In India's Outsourcing Boom, GE Played a Starring Role
In September 1989, Jack Welch, then General Electric Co.'s chairman, flew to India for a sales call. He hoped to sell products like airplane engines and plastics to the Indian government.
But during a breakfast meeting with top government advisers, it was Mr. Welch who got pitched. "We want to sell you software," Sam Pitroda , chief technology adviser to the late Indian Premier Rajiv Gandhi, told a surprised Mr. Welch. Mr. Pitroda explained that India needed business for its emerging high-tech sector.
"If I kiss your cheek, what do I get in return?" the GE chairman replied, according to two men who were present.
Fifteen years later, the answer is clear: the global outsourcing revolution.
India today earns more than $17 billion from corporations world-wide seeking low-cost overseas talent to do everything from write software to collect debts to design semiconductors. GE in large measure stoked the phenomenon, playing an unheralded role as the Johnny Appleseed of India Inc. and reaping billions in savings for itself along the way.
GE's technology partnership with India came amid the country's economic opening, which began in 1991 when New Delhi began systematically dismantling tariff and export controls. Indian executives say early investments by GE in India gave their technology and business service sectors crucial credibility and cash when other companies still viewed the country as a risky backwater. Moreover, exposure to Mr. Welch's culture of cost-cutting and efficiency taught them business skills they are now using to compete globally, often against U.S. firms.
"What we learned out of [the relationship with GE] is phenomenal," says S. Ramadorai, chief executive of India's largest software company, Tata Consultancy Services Ltd. Business from GE helped TCS boost its annual revenue to nearly $1.6 billion in the year ended March 2004 from just around $37 million in the early 1990s, says Mr. Ramadorai. Today, GE still accounts for 15% of TCS's overseas revenue and the Bombay company has used the GE relationship to spread into new markets such as China and Eastern Europe.
Publicly, GE has been reluctant to take credit for its singular role. Shipping white-collar jobs overseas has proved controversial in the U.S. Demoralized American workers have had to train their foreign replacements. During the 2004 presidential campaign, Democrats threatened to impose tax penalties on companies that move jobs overseas.
INSIDE TECH
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But the strategy has been pivotal for GE. In 2000, it inaugurated a Jack F. Welch Technology Centre in Bangalore that employs thousands of researchers working on everything from new refrigerators to jet engines. This year, the conglomerate plans to spend about $600 million on computer-software development from Indian companies, according to a recent company report. The company estimates that similar products would cost it as much as $1.2 billion in the U.S.
GE also recently unleashed a big new player in Indian outsourcing. In November, it sold a controlling interest in GE Capital International Services, or Gecis, a company with about 17,000 employees that GE started in 1997 to answer mail from its credit-card customers. With the $500 million sale of the Indian unit to private investors, it will start going after business from other corporations looking to save money.
Helped by the outsourcing boom, India's economy is on track to grow 7% for the fiscal year ending this month. Services now make up roughly half of India's total economic growth, and the revenues from India's technology sector are expected to exceed $28 billion during the current fiscal year, according to Nasscom, a trade organization representing India's high-tech sector.
Indian businessmen and politicians widely credit Mr. Welch and GE for seeding their country's economic boom. "The breakfast meeting was the turning point" for India's information-technology industry, says Jairam Ramesh, a senior economic adviser to India's ruling Congress party who was present at the 1989 meeting.
The first teams of GE executives Mr. Welch dispatched to India set foot in a country where cows meandered freely in the streets and temperatures often rose above 100 degrees Fahrenheit. "I was tasked to make sure nobody got sick," says Sunand Sharma, a former executive with GE's India operations who helped coordinate the conglomerate's initial software partnerships.
GE Medical System's former Asia chief, Chuck Pieper, was among the first to arrive in 1989, seeking an Indian partner to help develop a low-cost ultrasound machine. Because India was still a closed economy protected by steep tariffs and red tape, GE needed a domestic partner to sell its instruments there.
