Become a Creator today!Start creating today - Share your story with the world!
Start for free
00:00:00
00:00:01
Phil pods with Genpact CEO Balkrishan "BK" Kalra: The $18 trillion reason your AI isn't working
275 Plays29 days ago
In this episode of From the Horse's Mouth, HFS Research CEO and Chief Analyst Phil Fersht sits down with Balkrishan “BK” Kalra, President and CEO of Genpact, for a candid conversation on why most enterprises are still chasing AI returns on broken foundations, and what it actually takes to unlock value at scale.
BK argues there is no artificial intelligence without process intelligence. Drawing on Genpact’s roots in running mission-critical operations at GE, the birthplace of Lean and Six Sigma, he makes the case that the fundamentals have never changed: until enterprises do the foundational work in data, process, technology, and talent, the ROI on AI simply won't materialize.
At the heart of the conversation is the concept of enterprise debt. Technology debt, BK says, is only the tip of the iceberg — the real drag lies in the hidden process, data, and talent debt beneath the surface. Phil and BK unpack the HFS–Genpact research showing aspirations are high while readiness is low, why only 6% of enterprises have meaningfully acted despite widespread awareness, and why the challenge now is less about awareness and more about leadership courage, ownership, and execution speed.
They also dig into the staggering $18 trillion in recoverable enterprise value tied to debt remediation, and why AI transformation and enterprise debt remediation are really the same program — a holistic, CEO-level agenda rather than a CIO/CTO technology project. BK explains why the payoff is a factor change, not just incremental improvement, why the gains compound over three to six years of disciplined execution, and why active, high-frequency governance is what separates enterprises that execute from those that remain stalled.
Finally, BK shares how this is reshaping Genpact itself: the “five billion dollar startup” mindset, the Yin-and-Yang leadership blend of deep-domain veterans and tech natives, and the bold workforce bet that within three to four years there will be only two kinds of people at Genpact —AI builders and AI practitioners — with nearly 10,000 builders and 20,000 practitioners already earned, with zero whitewashing allowed.
Essential viewing for CEOs, CFOs, COOs, heads of supply chain, services, and outsourcing leaders, and anyone serious about turning AI ambition into measurable enterprise value.
Learn More & Connect
- HFS Research: https://www.hfsresearch.com
- The podcast: https://horsesmouthpodcast.com
- Phil Fersht on LinkedIn: https://www.linkedin.com/in/pfersht
- BK Kalra on LinkedIn: https://www.linkedin.com/in/balkrishan-kalra
About From the Horse’s Mouth: Intrepid Conversations with Phil Fersht brings together founders, executives, and contrarian thinkers for unfiltered debate on the forces reshaping business and technology. Hosted by HFS Research CEO and Chief Analyst Phil Fersht.
#AI #EnterpriseAI #FutureOfWork #Genpact #AgenticAI #BKKalra #PhilFersht #HFSResearch
Recommended
Transcript
Introduction to 'From the Horse's Mouth'
00:00:02
Speaker
You're listening to From the Horse's Mouth, intrepid conversations with Phil First.
00:00:15
Speaker
Hello, everybody. Welcome to the latest episode of From the Horse's Mouth podcast. I'm your host, Phil
Meet BK Kalra, CEO of Genpact
00:00:21
Speaker
First. And joining me today is none other than the famous Balakrishnan, BK Kalra, who is the CEO of Genpact. I think I've known BK for maybe getting on for a couple of decades now, but over to you BK, if you could just introduce yourselves to our audience a little bit about your background and how you got to the the place you're in today.
BK Kalra's Journey with Genpact
00:00:45
Speaker
Serendipity is what I will say, but thanks Phil for having me. BK Kalra, you can call me BK, been part of GenPack for a very long time from the very beginning. And clearly, you know, in our initial formative days as part of GE, you know, our thesis was or to run on these mission critical operations for various parts of GE and GE at that time was a very big, continues to be even today. a very big corporation, ah multi-dimensional NBCU in media, banking, insurance, capital markets, manufacturing, aircraft engines, healthcare, power power generation, turbines. So we got in our formative days a very diverse experience, which led to you know when we became independent company, we and spun out.
