Again, good morning, everybody. Is this on? Can you hear me? Good morning and welcome. I'd like to thank everybody for coming down today to speak with us for a little while on a beautiful autumn day here in New York City. Just looking out into the audience, I think I know most of you from various meetings, from conference appearances, but for those who don't know me, I'm Roger Sachs from investor relations here at Genpact. On behalf of our 90,000+ global team members, I'd like to welcome everybody to our 2019 Investor and Analyst Day. I think we have some interesting and useful sessions planned. We're going to talk to you about the markets, where we play in, how they've changed over time. We'll update you on our growth strategy and perhaps dig a little deeper into a couple areas where we see some significant opportunities.
We'll also update you on our own digital evolution and some of the new work and value we're providing for our clients. We'll tie it all together with a review of our financials. Before we begin, a couple quick housekeeping items. During today's program, we're going to have two Q&A sessions. The first will occur right before our mid-morning break. Then we'll do a second Q&A, maybe a little longer Q&A session at the end of all the formal presentations. If I can ask everybody to please hold your questions until those specified time, that'll get the day to move a little more smoothly. Second announcement. If you haven't had the opportunity when you came in to stop at our client solution centers, I would encourage everybody to do so.
It'll give you a little bit of a flavor, a little taste of some of the solutions that we've developed for our clients. These solutions will be very relevant to some of the content that you'll hear today during our presentations. With that, forward-looking statements, you can all view that and memorize it. Then to kick off our session, do you want to introduce our President and CEO, Tiger Tyagarajan? If we get this to move to the next slide.
Morning, everyone. Welcome again. When we pick the date for something like this, we check whether it's a holiday, whether it's an important, some other conference happening that will take away a bunch of the audience. What we haven't checked for, which we should, is whether the UN is meeting in the city. We will check that going forward, but traffic is a mess, so I know how difficult it is sometimes to navigate across town or from places like Boston and other places that all of you have come from. Really appreciate being here. Really, we are in the middle of transforming the way our clients run their businesses. We live in times that are volatile. This is nothing new. You open the morning newspaper, you listen to the news.
Volatility, disruption are words that are used a lot, both for our clients and by definition, therefore for us, because we got to change as our clients change. These disruptive forces are not just technology, but it's in the context of also political, social, economic changes that keep happening. One of the things that we are seeing is the speed of everything is becoming faster and faster and faster. Everything is becoming real time, whether it is the speed at which decisions have to be taken, the speed at which an insurance claim has to be processed, the speed at which information flows, both within an organization, outside an organization, and globally. The expectation of that speed, the expectation of real-time prediction is just exponentially going up.
In that world, we believe culture, the ability to deal with change, the ability to drive change is actually the ultimate differentiator and winner. In that broad, changing, disruptive, uncertain, volatile market, our own markets have been changing a lot in the last five years. Management teams are really looking to leverage all these new technologies, these disruptive technologies, in order to change the way they run their businesses. When they think about it, no longer do they think about, I want to do this all myself because they want speed. You don't get speed when you do things yourself. You also don't get all the learnings that are happening at a very fast iterative space. Therefore, we are finding more and more of our clients and our potential clients thinking about partners to work with to drive that change that leverages all the new technologies.
They're all becoming bolder. There is no question that what that technology disruption is doing is to make our clients bolder. They're increasing scope, they're increasing complexity, they're reducing time, and they're willing to take more risks. Their own decision-making time is accelerating for a bigger scope, a more complex scope, and a faster journey. Their own decision-making time in very large organizations has dramatically improved. Finally, in the end, the world is moving to focusing on outcomes. We are moving to focusing on outcomes, and our commercial models also are shifting to really get focused much more on outcomes. We ourselves have evolved in these five years. From being a company that has always been known and continues to be known as someone who runs critical operations for our clients and has an enviable client promotion reputation, referenceability, measured as Net Promoter Score.