Among Mr. Pieper's first contacts were with Wipro Ltd., a Bangalore software-services company which until the late 1970s largely profited from selling vegetable oil. He says he quickly became enthralled with Wipro's chief executive, Azim Premji -- today India's richest man -- who picked him up at the Bangalore airport in a hulking Ambassador sedan, a 1950s design famed for its rugged endurance but lack of air conditioning or power steering.
Mr. Pieper felt confident that he could get a "good night's sleep" with Mr. Premji as GE's partner. Within a year, the two companies had formed a joint venture to manufacture and distribute an ultrasound machine.
GE's industrial-equipment sales into India didn't take off as anticipated. But executives realized they'd found a cheap source of talented programmers and engineers. GE's Mr. Pieper quickly set aside $5 million annually to hire Wipro to write more software code for GE ultrasound machines and computer tomography, or CT, scanners.
GE's taste for cost-cutting came as a shock to Wipro executives such as 48-year-old Ramesh Emani, who helped manage the software partnership. He says GE soon began playing one Indian software firm against another to drive down costs, demanding constant productivity gains. "GE was very brutal," says Mr. Emani, who now heads a Wipro unit developing software for automobiles and cellphones.
By the mid-1990s, top GE managers began encouraging other units to follow the medical division's lead in India. In some cases, Mr. Welch gave the order directly, says Mr. Pieper, now vice chairman of Credit Suisse First Boston's alternative capital division in New York. "For the same amount of engineering dollars, we were getting 50% more people thinking about stuff world-wide," he says.
A software programmer in India with two to four years' experience makes about $10,000 a year, compared with $62,000 in the U.S., according to Hewitt Associates LLC, a Lincolnshire, Ill., consulting firm.
GE contracts helped underwrite the growth of India's technology sector, Indian executives say. At one point during the 1990s, Wipro's software unit, Wipro Systems Ltd., received 50% of its revenue from GE. At TCS and another leading technology company, Infosys Technologies Ltd., the figures were between 20% and 30%, the companies say. Combined these three firms now account for a third of India's total software exports.
For the fiscal year ended March 31, 2004, Wipro's information-technology businesses generated more than $1 billion in revenue, up from just $15 million in 1989. Its headquarters in Bangalore is an oasis of blue fountains and manicured lawns amidst dirt roads and parched fields. In a December interview there, Wipro's chief executive, Mr. Premji, said GE "helped us understand global companies."
By the late 1990s, GE began turning its attention from simply buying software from India to using the country as a base for data entry, processing credit-card applications and other clerical tasks.
Other companies such as American Express Co. and British Airways PLC had already moved some back-office operations to India. But with Mr. Welch's enthusiastic support, GE eventually went much further, shifting thousands of jobs and untold dollars in operational expenses to India. Savings on backroom operations alone amount to about $300 million a year.
Nigel Andrews, a former top GE Capital executive who oversaw India, says the "light went on" for GE in 1997 as the financial unit was about to create an Indian office to process credit applications for a credit-card joint venture with a local bank.
Mr. Andrews says he realized that India's 100 million English speakers offered an almost limitless pool of inexpensive, educated labor for such tasks. "We started to think, we can do this for the rest of the world," says Pramod Bhasin, 53, a former GE Capital executive who helped create Gecis and serves as its chief executive.
Their first move was to hire away the Indian executive then managing American Express's Indian outsourcing unit, Raman Roy. The new Gecis operation quickly took on a number of assignments for GE's U.S. businesses, such as pulling together mortgage applications. By late 1998, Mr. Roy began patching together a prototype for the company's first international call center in New Delhi.
That effort met with skepticism from U.S. executives, who thought India's telephone and electricity infrastructure was too unreliable. Mr. Roy's team worked with Indian regulators to install reliable phone lines and bought generators to guard against frequent power cuts. They strung bed sheets between cubicles to meet U.S. requirements for privacy of financial data.
"The phone company initially told me there wouldn't be outages for much longer than six minutes," Mr. Roy says. "I told them I couldn't survive an outage of even six seconds."