00:01:46
Speaker
in 2005 to become a global franchise fast. and Since then, we have honed on ah running these mission-critical operations, be it finance, supply chain, procurement, HR, or vertical processes for, as an example, in insurance for claims or underwriting or banking, KYC or core operations of a bank or manufacturing or CPG trade promotion and so on and so forth.
Global Mission-Critical Operations
00:02:16
Speaker
So we carved our destiny for running mission-critical operations. And now with this turn of technology, find ourselves at that last mile and how we can add context. And ah being always at the front end of the business, building business for GenPAC personally. And then now Tiger, as who you know well as well, you know expressed desire to retire somewhere end of 2022. Board went through its journey.
00:02:45
Speaker
regular process that it must go through internal and external and they choose this internal guy and get along. Yeah, and you came out of the original GE organization, didn't you? And you led a lot of their operations for the BFS space, I mean, before Jampec was founded, right? so Absolutely. um so I mean, you've you've come out of the world that gave birth to Lean and Six Sigma and all that stuff. How different is it today when when you look at operations and how they're being put together and solving
Evolution of Operations: Lean to AI
00:03:22
Speaker
client problems? How how different does it feel compared to what it was like when you started out with je
00:03:28
Speaker
Look, it's a daylight difference, I would say that. there is a daylight difference, and I am a certified black belt as well, as are many of my colleagues from that time.
00:03:40
Speaker
In spite of the daylight difference, Phil, what I'll tell you, that the fundamentals and foundations don't change. Fundamentally, still, oh ah you know we were called the process geeks, data geeks back in the day, and we took proud a ton of pride in that, and we continue to because as I say it in today's world that there is no artificial intelligence without process intelligence.
00:04:11
Speaker
because we think about this transformational technology, oh which has been around now actually for three, four years. And yet we have to see significant ROI still to distill for our enterprise customers.
00:04:29
Speaker
And the core thesis sits that till the time foundational work in data, foundational work in process, apart from technology and also upgrading of talent will happen, we will not be able to see the significant returns on AI.
00:04:47
Speaker
And that foundational work is where we were steeped in last 25, 30 years and becoming more and more relevant. So Lean Six Sigma is still in DNA of GenPact all of these 25, 30 years. We haven't skipped a beat in any single year. And it is becoming more and more relevant as we bring technology to bear.
00:05:09
Speaker
Right, right. um I mean, because the research that that you've done and we enjoy supporting you guys with this, really shows that most enterprises are still operating on broken foundations.
Challenges in AI Advancement
00:05:21
Speaker
Do you see companies as to underestimating how much process data and technology and people debt are actually holding AI back?
00:05:32
Speaker
Yes, I would say aspirations are high and readiness is low. And you think of any enterprise in the boardroom as these models improve every day, the aspirations are only going higher.
00:05:50
Speaker
But unless until the readiness gap finished, um fulfilled. The aspiration will not be or the return on investments on AI will not will not yield results.
00:06:04
Speaker
And in there, we typically know of, you know, we always talk about the technology debt and the research that we just did. um Again, technology debt was there, but technology debt is only tip of the iceberg.
00:06:20
Speaker
What is hidden is process debt. What is hidden is data debt. What is hidden is talent debt. And unless until holistically it has been approached through liquidating all of these debts in a methodical fashion, oh more of that return will not come through.
00:06:43
Speaker
and not just approaching it through the technology lens, technology lens, yes, yes, yes, but also the upstream, downstream process lens, how data needs to become far more structured, far superior governed, far superior quality of the data, what are the reusable assets in data, unless until that is thought through.
00:07:08
Speaker
as well as upgrading the talent. ah You know, the talent that we have today and the talent that we will have tomorrow in all of our organizations will be of a very different nature. And we need to go through building of the existing talent, obviously onboarding newer talent, but building of the existing talent is very, very important.
00:07:30
Speaker
Right. and And do you feel amongst the conversations you have a lot often with CFOs, heads of supply chain, it's not just the CIO's office, right?
00:07:40
Speaker
Do you feel they feel the urgency to make this shift more than ever? um Is it just the noise around the market
AI as a Transformational Technology
00:07:51
Speaker
as well? I mean, what's what's your sort of summing up of where we are as an industry right now? Like we've been talking about fixing our problems for a long, long time, you know, back to ERP and to cloud. it why Why is it different this time?
