Westpac Banking Corporation has selected business process outsourcing giant Genpact to demonstrate its abilities to run human resources and back office services, as a precursor to plans to outsource work in the coming months.
The Australian Financial Review revealed in June that the bank had gone to market to seek proposals from outsourcing providers for more efficient back office functions for its HR operations. Genpact has been selected as the preferred supplier, after pitching against other existing Westpac suppliers Accenture and Infosys.
Sources with knowledge of the plans told the Financial Review that the bank has not yet signed a contract with Genpact for the wholesale outsourcing, but has instead agreed with the company that it will perform a trial to prove itself, with a view to ramping up the program should it prove successful.
Both Westpac and Genpact declined to comment on the agreement, but sources said the bank was looking to move quickly and jobs would soon be moved offshore.
It is understood Genpact will initially provide 50 staff to Westpac in areas related to learning and development, but that the company will also conduct a consultancy review of the HR function to look at what outsourcing would be possible more broadly.
Other services that could be outsourced include workforce administration, payroll functions, benefits administration and some technology systems to manage and analyse employee data.
The contract would represent a major win for Genpact, which was originally started as a business unit in General Electric in 1997. It has embarked on a plan to expand its presence in Australia, hiring more local staff and targeting the financial services sector.
When asked about the plan, independent outsourcing expert Mohit Sharma of Mindfields said it could prove to be a successful move for Westpac.
“If Westpac go with Genpact it is a rational choice as they have a consultative approach towards outsourcing, which is the most important evaluation parameter for the selection of a vendor for a sensitive process like HR,” Mr Sharma said. “Other Australian organsiations who have outsourced HR processes to pure HR vendors are struggling or not getting value beyond myopic cost arbitrage.”