The venture offered clear economic advantages. An Indian call-center worker earns around $3,000 annually, compared with more than $27,000 in U.S., according to Hewitt, which says its comparison is based on secondary sources. Mr. Bhasin says 8,500 people responded to a newspaper ad for the first 20 positions.
After the call center's first trial in early 1999, GE allocated more than $10 million to expand the operation, as well as other processes. Mr. Roy says former GE Capital Chief Gary Wendt told him: "You don't know the revolution you just created." Mr. Wendt didn't return phone calls seeking comment.
In the U.S., GE's outsourcing push continued to meet resistance. Executives worried about replacing American workers with overseas labor. Mr. Andrews says that managers at GE Capital's credit-card operations feared U.S. clients might take offense at being called by foreigners.
As the cost savings, efficiencies and quality became apparent, GE increasingly came to view outsourcing as a weapon to drive its profits. Mr. Welch challenged his top managers to meet with Indian staff. At GE's annual gathering of top management in Boca Raton, Fla., he gave the stage to Messrs. Andrews and Bhasin, who pitched their operation. "You weren't a fully fledged player if you weren't doing something in India," says Mr. Andrews, who today serves on several corporate boards and as a governor of the London Business School.
GE's Gecis unit eventually employed 12,000 people at two expansive office buildings outside Delhi and a glittering new tower in Bangalore, and several thousand more in other countries. It also started proving more sophisticated services like accounting and analyzing new markets for GE businesses. In 2004, Gecis estimates, it did about $400 million of work, mostly for its parent company.
In November, GE sold 60% of Gecis to U.S.-based investment firms General Atlantic Partners LLC and Oak Hill Capital Partners LLC. The sale has allowed Gecis to begin working for companies other than GE, including Japan's Nissan Motor Co., which recently signed on as a customer.