00:08:05
Speaker
Look, I think to be fair, a lot of progress has been made even as you think of the cloud era or mobility era. um And prior to that, you know, how internet brought a level of productivity gain in the entire economy.
00:08:22
Speaker
I think this time round, you know, it is the next layer of productivity is the next layer of growth. And we all know, Phil, that this is one of the most transformational technologies that we have experienced possibly in our lifetimes.
00:08:41
Speaker
And this change is going to be a long-term change. It is not ah going to be kind of, hey, sprinkle this AI magic pixie dust and here, voila, there are these outcomes.
00:08:57
Speaker
And what AI and all of oh this new transform transformational technology is also shining light on, that unless until you fix some of these, what we call as debts, technology debt, process debt, data debt,
00:09:14
Speaker
you will not be able to gain the factor advantage. You know, in case you fix it, it is not advantage in the top line growth or the bottom line efficiencies is not by a few points. It's a factor change.
00:09:29
Speaker
And I think that's where our encouragement to all of our CXOs and enterprises is, how do we approach it in a far more holistic manner versus just thinking it as a technology shift? It is not a technology shift.
00:09:46
Speaker
It is far more holistic shift, and that's what the key difference is. If you think from a cloud standpoint or many other previous technologies, they were more focused on technology and a CIO standpoint.
00:09:58
Speaker
CTO could drive it. This particular technology is actually a fundamental change in how businesses run. and how they will be gaining market share or gaining operating leverage by a factor.
00:10:15
Speaker
And that's why it is not just a CIO or a CTO agenda. It is equally a business leader, a CEO agenda, including upgrading the talent.
00:10:25
Speaker
So it is a far more holistic agenda that will have far defining capabilities as we progress in the future. Yeah, it almost feels like, um,
00:10:36
Speaker
we can really see the the factor impact that we're talking about. And now we just need to see more quantification and real examples of clients who are coming through the other side. i mean, the research that we conducted with you showed that only 6% of enterprises are meaningfully acted despite most leaders and acknowledging the
Overcoming Organizational Inertia
00:10:57
Speaker
problem. so is the real challenge now less about awareness and more about leadership, courage, ownership, and execution speed?
00:11:08
Speaker
So the answer is yes. um And I think our answer also sits in breaking the inertia. A lot of organizations have this enterprise inertia.
00:11:19
Speaker
And also a little bit of the organizational memory of the past that, hey, new technology has come in. Just one or two roles, as an example, a CIO, CTO will or chief digital officer will take ownership and, hey, we should see the results.
00:11:39
Speaker
It is breaking the mold of past, um setting up more bolder goals for the enterprise, and then picking X number of use cases and truly demonstrating it and creating that success for the organization will will change the game.
00:12:02
Speaker
And I think we have seen some of the organizations, as you mentioned, take lead. But that becomes more instructive for the balanced organizations that are still thinking a little bit more siloed and how it needs to be a multifunctional upstream downstream process, thinking about data in a very different way. Data is becoming truly an asset and how ah you harness the data for the for the enterprise.
00:12:32
Speaker
um And, you know, create a momentum that that will help you gain market share in an enterprise world. Right, right. Aligning the more you can align AI with revenue growth and get away from that.
00:12:47
Speaker
mindset of just cost, I think it's really, really important. So the report we did estimates a whopping $18 trillion dollars in recoverable enterprise value tied to enterprise
Enterprise Debt Remediation and AI
00:13:00
Speaker
debt remediation. So firstly, does that number surprise you? And secondly,
00:13:04
Speaker
um we make the point that AI transformation and enterprise debt remediation are really the same program. um And why is that such a critical mindset shift for CEOs and leadership teams right now?
00:13:20
Speaker
Yeah. Yes, I think the number is gigantic. and And whether it is 18 trillion or a very large number, it is an immense opportunity for any and every enterprise is how I'll kind of construct the dialogue.
00:13:42
Speaker
And clearly it is to the point that you just made Phil. It is not just the efficiency play because efficiency play we gravitate to very, very quickly.