To now being thought about as a global professional services organization that delivers and sustains digital transformation and journeys around those and takes our customers and clients on that journey. There is a reason why this is not a left to the right, but is a left to the top right. The pictorial representation here is that as we have gone more and more towards helping our clients drive digital transformation, it's on the foundation of what we've always been. We never, ever should miss the fact that our foundational depth of delivery of excellence, and our operational insights and domain insights is what gives us the right to win in driving that digital transformation for our clients. It's one on top of the other. What is that journey?
That journey of driving outcomes therefore allows us and gets us the right to win more and more. It's leading clients through that transformation journey. It's in that journey bringing in digital technologies, analytical tools in order to change the way companies run. Focus on outcomes and changing our commercial models to match the outcomes that we promise to deliver and then deliver. The more we do that becomes a flywheel, that becomes our virtuous cycle. That's what we are seeing in our marketplace. That's what we are seeing in our business. Our market continues to be under-penetrated. I just want to reemphasize this again and again. It continues to be under-penetrated, and digital is expanding the size of that market. Think about it. We had a certain size. It was under-penetrated. It continues to be under-penetrated.
Because of digital, the size of that market has increased, while obviously digital is going to automate a whole bunch of things in that market. What you'll hear today is some of the new services we've brought in with our clients in our verticals, very carefully chosen. Our services and opportunities to drive change, leveraging all these new technologies, that actually opens up a very large market space. You're going to see a couple of examples of that in supply chain and financial crime. Two big examples for us that opens up a whole new space. The only way to compare this is 2005 finance and accounting for Genpact when it came out of GE. Think about that and say supply chain services for Genpact today because that's exactly the position of the market today on supply chain services.
That's exactly the position in the market today in terms of change and the amount of change that's happening in financial crime in the banking space. We are winning more than our fair share in our areas of choice. I do believe that one of the reasons we are winning more than our fair share is because we've made choices. Our deep focus and our strategic choices in specific verticals and geographic markets and services that we made five-plus years back is making a huge difference. That has allowed us to get depth in domain, and bring out the deep understanding of process that we've always had. Our maniacal focus on clients, that haven't changed, that then allows referenceability. Then our two synergistic routes to market, and I'll talk about it.
Intelligent Operations, Transformation Services, and the interlinkage between the two, all driven by a very diverse global team that brings that all together. A moment on the choices we made. These choices we've remained steadfast with, whether it's the verticals that we've chosen, six of them, or it's the services broadly divided half and half between end-to-end enterprise services that cut across all these verticals. Finance and Accounting is a great example. Supply chain is a great example, but only for the non-financial services verticals. Then very vertical specific services. Services that are unique to a vertical. Managing insurance claims for the auto insurance market or managing financial crimes in the fraud and AML area for credit cards. I mean, those are very specific vertical-driven services. Those choices that we have made, we've remained steadfast. Every year we reevaluate any new services to add.
We've added, as I said, over the last few years, we've really doubled and tripled down on supply chain services. We've doubled and tripled down on financial crime as two examples. Domain depth. You've known us for this. Our clients have known us for this. 20-plus years of building knowledge industry by industry. Initially with GE and subsequently with a range of clients that we serve. Proprietary frameworks and processes. Smart Enterprise Processes, you've heard that term before. That is rooted in our understanding of how you use Lean and Six Sigma to disaggregate processes. All of which are amazingly important in the world of digital.
Our considered view, which has got now reinforced over the last five years, is that digital comes to life when you really bring it and implement it with a deep understanding of process and a clear understanding of the outcomes you're trying to deliver in the industry you're trying to deliver it with that domain understanding. An increasing reputation as we implement this and execute this and deliver this outcome, that has a tipping point in terms of that reputation, in terms of winning iconic brands that becomes a reason for others to talk to us and engage with us. That maniacal focus on clients that delivers referenceability is built on three foundations. When we say something, we just do it. That goes back to our foundation on just delivery excellence.
