On Genpact’s acquisition of PNMsoft
Following on from Genpact’s announcement earlier this week of its acquisition of BPM technology provider PNMsoft, I had the chance to have an in-depth briefing with PNMsoft’s CEO Gal Horvitz to find out more about the likely next steps for both companies.
Of course, Genpact’s principle proposition has been related to business process improvement in some form ever since it was formed as a unit of GE in 1997. Here, though, the company is pushing forward with a new, more aggressive, technology innovation-driven agenda.
As I noted in our recent report on the company, PNMsoft has recently extended its platform’s capabilities in key areas that make a lot of sense in a BPO context. Sequence HotOperations adds work allocation and Case Management capabilities that are particularly useful in high volume, distributed work environments.
Horvitz is clear that as a $2.5bn turnover company, Genpact didn’t buy PNMsoft for its revenue. The majority of the acquisition rationale was about the technology fit, but secondarily Genpact was also interested in PNMsoft’s footprint – with established presences in the UK and Israel and key talent in both those locations.
The acquisition of PNMsoft has been pursued by Genpact’s Digital division, which currently employs around 700 people and is estimated to be doubling in size every six months. The Digital division is driving a transformation of the larger company – using advanced technology platforms to deliver business process service propositions for customers that are not simply about labour arbitrage. Genpact already brought advanced analytics and Machine Learning capabilities to the table as part of its Smart Enterprise Processes proposition and Lean Digital approach: having PNMsoft and its Sequence platform as part of this portfolio strengthens these stories significantly. It’ll be interesting to see how the new entity starts to position itself against ‘smart process’ technology providers like IBM and Pegasystems.
The current plan is that the PNMsoft brand will live on (as ‘a Genpact company’), and will continue to sell the Sequence product line – also being able to call on other capabilities from Genpact to the mix for its audience. PNMsoft will also take its enhanced BPM technology product proposition to a wider audience. We expect the new parent to significantly boost the investment that PNMsoft currently makes in technology development, as well as in its marketing efforts.
At the same time Genpact plans to use the Sequence platform to add value to both new and existing business process service contracts. Beyond this, though, it also plans to use Sequence as the foundation for a whole new category of IP that it will use to deliver new industry-specific process solutions to clients.
PNMsoft claims that the Genpact acquisition won’t affect the bulk of its current partnerships with systems integrators and service providers; however it’s not clear yet whether Genpact’s partnerships with the likes of Appian and Mendix will be affected.
If you’re a current PNMsoft customer: on current evidence this looks like a positive development – Genpact’s resources will strengthen PNMsoft in multiple areas. If you’re a current Genpact customer, at an appropriate point you should take time to learn about how this new set of capabilities can be brought to bear on your situation.
If you’re a competitor to PNMsoft in the BPM technology platform space: a small competitor just got a whole lot more important to watch.