Genpact is about to seal a major BPO deal with automotive component maker Delphi, subject to approval by the US bankruptcy courts.
As part of its plans to exit bankruptcy protection, Delphi will cut 650 finance jobs in the US and Europe and shift a large part of its finance and accounting function to the Indian-based BPO vendor, spending a total of up to $220m over the next 88 months. Delphi said the plans could save it $150m over the term of the proposed contract.
Until a few years ago, major finance and accounting outsourcing contracts had been the preserve of western technology firms such as Accenture, Capgemini, and IBM. But as in application development, cheaper offshore labor allowed Indian players to get a foothold in the market.
The move by Delphi to outsource processes while under bankruptcy protection is the opposite of Delta Air Lines’ strategy. It has brought back in house some processes from its agreement with IBM Daksh, and has also renegotiated its human resources deal with Affiliated Computer Services to reduce its scope.