GE leaders have discovered limits to overseas operations. India's nuclear standoff with neighboring Pakistan in 2002 caused executives to worry the company had become too "concentrated" in the subcontinent and led to a pause in investment, says Scott Bayman, head of GE's India subsidiaries.
Some other GE units have also withdrawn business from India. Last year, GE's health-care business stopped using India to handle customer-service calls, after a GE health-care survey showed that hospitals and physicians "prefer to work with local, U.S.-based customer services." The calls are now being routed to call centers in Wisconsin and Florida. GE's health-care unit still does some work with Gecis.
Alumni of GE's India operations say they aren't worried about a backlash against outsourcing. Indian entrepreneurs are churning out dozens of new technology and outsourcing companies, many based on business models learned from the American conglomerate.
Mr. Roy, the former Gecis executive, founded Spectramind which was acquired by Wipro. Now with 15,000 workers under him at Wipro, Mr. Roy says he's looking forward to competing with his former employers. "Technology companies and outsourcing firms in India need to recognize that if it wasn't for GE, they wouldn't be here today," he says.
通用电气─印度外包业的播种人
1989年9月，时任通用电气(General Electric Co.)董事长的杰克?韦尔奇(Jack Welch)飞到印度参加公司在那里举行的销售推广活动。他希望能向印度政府推销通用的飞机发动机和塑料等产品。
但在与印度政府高级顾问共进早餐时，一位顾问的话让韦尔奇先生大跌眼镜：当时任印度总理拉吉夫?甘地(Rajiv Gandhi)的首席科技顾问皮特罗达(Sam Pitroda)对他说：“我们想卖软件给你们”。他说，印度蓬勃发展的高科技行业需要大量订单。
据两位当时在场的人士回忆说，韦尔奇先生反问到：如果我亲吻你的脸颊，你说我能得到什么回馈呢？
十五年过去了，问题的答案也早已一目了然：那就是来自全球的外包业务。
今天，全球范围的外包业务让印度每年能净赚170亿美元，那些发包的公司希望让劳动力成本低廉的海外专业人才为他们完成各种各样的业务：从编写软件、到催收债款、再到设计晶片，五花八门，无所不包。而当年曾觊觎印度市场的通用电气对这种局面的形成更是推波助澜，扮演了美国传奇人物约翰尼?爱普斯德(Johnny Appleseed)般的播种人角色，而在此过程中，它自己也节省了数十亿美元的资金。
印度政府1991年开始全面解除关税壁垒和出口限制、逐步开放经济，而通用也在此过程中与印度建立了技术合作伙伴关系。印度官员说，开放初期通用在印度的投入给印度的科技和商业服务领域带来了至关重要的声誉和资金，而那个时候，其他外国企业还将印度视为死水一潭的风险之地。而且，从倡导节约成本、提高效率的韦尔奇那里，印度人学到了丰富的经营技巧，这些技巧目前仍是印度企业在全球市场竞争的有力武器，而且经常被用来对付美国企业。
印度最大的软件公司塔塔咨询服务公司(Tata Consultancy Services)的首席执行长拉马多里(S. Ramadorai)说，我们（在与通用的合作中）学到的东西非常有效。拉马多里说，在截至2004年3月的一年时间里，来自通用的业务使塔塔咨询的年收入接近16亿美元，而九十年代初期其年收入只有3,700万美元。目前，通用在塔塔咨询的海外总收入中仍占15%的比例，塔塔咨询也借助与通用的关系扩展到了中国和东欧等新市场。
