Genpact(www.genpact.com) is around 55% into BPO/Call center/Customer service. Around 30% into package implementation (SAP, Oracle HRMS, Service Now etc..) and remaining 15% in ADM (Application Development and maintenance). Genpact became independent since 2005 and during last decade or so tried hard to get into ADM. What they did? They created disruption-how?

Genpact went to the US and European clients where WITCH don’t want to go – like clients who are having less than 1500(people) kind of IT strength. Genpact hired people from WITCH and also tried to penetrate into the clients where WITCH has presence. Genpact simple offered around 30% discount on the overall rates that WITCH has offered during RFE. But clients were doubtful as they couldn’t find much credentials in Genpact’s past history for delivering successful ADM projects. But then there are some clients who are really looking for quantity over quality. In Q1 2023, Genpact reached out to Shutterfly(www.shutterfly.com) which is now private and owned by Apollo group. Wipro and Infosys were also trying to get that contract but Genpact offered straight 30% down. Client like Shutterfly has some Asian Indians who figured out that they negotiate with Genpact something further down. They told Genpact but based on your past experience-we are not confident whether you will be able to deliver, our IT platform is complex-it takes around 3-6 months for somebody to come onboard etc…Genpact bent backward and stated that till the time Genpact employees are getting onboarded and undergoing Knowledge transition, we won’t charge. There was no CAP on the duration. Smart Shutterfly used this as a tactics and keep on delaying the billing. Shutterfly was having upper hand from day one in this deal. Shutterfly used to micro manage Genpact offshore and onsite resources and provide every 2 weeks – bell curve kind of rating – Red, amber and Green. Whoever is red two consecutive duration (1 month) need to be offboarded. Anybody in Red and Amber won’t be billed. Shutterfly took further advantage that till the time all the team members are NOT green then how come Genpact can bill the client as IT is all about teamwork. Due to very thin margins, Genpact has 5% to 95% ratio i.e. only 5% folks at onsite and 95% at offshore. Moreover, due to margin pressure, Genpact has to supply-scrum master and Project manager and coordinator free of cost.

Constant cost pressure, micromanagement from client, constantly being rated-offshore resources started leaving Genpact or asked to change the project. Shutterfly simply made it clear that unless they see entire team onboarded, they cannot start billing.

As no billing was started, some point of time, high level folks like AVP, VP, Senior managers were being pressurized. They were asked to either start billing or look for some other jobs. AVP, VP, and Senior managers blamed Genpact Sales for this kind of deal. Sales blamed delivery for not able to execute properly.

Shutterfly is based in California. Mostly their folks are either in Phoenix AZ or California which means a good 11+ hours of time difference. Genpact made another bad commitment that offshore will work at least 5 overlapping hours with client. Which means offshore will start working at around 12 noon till 12 midnight (of course much later than that). Shutterfly never changed their way of doing sizing of stories and made sure that their statement “it takes 3-6 months for anybody to understand and be productive” was meant for their employees not for Genpact resources.

Constant burn-up, pressure, micromanagement from client, bi-weekly evaluation (Red, Amber, Green), replace resources with somebody else. After 6 months, Genpact somehow was able to fight that only 20% of their resource are intact (like those started and still there and getting into Amber and Green but never red) – billing should start for them. Shutterfly did the billing only for them and remaining folks – no billing. For good 9-10 months there was no billing from Shutterfly to Genpact.

Due to profit margins, work pressure there was a complete chaos. Team mates start fighting with each other. Shutterfly made sure that their folks don’t lose their folks so they did everything possible to fail Genpact.

Due to profit margins, Genpact constantly look for creative ways to replace senior resources with junior ones (as juniors can be paid less and they can work more hours). End result Genpact reached a point where it didn’t have enough experienced resource so now Shutterfly can easily call their shots.

Shutterfly project started from May 2023 and by the end of Nov 2024, entire onsite was removed (as they are expensive – paid in USD). At offshore all the experienced folks are removed. Offshore strength was reduced by 40%. Genpact only reduced to maintenance and minor enhancement. Shutterfly employees – at least half of them were able to survive this outsourcing. Genpact got India back to pre-1947 era – yes this is modern day slavery.

What this tells? Indian IT can reduce the cost but what is the absolute bottom before they hurt themselves? So many folks who witnessed this Shutterfly phenomena in Genpact would never work in Genpact in their life. Genpact believe that India has got 150 crore people so we don’t care how we treat people because for every terminated employee there are 100 potential candidates.

Indian IT has come down to a stage where it has to really introspect itself. Almost 60%-70% IT folks work in services company. Somewhere in 1995 when India started outsourcing wave-we were charging $18-$20 per hour with $1=40 INR. Billing rate climbed from there to around $35-$50 per hour when $1=55 INR. But then within India competition increased and poor-quality IT engineers started popping up and this billing rate once again is at $25-$30 per hour with $1=85 INR. There is more downward pressure on billing rate and some of the companies like Genpact believed in Indian politician’s way of providing freebies-Kejriwal in Delhi (Genpact CEO is from Northern region only)-but it will flop after some years.

Moreover, it’s not possible to provide 50Lakhs and more kind of salaries in India to anybody who is not contributing at all to the bottom line (Elon Musk phenomena where he showed the world – get rid of middle managers and run the company by only 20%).

So, IT in India has to go thru some severe correction. Improve quality, develop confidence and self-respect, get rid of middle managers who literally does nothing but bootlicking higher ups and exploit juniors and ask for value added work, stop dependence on US, Europe, Australia but ask domestic companies to create IT infrastructure and automation.

Indians are getting tremendous hate all over the world in terms of stealing others jobs and having no civic sense and just populating and polluting the world. This can only be stopped if we start putting our house in order first. India should fast track justice system and any company which exploits or discriminate against worker should be easily punished. If India makes world class living situation in India, then not many people would like to leave India at the first place.

Moreover, this blind rat race of everybody doing Computer Science whether they have the passion or not has to stop. IT salaries should be same as what a regular Civil, Mechanical, Electrical or Electronics engineer can get. IT folks are nothing special.

Whatever is written about Genpact is true for LTI Mindtree also.

Note: My comments about billing rate and USD to INR is only for illustration purpose.