Indian BPO Buys GE Back-office in Guatemala

Indian business process outsourcer Genpact said Monday that it has acquired a back-office services delivery center in Guatemala City from GE Money, a division of General Electric (GE).

Genpact, which already has a delivery center in Mexico, said that the newly acquired facility in Guatemala will extend Genpact's presence in the region, and increase its ability to provide business process services in English as well as in Spanish. Genpact will provide services to GE Money from the facility, it added.

A number of Indian outsourcers, including Tata Consultancy Services and Infosys Technologies, have set up operations in Mexico and South America to offer near-shore delivery of services and also services in Spanish to its customers in the U.S.

The new delivery center will initially accommodate 700 staff with the capacity to increase to 2,000 staff, Genpact said.

The strategy of having wholly owned subsidiaries delivering services is not working for most firms, said Sudin Apte, senior analyst at Forrester Research, of GE's decision to sell off the delivery center in Guatemala City. In the light of the economic downturn and monetary pressures in the financial and mortgage markets, it does not make sense for a company to stay invested in its own facility when the same work can be done by an outsourcer, possibly with incremental benefit, Apte added.

A number of companies are selling their back-office operations to independent service providers. Genpact was the Indian back-office subsidiary for GE Capital, until it was spun off in 2005 as an independent BPO company. In July, British insurance company Aviva sold its back-office subsidiary in India and Sri Lanka to WNS Holdings, a business process outsourcing company in Mumbai that provides back-office services to Aviva.

Genpact operates service delivery centers in India, China, Hungary, Mexico, the Philippines, the Netherlands, Romania, Spain and the U.S.