00:13:53
Speaker
And yes, it is an efficiency play. But more importantly and equally importantly, it's a revenue and a growth level. And I think if seen in that light that how does this enable both growth and operating leverage, and I continue to say, seen it by a shift by a factor, not by a few points. It may not happen just in a year or couple years. It may take three, four, five, six years of disciplined execution, but these are momentum builders, momentum builders for a very long time.
00:14:25
Speaker
And I personally believe organizations, boards, exec teams, CEOs that adopt it fully or will see a significant shift in the in their market share and not just in the operating leverage over a period of time. and the The gains will compound. the gains will compound Now, clearly, yes, it is a mind shift because, as I mentioned or made the case that this is not just a technology project, it is a holistic enterprise level program that needs to be run. And if I talk about a process debt or a data debt or talent debt, apart from technology debt, by design, even at a CXO level,
00:15:18
Speaker
um there are slivers of these that is owned by a CIO or CHRO or a business leader. So by design, it becomes a CEO-level agenda to kind of bring it together in specific use cases.
00:15:34
Speaker
And what we have also learned that active governance around these programs, active, frequent governance around these programs,
00:15:48
Speaker
enables the execution because as you are taking those actions, actions are driving insights and you are learning more about your own organization and your peer organizations.
00:16:00
Speaker
And through those insights, you are iterating fast. But if it is ah action is driving that ambition, but singular ambition will will not take you far.
Evolving Talent Strategy for AI
00:16:15
Speaker
Right. So how's this changing GenPact? I mean, you know, I've grown up watching GenPact come from a scrappy upstart, which would take on the big tier ones back in the day to a very established multi-billion dollar services firm. How is this going to change how you hire people, how you operate yourselves moving forward? I mean, I mean, is this giving you the biggest rethink you've ever had to go through in your career?
00:16:43
Speaker
It is certainly the biggest rethink and so excited you know that we get that opportunity. And I think a lot is changing and then certain things are not changing.
00:16:56
Speaker
Let me first go to certain things that are not changing. So in our culture, it is relentless client centricity, which kind of wires all 140,000 us. changing. that is not changing You mentioned scrappiness.
00:17:11
Speaker
Even if at $5 billion, dollars we think of ourselves as a $5 billion dollars startup and we will be a $10 billion dollars startup, that is not changing. So certain attributes that made us made us who we are um and its clients and it's our culture that made us, that those pieces are not changing.
00:17:31
Speaker
In the culture itself, while I'm at culture, one thing that is changing is speed and agility. I would say, and I've been here for a very long time, so own all of our past, I don't believe we were as wired on agility as we are wired now. So I think that that is changing a lot.
00:17:51
Speaker
You mentioned about talent. Now you look at the leadership team of Genpact. I would argue that in our sector, we are the only team that where yin and yang kind of mix up together to make make the magic happen. So what does that mean? There are people like me who've been there for decades, who understand the process, who understand the domain, who are with clients, who have built the trust with many many of these clients.
00:18:22
Speaker
And then equal number or higher are tech natives, who have had who have just come in in last couple years, who are challenging every single day people like me.
00:18:34
Speaker
to deliver to one unified outcome, unified outcome being known for the biggest and brightest agentic operations company. That's what our mantra is. And I think that leadership team and the teams beneath them is making a significant difference.
00:18:53
Speaker
Look, any any company, I would say, is fundamentally three things. Process, people, technology. Data is part of the process, so process, people, technology.
00:19:04
Speaker
It is people who enable process and technology. What became film more ubiquitous, more available, um more you know easy to deploy?
00:19:19
Speaker
Technology. And technology is, at the end of the day, ah yes, a transformation, but a tool that will they go as far as the process and data allow.
00:19:33
Speaker
We come from that process and data background. And we are enabling now that ubiquitous technology that is becoming available from research labs and many other technology players, and we are actively partnering with each one of them and bringing that to that last mile of process, last mile of data, where we own the outcomes for our clients.
00:19:58
Speaker
We have always owned the outcomes for clients, been a differentiating factor in running mission-critical operations. And now we are expanding those outcomes for our clients because we understand that landscape very, very well.
00:20:12
Speaker
and really bringing these technology skills to bear in that process people technology roadmap as I was referring to. So really excited how our relevance is increasing, how we are contextualizing the process intelligence and enabling better returns out of artificial intelligence.