Focusing on outcomes as the most important thing, and our client outcomes, with the clear view that once we deliver that, we'll get paid our fair share. Being an extension of our client teams. Remember the way we grew up, six years as an extension of a large corporation. That becomes even more important in today's world as you drive end-to-end improvement and implement digital and analytics. That gives us the permission to co-innovate. Digital without co-innovation is not going to happen. That co-innovation is with our clients, where we experiment a lot. It's an extension of that relationship, where you start in one area, that gives you the permission to go to other areas.
Our permission to go down the path of supply chain services comes from the depth and the strength we have in finance and accounting, because that connection is very deep in a manufacturing company. Our clients become our ambassadors as we become more and more a trusted advisor for them. That little thing that circles in the middle is the synergistic route to market, where we take our operations, embed digital analytics and all of those tools and frameworks and methods into that operation, that we now call Intelligent Operations. That gives us the permission to go to our clients and say, "We'll change the way you run by bringing in all our technology," and that we call Transformation Services. In the center is the interlock, and that interlock is a deep understanding of the industry and a deep understanding of processes.
Without that interlock, we don't think you can be successful in actually embedding digital into operations, neither can you be successful in changing the way our clients run their businesses. 75% of our business today is Intelligent Operations. 25% is Transformation Services. Together, that drives growth for us. Often underestimated, that actually the single biggest bottleneck we see for our clients embracing change and then driving change and getting to better outcomes is their ability to actually embrace change and get onto the bandwagon of change. That requires, we believe, a really diverse team that is cognitively diverse. That thinks differently. That in the room, has a person who's deep in a particular industry, someone who's deep in processes, someone who understands how people change behaviors, someone who understands digital, someone who understands robotic process automation.
Together, that team delivers value in producing solutions that are highly innovative. At every level of the organization, starting with my team, that team is very different from what it was seven or eight years back. A third of the team are people who've been in the company for 20 years, 15 years, people who really understand all the things that I talked about in terms of domain process and what we bring to the table. A third of the team are people who grew up in the company, who are now in leadership positions in the company. A third of the people who've come from the outside who bring new thinking. These are people who've joined the team from the outside, either directly or through acquisitions that we've done.
We've had a great track record of leaders who've joined the company from the outside through acquisitions, who are now running big jobs in the company. You will hear from a number of these leaders today, as we go through the session. It is this team, and it is the diversity of thinking, their background, and their experiences, that together finds a way to drive transformation and change for our clients. We are executing on our strategy. We've been investing over the last five years in client-facing teams. We've been investing in digital analytics, experience, and domain capabilities in the industries of our choice that then fuels our growth through the solutions that we develop. We go to market with these end-to-end solutions. We deliver outcomes that then become referenceable. That has allowed us to win really large, complex deals.
That has allowed us to drive change of complexity and great outcomes for our clients. That leading to accelerating new client wins, as well as scaling existing clients. If we look at clients who have $50 million+ revenue relationship with us as of the 30th of June, the middle of this year, that's gone up from three to eight in this five-year period. If you look at the bottom right-hand side, 121 clients are now more than $5 million in revenue. Remember, a subset of them are perfectly positioned over time to get to that $50 million number. That's the beauty of our business. You get in, you deliver value, and you expand in that relationship through the reputation that you build. If you take one of the, 10+ year relationships we have in the insurance space, this is a client that started off in 2007.
Over that 12 years, on the back of amazing Net Promoter Scores and promotions, we've expanded geographically, we've expanded services, we've expanded business lines to today doing reinsurance, insurance, specialty analytics, finance and accounting, which by the way came in only halfway through that journey. The first half of the journey was actually very deep insurance core operations. At every step of the way, this client expects outcomes and value to be delivered that then gives us a right to win more. This positions us to be pretty much the premier partner for this insurance company for anything and everything in the spaces that we operate in. Another example in the global life sciences space. We started this journey really, really early, soon after we became an independent company from GE.
Started with a very small finance and accounting group for one country, only procure to pay and general accounting. Through expansion of geography, services, businesses, and then helping them integrate acquisitions, to now bringing in digital into their finance organizations beyond the work that we do. Implementing robots for them, implementing AI and machine learning in the way their contracts are managed. That's the evolution of that kind of a relationship. These are the kind of relationships that gets us to the $50 million and beyond mark. We believe, and I've used this phrase over the last three or four earnings calls, we believe we have crossed the tipping point of reputation. Remember, we are in a network economy. In a network economy, we all intuitively get network economy in the consumer space. There is a network economy that plays in our space as well.
