indicated that over the next 24 months their companies should target solid improvements in the areas of finance & accounting (78%), non-finance administration (74%), sales & marketing (72%), operations (80%), and management & strategic planning (81%). Approximately 58% place a high priority on process improvements over the next two years, specifically around making them faster, less costly and requiring less rework.

Another finding reveals that metrics are critically important whether they are analyzed by internal or external staff. Many companies, especially those with less than $5 billion in revenues, depend often on their own staff instead of external resources to improve processes. They consider both internal and external market benchmarks to be valuable in these process improvement efforts. Finance executives also believe that their functions contribute significant value when they develop relevant metrics to help guide their peers’ process improvement projects.

“It’s evident from these survey results that finance executives are now more focused on making sure that their internal processes are not only efficient, but effective enough to positively impact company performance,” said NV ‘Tiger’ Tyagarajan, Chief Operating Officer of Genpact. “However, with huge variations in performance and a surprising lack of improvement metrics tied to company performance or comparative benchmarks; they have no means to know how good their processes are or could be, and therefore, may lack a roadmap for getting to best-in-class. It is essential that they also turn to the services of third party business process management experts who are much more widely exposed to process execution across multiple organizations and can offer insightful best practices. These experts can help companies implement metrics and frameworks that go beyond measuring process efficiency and realize the actual process effectiveness – the direct and tangible impact on business performance and outcomes.”

Finance executives also believe they can work with their colleagues effectively to break down organizational silos and overcome the organizational inertia that can impede enterprise-wide process improvement. Over 90% of respondents cite organizational silos, and 85% cite resistance to change, as a barrier to process improvement. When asked what kinds of change management capabilities the finance function is best able to provide for process improvement initiatives outside of finance, respondents most often select finance’s ability to work with other groups and its enterprise-wide knowledge of the business.

Finally, finance executives believe that further gains can be made managing the complexity and diversity of processes across a large enterprise. Nearly 50% of the respondents say that process complexity or the lack of standardized processes is frequently a problem at their companies. They recognize the benefits for company performance of streamlining processes, improving connections between different processes, and improving communication between different groups.

Survey Details

The breakdown of the survey respondents are as follows:

Company size – 13% are from companies with annual revenues of more than $20 billion, 19% are from companies with revenues of $5-20 billion, and 68% are companies with revenues of $500 million to $5 billion.
Title – 27% of respondents hold the title of chief financial officer, 21% serve as director of finance, 15% are controllers, and the rest serve in other senior management capacities.
Industry – 19% of respondents are in the financial services/real estate/insurance industries, 16% are in the automotive/industrial/manufacturing industries, 11% are in health care, and the remaining 54% percent represent other industries such as retail, consumer packaged goods, food, chemicals, media, telecommunications, aerospace, technology, transportation and pharmaceuticals.
Geography – 74% of respondents are from North America (U.S., Canada and Mexico), 15% are from Middle East and Asia, 9% are from Europe, and the remaining few are from Latin America and Australia/New Zealand.

To see the detailed findings of the survey, please visit www.cforesearch.com.

About Genpact

Genpact is a global leader in business process and technology management, offering a broad portfolio of enterprise and industry-specific services. The company manages over 3,000 processes for more than 400 clients worldwide. Putting process in the forefront, Genpact couples its deep process knowledge and insights with focused IT capabilities, targeted analytics and pragmatic reengineering to deliver comprehensive solutions for clients. Lean and Six Sigma are an integral part of Genpact’s culture and Genpact views the management of business processes as a science. Genpact has developed Smart Enterprise Processes (SEP^SM), a groundbreaking, rigorously scientific methodology for managing business processes, which focuses on optimizing process effectiveness in addition to efficiency to deliver superior business outcomes. Services are seamlessly delivered from a global network of centers to meet a client’s business objectives, cultural and language needs and cost reduction goals. Learn more at www.genpact.com.