在公开场合，通用并不愿意因为它在这方面的独特作用而受赞美。在美国，将白领职位外包到海外一直是个很受争议的话题。因外包潮流而深受打击的美国劳动者不得不让位于接班人。在2004年总统大选期间，民主党人威胁说，要对那些向海外外包业务的公司征收额外的税收。
但外包战略对通用却具有举足轻重的作用。2000年，通用在班加罗尔建立了以杰克?韦尔奇的名字命名的技术研发中心，数千名研究人员在这里开发有关冰箱、飞机发动机等产品的新技术。通用电气近期的一份报告称，今年计划斥资6亿美元用于向印度软件企业外包业务。通用估计，这些业务如果在美国国内完成大约需要12亿美元。
去年11月，它出售了在通用金融国际服务子公司(Gecis)的控股股份。通用这家成立于1997年、总部设在新德里的子公司旗下拥有17,000名员工，最初专门回复通用金融信用卡用户的邮件。通用将该公司作价5亿美元出售给私人投资者，随后这家公司将开始为其他希望通过外包节省资金的公司那里获得业务。
随著外包业务的迅猛增长，预计在截至本月的财政年度，印度经济有望增长7%。服务业对印度总体经济增长的贡献率约为50%，而据印度科技业行业组织Nasscom估计，本财年印度科技业的总收入有望超过280亿美元。
印度商界和政界人士普遍对韦尔奇和通用为印度经济的繁荣所作的开创性贡献赞誉有加。印度执政党国大党的高级经济顾问、曾出席1989年那次早餐会的拉米什(Jairam Ramesh)说，那次早餐会是印度信息技术行业的转折点。
韦尔奇派出的第一批管理层团队抵达印度时，看到的是牛群在街道上无拘无束地漫步，气温往往超过华氏100度。通用电气印度业务前任主管苏南德?夏尔马(Sunand Sharma)表示，他当初的使命就是不要让团队成员生病。他帮助协调了通用电气在印度最初的软件合作项目。
GE Medical System的前亚洲业务主管查克?皮珀(Chuck Pieper)是1989年首批抵达印度的管理人士之一。皮珀此行是为了寻找一家印度企业联合开发低成本的超声波仪器。由于当时的印度经济受到高额关税以及繁琐监管规定的保护，通用电气必须找到当地合作伙伴才能在印度销售设备。
Wipro Ltd.是皮珀首批接洽的印度企业之一，这是一家总部在班加罗尔的软件服务企业，而直到上世纪70年代之前，该公司的主要利润来源一直是植物油销售。皮珀表示，Wipro的首席执行长阿齐姆?普莱姆基(Azim Premji)──如今是印度首屈一指的富豪──亲自到班加罗尔机场接他。见面后不久，他就被普莱姆基的个人魅力所征服了。普莱姆基为了接皮珀特地从大使馆借来了一辆笨重的轿车，这是一款上世纪50年代设计的车型，以皮实著称，但没有空调和转向助力。
皮珀认为，普莱姆基是一个可以让他高枕无忧的合作伙伴。之后不到一年，双方便组建了一家合资企业，制造并经销超声波仪器。
通用电气工业设备在印度的销售并没有像预期的那样迅速增长，但公司管理人士意识到他们已经找到了一个获得成本低廉、但却才华横溢的程序员和工程师的途径。皮珀迅即决定每年拨出500万美元的外包预算，雇用Wipro为同其超声波仪器和电脑断层摄影扫描仪(俗称CT)编写更多的软件代码。
通用电气致力于削减成本的做法深深地触动了拉姆什?艾曼尼(Ramesh Emani)等Wipro的管理人士。他表示，通用电气不久之后便用一家印度软件企业来逼迫另一家印度软件企业，籍此来压低成本、不断要求提高生产率。艾曼尼表示，通用电气在成本削减方面非常残酷无情。艾曼尼现在是Wipro汽车和手机行业软件开发部门的主管。
到上世纪90年代中期时，通用电气的高级管理层开始鼓励其他部门效仿医疗部门在印度的业务开拓模式。现在是瑞士信贷第一波士顿(Credit Suisse First Boston)另类资本部门副董事长的皮珀表示，有几次甚至是韦尔奇直接下令；同样一笔资金如果投向印度，公司就可以多招50%的员工。
伊利诺伊州咨询公司Hewitt Associates LLC提供的数据显示，在印度，一名具有2至4年工作经验的编程员的年薪约为10,000美元，而在美国具备同样工作背景的编程员年薪则高达62,000美元。
印度管理人士称，通用电气的外包合同也带动了印度科技业的发展。上世纪90年代期间，Wipro的软件子公司Wipro Systems Ltd.一半收入都来自通用电气。TCS和另一家印度顶级科技企业Infosys Technologies Ltd.也各有20%-30%的收入来自通用电气。这3家企业的软件出口产值如今占到印度软件出口总产值的三分之一。
截至2004年3月31日的财政年度，Wipro信息技术业务部门的收入超过10亿美元，而1989年时仅有1,500万美元。该公司位于班加罗尔的总部就有如沙漠中的绿洲一样醒目：蓝色的喷泉和平整的草坪与周围肮脏的道路和焦裂的土地形成了鲜明的对比。该公司的首席执行长普莱姆基去年12月在接受采访时表示，正是与通用电气的合作才让该公司了解到什么是全球性企业。
到上世纪90年代末期的时候，通用电气已经不再局限于从印度采购软件了，而是把印度作为了数据录入、信用卡申请处理及文案工作的外包基地。