There comes a time when our clients and the leaders we work with become the owners of our reputation and the carriers of our reputation across. There comes a time when much more people know us than they did, and that makes a huge difference. They know the reputation and the delivery that we bring to the table. That positions us not just as someone who delivers operations, but as someone who can actually help drive change for them to reimagine the business they have and the way they run in today's world. What you'll hear from my leaders today are what is specifically our strategy, how has it played out so far, and what's the go-forward strategy?
A deep dive into two of our services, the two that are what I would call the newest with probably the largest addressable market out there that we think we are really well-positioned to capture. Sanjay will take us through our digital evolution and where we see that going. Ed and I will come back to close with a financial update as well. Thank you again for coming here, and with that, Katie.
Great. Katie Stein, Chief Strategy Officer. I've had the pleasure to be at Genpact for three years, see our journey continue from Blueprint 1.0 to 2.0. Happy to share some of the elements of our strategy today. Our objective, driving sustainable growth in double digits. There's four key elements to our strategy that I want to focus on today. The first is how we make choices. We believe that a core tenet of our strategy is that sharp, ruthless choice around where we focus. That's both in the realm of our service areas and our clients. It's working. We've been on this journey now for more than five years. We revisited it three years ago. In terms of our inflows, our bookings, our pipeline, you've heard us talk about it being at record highs.
Those areas are within our chosen areas where we have deep differentiation and we command leadership positions. The second is being positioned as a problem-solving partner. What does that really mean? It means that clients look to us for greater scale and more complex problems than ever. They do that because they trust the domain and depth and experience that we have, combined with the third point, our ability to bring transformation at scale and at speed. There's too much transformation that's taking too many years and not delivering results. Transformation at scale and at speed you'll hear a lot about today. Lastly, our people. This is all done through our people and continuing to upskill and hire in the best talent in the industry. Let's just take a moment on the journey.
The last five years, as we look back, Blueprint 1.0, around the time of 2014, we decided to double down our investments in a set of chosen areas and domains. This has reaped all sorts of rewards in terms of the expertise that we've built, the sandbox of data that we've built upon, to in 2015 inventing Lean Digital. That was taking our practices and our deep domain expertise and infusing that with our digital Smart Enterprise Processes, which is our proprietary frameworks we bring to deliver end-to-end transformation. In 2017, we decided that we needed to accelerate the pace of change in our pivot in digital. We made a few strategic acquisitions. We brought in RAGE Frameworks, natural language processing in the space of AI.
We acquired TandemSeven, which brought in CX UX, customer experience. I'll talk about that a little bit more in a moment. We tripled down our investments in our digital SDP framework in terms of how we actually deliver and accelerate transformation at the digital core level. This year we've been focusing, and Sanjay will talk a lot about why is AI failing in the enterprise in many cases? There are so many AI models available. You all know they've been around for many years, if not decades. Organizations are having a hard time putting those to practical use in their organizations. What we did was we have taken our data, infused that with labeling the data off of our domain in the spaces of F&A, supply chain, procurement, and core operations.
We built a library of over 50 pre-trained accelerators that allow us to quickly bring rapid transformation using AI in our processes in the organization. Finally, I look forward and I think about how the industry is changing. We've had marquee deals that we've announced within the last 12 months, some of them Bridgewater, where the market is transforming in terms of customer experience being really a front office activity to redefining how we drive operating models for our clients in a time of rapid disruption. Great. At the end of the day, what matters? This is a huge market. Half a trillion dollars we think is the addressable market, and highly under-penetrated today. We recognize there continues to be natural compression. This is driven by productivity commitments.
