Outsourcing Vendor Genpact Makes Mexico a Passage to India

India-based outsourcer Genpact has greatly expanded its Mexican operations in the last year, focusing on lower-end business process outsourcing instead of IT services work. The former GE unit calls Mexico a gateway to India offshoring and a "nearshore" alternative for BPO and call center work.

By Stephanie Overby
Mon, November 05, 2007

CIO — In September, Genpact opened its new Latin American headquarters in Ciudad Juárez, Mexico, just south of the United States border from El Paso, Texas. The sprawling, custom-built 125,000-square-foot facility on the north side of town represents a major expansion of the New Delhi, India-based outsourcing provider’s Mexican operations. This new facility brings Genpact’s Mexican employment to 2,500 people at three sites. The company had $613 million in revenues in 2006, employs 29,400 worldwide.

Genpact (the company was GE Capital International Services before becoming an independent company in 2005) has had a presence in Mexico as a provider of business process services for 15 years. So with MexicoIT (an organization founded by the Mexican government in partnership with local technology trade groups), marketing Mexico as “a world-class” alternative to India for IT outsourcing, and increased interest on the part of U.S. companies in “nearshoring,” one might assume that Genpact’s expansion is part of a ramp-up to begin offering more sophisticated IT services to global customers south of the border.

But Juan F. Ferrara, Genpact’s chief operating officer for the Americas, says it isn’t so. Genpact’s Mexican operations remain strictly focused providing low-end, high-volume BPO services like back-office accounting, document management and call center services. “At Genpact, we do IT services out of India, not Mexico,” Ferrara recently told CIO Senior Editor Stephanie Overby.

In an interview with CIO.com, Ferrara also explained the benefits of the Juárez operation as a gateway from the U.S. to India, the challenges of the Latin American IT services market and Genpact’s expansion strategy.

Stephanie Overby, CIO.com: You’re originally from Mexico and have been helping multinational companies set up shop locally for more than 25 years. How has the local market for IT and business process services changed over time?

Juan F. Ferrara, Genpact’s chief operating officer for the Americas: I used to work as part of McKinsey’s Business Technology Office (BTO). One of the service lines we offered was helping companies develop sourcing strategies for their global operations. The majority of those conversations were with U.S. companies. Very few local Mexican companies were looking at outsourcing, except for a few airlines and insurance companies looking at outsourcing their data centers for efficiency gains.

I opened up McKinsey’s Monterrey operations in 1991. They’d had an office in Mexico City but wanted to open one in Monterrey, where most of the large, industrial companies were.

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