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Genpact Acquires Barkawi Management Consultants, Targets 25%+ Growth in Supply Chain Management

 

SCM is one of Genpact’s “invest-to-grow” service lines, where the company is looking to make disproportionate investments and scale up the business: in this case, to become one of the top two global supply chain transformation services vendors. In its “invest-to-grow” businesses, Genpact is looking to achieve at least twice the level of revenue growth achieved by Genpact overall and to do this by investing in complementary competencies rather than scale.

Genpact identified Barkawi Management Consultants, part of the Barkawi Group, as a potential target by working alongside the company (from now on referred to as Barkawi) within in its client base. Discussions began in late 2017, with the deal expected to close this month, August 2018, once the regulatory processes are complete.

The acquisition of Barkawi provides a strong platform for Genpact to deepen its supply chain consulting practice, achieve a revenue balance in SCM between transformation consulting and managed services, strengthen its relationships and expertise in key supply chain technologies, and strengthen its presence in Europe.

Deepening Supply Chain Consulting Capability

In the area of SCM, Genpact had existing capability in planning & inventory optimization & demand analytics and a couple of large managed services contracts. However, the company had limited front-end consulting capability, with just 30 supply chain management consultants. Although Genpact was organically adding SCM consultants, this relative lack of front-end expertise was limiting its ability to handle a significant number of concurrent prospect conversations. The acquisition of Barkawi brings 180 SCM consultants to Genpact, enabling the company to have not only a greater number of simultaneous client and prospect interactions but also to have deeper and more end-to-end conversations across more SCM transformation dimensions (including operating model transformation, technology transformation, digital transformation, and customer-oriented transformation).

Prior to the acquisition, Barkawi had ~200 consultants, with the bulk of these (~180) in the U.S. (principally in a center in Atlanta) and Europe (principally in a center in Munich). These are the operations being acquired by Genpact. The remaining Barkawi personnel were based in the Middle-East and China, which are not markets where Genpact actively generates business, and these personnel will not be transferring to Genpact.

Barkawi principally employs two types of consultant:

  • Management/process consultants active in supply chain and aftermarket services
  • Digital/technology consultants where the larger part of the practice consisted of assessment/implementation/optimization projects around partner technologies such as Kinaxis and Anaplan.

The U.S. business was slightly larger than the European business and employed a majority of personnel active as technology consultants, while the European business employed a majority of its personnel in management/process consulting.

Achieving a Balance between Transformation Consulting & Managed Services

Barkawi will be combined with Genpact’s consultants into a single SCM consulting service line, giving a broadly balanced mix across management/process consulting and technology consulting. This global service line will be headed by Mike Landry, previously head of Barkawi Management Consultants’ U.S. entity, and will be organized into supply chain consulting, aftermarket consulting, and technology, with these horizontals matrixed against the following verticals: consumer products, life sciences, industrial machinery, and product manufacturing.

Genpact is aiming to achieve a rough balance between the Genpact specialisms of consumer products and life sciences and the Barkawi specialism in industrial manufacturing. Similarly, Genpact is aiming for a roughly equal revenue split between consulting and managed services, with the CPG sector having a higher proportion of managed services contracts.

Strengthening Supply Chain Technology Relationships

Another advantage of the Barkawi acquisition is that it brings Genpact strong existing relationships with, and expertise in, supply chain planning platform companies Kinaxis and Anaplan. Barkawi is one of the leading partners of Kinaxis, and the company’s partnership with Anaplan on supply chain complements that of Genpact's with Anaplan for EPM.

Strengthening European Presence

In terms of its client base, Genpact estimates that the majority of Barkawi’s clients in the U.S. (where it was typically selling ~$200K technology consulting projects), are prospects for a wider range of Genpact supply chain transformation services. In addition, Barkawi had a strong management/process consulting presence in major manufacturers in Germany, which Genpact will seek to build on.

In addition, while the bulk of Barkawi’s European personnel are in Germany, Genpact will look to extend this capability by growing its team in both Munich and across Europe to address supply chain consulting in the wider European market. Genpact perceives there to be major consulting opportunities within the leading manufacturing companies, assisting them in implementing and optimizing technology, working with data, and creating optimization models. This applies particularly to companies with a strong element of aftermarket services, where these companies need to optimize their aftermarket models and address aftermarket fulfilment, warranty management, and forecasting.

 

Overall, Genpact is still looking to grow the supply chain management consulting team further, will continue to recruit, to support these growth initiatives.

 

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