美国运通(American Express Co.)、英国航空(British Airways PLC)等公司也把一些后台业务转移到了印度。但正是由于韦尔奇的大力支持，通用电气的外包业务开展得更为深入，不但将数千个工作岗位转移到了印度，而且还为此投入了数目不详的运营资金。仅外包后台业务一项每年就为通用电气节省了约3亿美元的资金。
曾主管印度业务的通用金融(GE Capital)前任高级管理人士尼格尔?安德鲁斯(Nigel Andrews)表示，1997年通用金融计划在印度设立一个办事处，与当地银行组建一家信用卡合资企业，负责处理信贷申请时，他就看到了“希望的曙光”。
安德鲁斯说，他意识到印度英语娴熟的人口有1亿之众，几乎是一个取之不竭的受过良好教育且廉价的劳动力源泉，足以满足这类工作所需。“我们开始考虑，我们可以为世界其他地区提供同样服务，”普拉穆德?巴辛(Pramod Bhasin)说。巴辛现年53岁，曾在通用金融担任高级管理职务，参与了创建通用金融国际服务子公司的过程，现任该公司首席执行长。
他们的第一步是从美国运通挖走负责印度外包业务子公司的拉曼?罗伊(Raman Roy)。在他的带领下，通用金融国际服务子公司的业务迅速发展，很快就开始为通用电气的各项美国业务提供服务，例如收集整理所有的抵押贷款申请。到1998年年底，罗伊已经开始在新德里著手筹备通用电气第一个全球性呼叫中心的原型。
但他的努力却遭到美国高层管理人士的质疑，他们认为印度的电话系统和电力供应基础设施很不稳定。罗伊于是同印度监管机构合作，安装了稳定可靠的电话线路，还购置了发电机以备随时停电之需。他们还在接听电话的小隔间当中挂上床单，以满足美国方面对保护金融数据隐私的要求。
“电话公司起初告诉我业务中断不会超过6分钟，”罗伊说，“但我跟他们说，那怕只有6秒钟都会要了我的命。”
这项尝试带来了显著的经济效益。Hewitt根据二手资料得出的数据显示，印度呼叫中心一名员工的年薪只有大约3,000美元，而美国员工要超过27,000美元。巴辛说，公司在报纸上登出最初20个职位的招聘广告后，收到了8,500人的应聘资料。
呼叫中心在1999年年初试营业，此后通用电气拨出逾1,000万美元扩大业务，还增加了新的业务内容。罗伊说，通用金融前任主管格雷?温德(Gary Wendt)曾向他说，“你还不明白自己刚刚开启了一场怎样的革命。”温德没有答复记者就此寻求评论的电话。
但在美国，通用电气推动业务外包的做法仍然遇到重重阻力。公司高级管理人员对海外员工取代美国职员工作机会的趋势深感担忧。安德鲁斯说，通用金融信用卡业务部门的的经理们担心美国客户接到外国人打来的电话时会感到不快。
随著成本削减的逐步深化，工作效率和质量的提高也越来越明显。通用电气也逐渐把外包看作推动利润增长的利器。韦尔奇也不断鼓励、敦促高级经理会晤印度员工。在佛罗里达州博卡拉顿召开的通用电气管理层年会上，韦尔奇将安德鲁斯和巴辛请上了台。“如果没在印度工作过，你就算不得是一个全面的商业人才，”安德鲁斯在众目睽睽之下如此断言。现在他在好几家公司的董事会任职，还兼任伦敦商学院(London Business School)理事。
通用金融国际服务子公司最终坐落在德里郊外的两栋豪华办公大楼，在班加罗尔还拥有一座闪闪发光的新塔楼，招募了12,000名员工，其他国家还有上千名员工。现在已经开始向通用电气的其他业务部门提供更为复杂精密的服务，比如会计服务和新市场分析等。据通用金融国际服务子公司估算，2004年业务额约为4亿美元，绝大多数都来自通用电气。
去年11月，通用电气把通用金融国际服务子公司60%的股权出售美美国投资公司General Atlantic Partners LLC和Oak Hill Capital Partners LLC。此后通用金融国际服务子公司开始向其他公司提供服务，而不仅限于通用汽车了。最新签约的一家客户是日本的日产汽车(Nissan Motor Co.)。
通用汽车的领导层已经发现了海外业务的局限性。负责通用汽车印度子公司业务的司格特?拜曼(Scott Bayman)说，2002年印度和邻国巴基斯坦的核竞赛让公司管理层担心，业务也许过于集中在印度次大陆了，投资一度因此中断。
通用汽车的其他业务部门也在撤离印度。去年，通用电气医疗保健业务不再通过印度处理客户服务呼叫，之前该部门的调查显示医院和医生“更愿意同当地的美国客户服务人员合作”。现在，这些客户服务呼叫被接转到威斯康辛州和佛罗里达州，但健康护理子公司同通用金融国际服务子公司仍有部分业务往来。
通用汽车印度业务职员们表示，他们并不担心外包的退潮。印度企业家们在技术和外包上不断创新，许多都是建立在从美国大企业集团学来的业务模式上。
通用金融国际服务子公司的前任高级管理人士罗伊创办了Spectramind，后来被Wipro收购。现在他为Wipro工作，手下有15,000名员工。罗伊说，他期待著有朝一日能同前任雇主同台竞技。“印度的技术公司和外包公司都要承认，如果没有通用电气，就不会有他们的今天。”他说。
