How GE Healthcare Saved 20% on Operational Costs by Outsourcing Back-Office Processes to Genpact
GE Healthcare is a multinational medical technology and digital health company headquartered in Chicago, Illinois, United States. It is one of the world's leading providers of healthcare technology, including medical imaging equipment, diagnostic reagents, and patient monitoring systems.
In 2004, GE Healthcare was a $18.3 billion business with over 50,000 employees worldwide. The company was facing a number of challenges, including rising costs, the need to focus on core competencies, and inefficient processes. Jeff Immelt, the then-CEO of General Electric (GE), was a strong proponent of outsourcing and firmly believed that it was the best way for GE to achieve its cost savings and efficiency goals. In his search for the ideal outsourcing destination, India emerged as the most attractive option, and this was due to the following reasons:
The rising cost of labour in the United States.
The large pool of skilled labour in India.
The strong infrastructure and supportive government environment for BPO businesses in India.
The time zone compatibility between India and the United States.
Immelt decided to outsource GE Healthcare's backend processes like customer service, order processing, and accounting to India’s Genpact,
Benefits of Outsourcing for GE Healthcare
Reduced operational costs: GE Healthcare was able to reduce its operational costs by 20% as a result of outsourcing. This was largely due to the lower labour costs in India and the economies of scale that Genpact was able to achieve.
Improved efficiency and productivity: Genpact was able to help GE Healthcare improve its efficiency and productivity by streamlining its processes and implementing best practices.
Increased focus on core business: GE Healthcare was able to focus on its core business of providing healthcare solutions by outsourcing its non-core back-office processes.
Access to global talent: Genpact has a global network of delivery centres, which gave GE Healthcare access to a pool of talented and experienced professionals.
How Genpact Helped GE Healthcare Reduce Operational Costs
Process optimization: Genpact streamlined GE Healthcare's back-office processes and implemented best practices. This led to significant reductions in processing times and costs.
Automation: Genpact automated a number of GE Healthcare's back-office tasks, which further reduced costs and improved efficiency.
Shared services: Genpact leveraged its shared services model to provide GE Healthcare with cost-effective services.
Offshoring: Genpact offshored some of GE Healthcare's back-office processes to its low-cost delivery centres in India.
The decision to outsource to India turned out to be a major turning point for GE Healthcare and for the outsourcing industry as a whole. It showed that outsourcing could be a successful strategy for large corporations to reduce costs and improve efficiency.