Novartis forms BPO pact with Genpact
services provider Genpact to outsource some of its business
processes to India.
India-based Genpact will provide the pharma division of Novartis with support in accounting and purchasing activities and manage this as a global shared service, Chris Lewis, Novartis' spokesperson told Outsourcing-Pharma.com.
"We believe this decision will enable us to better serve the needs of our core business," said Lewis.
He added that this project potentially affects a total of about 120 people in seven countries.
In addition, Lewis said that this new outsourcing contract brings Novartis "into line with the strategies already adopted by many of our peers."
Indeed, last November, Eli Lilly awarded Indian software firm Tata Consultancy Services (TCS) a major multiyear business process outsourcing (BPO) contract, while Danish pharma company Novo Nordisk signed a similar deal with TCS a few months earlier.
Novartis' latest move comes as no surprise since recent research suggested that more companies in the pharmaceutical industry than any other industry are set to increase their reliance business process outsourcing this year.
Both cost and process improvement were motivating factors for undertaking BPO, according to Equaterra, the consulting company that produced the research last month.
Of the 25 large pharmaceutical companies surveyed, 44 per cent of firms that had outsourced one or more business process areas planned to expand their outsourcing into new process areas, 39 per cent planned to expand outsourcing into new geographies or business units, while 22 per cent planned to expand in the existing process areas outsourced, and nobody planned to cut back their outsourcing, said the report.
Although finance and accounting is currently the least popular business process to outsource, with a current rate of only 11 per cent, this function will see the biggest growth over the next year, tipped the research, so it seems Novartis may be leading the charge.
