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70.70.70. Saving Plenty. In the GE World.

Benefit From Gray Arrow A Kaytek Outsourcing Consulting Perspective


Saving Plenty.

In the GE World.

If you are lucky to hold GE (General Electric) shares, you may perhaps sing the title words to the tune of the old popular Abba song.

Money, money, money

Must be funny

In the rich man's world

As a Non-GE shareholder (like me), if you seriously feel as I do that the above is not funny, then the figure below is even more definitely not so.

US 300 Million $.

The savings that GE ( General Electric ) has got out of Outsourced Process Offshoring.

GE has been at the top of Fortune Magazine's Most admired Company list for many years, till it was dethroned by Walmart last year.

It is still Number 2.

GE was in the news.

First, for warning shareholders of the increasing offshoring backlash.

Second, for restructuring their Offshoring operations in India.

In fact, GE can be rightly called as the Pioneer of the Offshoring Industry, if one can call them that.

They have a huge operation in India.

Their Indian JFWTC Research Center in Banagalore boasts of the highest IQ per employee or Per Square Foot (with 60 % of employees having either Doctorate Phd's or Master's Degree in their Area of Expertise.)

6 Patents.

94 more on the way.

At last count and increasing....

GE has a set of rules called as 70:70:70 that it applies to it's Offshoring Decisions, as mentioned by it's former Chairman - Mr. Jack Welch.

The 70:70:70 Rule is as follows :

70% of IT work is outsourced .

70% of the outsourced work is outsourced to Certified Global Development Centers (GDCs).

70% of GDC work (34% of total) is actually performed Offshore / Off-site. (India, Mexico, etc.)

You can also perhaps apply a similar set of rules to your work, organization or business for your offshoring decisions, if it makes sense.

The above set of rules could be called as the GE Mathemagic Mantra !

Surely, Substantial Savings !

70 % of 70 % of 70 % = US 300 Million $.

Interestingly, like most other Multinational Offshoring Units in India, GE runs it's operations in single shifts only.

Mckinsey in one of their many research perspectives on offshoring has estimated if that Multinationals like GE above who run captive (that is, mainly for their own work requirements) units in India run their operations across multiple shifts, they could perhaps save even more money (to the tune of an additional 30% - 40% ).

Perhaps, helping them bring back the good things to life !!

For their very rich shareholders with Money, Money, Money !

As their television advertisments in India profess to do for their customers !

Whisper : It is rumoured that their suppliers would also love to get some good things in their lives (Besides Stringent Squeezes & Slashes).

Gray Arrow Email Us : Can we help in your Offshoring Strategies ?

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Updated on 26th March 2009
Posted on 23rd February 2005

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