00:20:33
Speaker
And we are just getting started. Yes, there's a, as we've seen as a huge addressable market to go after. And it feels like you've gone from a world where you are like managing operations to transforming operations.
00:20:50
Speaker
Is that changing how you're hiring talent, BK, as you look at, you know, what are the people we need to get into a more transformative mindset, outcomes mindset than maybe some of the legacy mindsets of yesteryear?
00:21:04
Speaker
You are exactly right, ah Phil. And I think, uh, At our last investor day, we made a statement that over next three or four years, there will be only two cohorts of people left in Genpact.
00:21:18
Speaker
Even including whether you are a CEO in any role. Either you are an AI builder or you are an AI practitioner. And if you are not an AI builder and not an AI practitioner, you will not find yourself sitting in Genpact.
00:21:35
Speaker
So what is an AI builder and what is an AI practitioner? So AI builder is somebody who comes from data or technology or any of these advanced technologies background as as a major, but as a minor, they need as an additionally minor, they need to understand our particular domain, a finance or our risk or our claims or an insurance or our particular ah supply chain, our particular domain.
00:22:02
Speaker
If you are only technology, We don't call them AI builders. But your major is, um you know, a technology or a data or a data science background. We call, you know, you are classified as AI builder.
00:22:17
Speaker
And as an AI practitioner, your domain is your major, but you need to know how to chat with data, how to talk with data, how to understand that. And you really need to upskill yourselves and become that AI practitioner.
00:22:34
Speaker
And we believe and we actually published the numbers and we have made significant strides. We have now nearly 10,000 AI builders, nearly 20,000 AI practitioners.
00:22:46
Speaker
nearly twenty thousand ai practitioners And we are, again, these are ah you know hard ah grades to earn. There is zero whitewashing allowed.
00:23:00
Speaker
And you know we are therefore investing heavily in our existing talent. as well as hiring new talent to be on the journey that in next three or four years, the entire population for GenPact that is representing and that is enabling all the customers are ai either AI builders or AI practitioners. So therefore, it is a massive shift of talent.
00:23:29
Speaker
I truly believe no no company, no company will be able to transform this particular round unless until they transform their talent. And I think we are becoming one of those inspirations or use cases for our clients where we are enabling the clients in that journey as well.
00:23:51
Speaker
Right, that's good. So what's the one piece of advice to finish here, BK, that business leaders can act on today that you'd like to depart with here to drive value through AI in
Advice for Business Leaders on AI
00:24:05
Speaker
their companies. What's the one piece of advice?
00:24:08
Speaker
Look, I think, as I mentioned, that this is certainly ah more than technology. Therefore, what I would say is how it is ah CEO or a business leader level agenda, point number one. And it's not just a CIO, CDO, CTO level agenda.
00:24:29
Speaker
Point number two, how um the governance gets run in a high frequency manner, especially when ah there is a lot of noise, is AI delivering the return on investment?
00:24:45
Speaker
A lot gets enabled internally as you look at, you know, what are what are the roadblocks? And the roadblocks you will find are sitting in process,
00:24:59
Speaker
upstream, downstream process, sitting in data, um the unstructured, inconsistent data. ah And, you know, if it is a CEO level or a business leader level agenda or a CXO, CFO level agenda, you will be able to address along with CIOs, CTOs, CDOs very actively.
00:25:20
Speaker
And I would also say setting up little bit of a ph FinOps model where you are able to see the successes come through and then oh share those successes within your organizations.
00:25:36
Speaker
armour And the last point I'll make is engaging with partners and it is maybe my biases coming through, but partners like us are making significant advances because we are making significant investments.
00:25:50
Speaker
And we will advance the agenda far more faster and farther for enterprises.
00:26:00
Speaker
Terrific. Well, this has been ah great to hear how you're viewing the industry and the change you've really got across, the change that I think GenPAC's gone through and your clients are going through as a partnership. And staring at $18 trillion dollar available market for you guys. So should be exciting times. Thank you. Thank you so much. today appreciate Thank you.
00:26:24
Speaker
Thank you for, thank you for your time. You're welcome. You're welcome.