It's driven by automation, microservices platforms coming to market. The key message, as Tiger said, is digital is actually driving expansion. Despite the compression that we see every day, digital is expanding the core markets that we participate in. You'll hear today as we talk about something like supply chain. Supply chain we size to be about a half a trillion dollar opportunity in and of itself. It may take five years to a decade to get to be that size, but we see that service area alone being as large as the market we drive today. Why? Because areas of supply chain that traditionally would have been considered core are now being unlocked through analytics, AI, and digital in a way that only third parties can bring scale to those activities and deliver superior outcomes.
This is why we believe that we will continue to deliver our double-digit growth in global clients on a sustained basis. I want to take a moment and focus on what is Transformation Services. Tiger showed that virtuous circle, and he talked about Transformation Services being 25% of mobile client revenue today. What really is Transformation Services? It's where we bring together capabilities, digital, analytics, and within those, more specifically, automation, analytics, AI, and experience, combined with great advisory models to deliver superior outcomes. This shifts us from being a traditional, 10, 15 years ago, BPO outsource provider, to someone who's actually extending beyond traditional labor arbitrage to use those capabilities to deliver new outcomes.
Mark will talk later, for example, in the space of financial crimes, around how we can actually use analytics for prediction of fraud, and how we bring that in addition to the cost and productivity that's a given that we drive in our operations. We bring these to market either on a standalone basis, oftentimes as a multi-year journey, an annuity type of revenue base. It could be analytics as a service, for example. We bring them, as Tiger explained, embedded within our operations. Again, oftentimes on a multi-year journey of transformation, enabling us to deliver outcomes more rapidly for our clients than we could have before. Why is this so important to us? As I mentioned, it increases our ability to be at Intelligent Operations. Over half of our Intelligent Operations deals today are sole source, and that number continues to hold and creep up. Why?
Because we're able to enter the client through design work. We're able to bring them Transformation Services as tip of the spear in that case, in order to secure downstream Intelligent Operations. Second, when delivering on those outcomes in Intelligent Operations, as I mentioned, it unlocks new problems we can solve. It allows us to change our commercial models. It allows us to speak to new types of commercial models such as gain share, where in addition to cost and productivity, we can solve problems. Finally, it allows us to attack a scope and scale of problems that are larger than before. Our clients trust us to deal with that complexity using these capabilities because they see the outcomes quickly, they see the value delivered, and they see how it links to core business problems beyond typically what was just within their shared services.
We see this as core to our competitive advantage, and we continue to invest heavily in building and acquiring these capabilities. As I mentioned, Transformation Services is translating into results. As we go down this journey, more and more of them become multi-year journeys, annuity-based revenue. Transformation Services, second of all, is now finding itself in most of our deals, over three-quarters of our deals, up from a half a few years ago. Our fastest-growing relationships who have Transformation Services embedded in them, the correlation is they grow at 2x the average company relationship. Again, we see the momentum of higher growth off of those relationships where we're using transformation to drive outcomes. Finally, it allows us to shift our commercial model. 40% of our revenue today is not FTE pricing.
This slide is an abstracted client example, and the reason we abstracted it was simply to say that this could be any marquee Fortune 500 client. The important part, if you look at it, is the X and Y axes almost. The X axis is from 2018 to an idea of 2020+ , where we take a client from less than $10 million of annual revenue to over $100 million of revenue. This is a real client example. This is one where we're on a journey right now, and we see this forecast coming forward. The Y axis is the scale of the relationship. Tiger talked earlier about a couple of examples of relationships that have developed over a 10-year period.
The important point to take from this message is that in a period of a year and a half, using transformational services and capabilities, we are able to take on a greater scale and complexity, and therefore drive greater growth in these relationships and outcomes for our clients in a far more protracted period of time. Just to pause on this example, it began in 2018, a relationship we didn't have. A logo we'd always wanted to be in, but not a relationship we had at that time. It began with less than $1 million of design work. A problem so many of our clients are facing, which is digital disruptors knocking on their door, and they needed to think about how to operate differently. Yes, a core element of it was productivity and cost, but it also was how do we operate differently?
How do we change and transform our middle and back office? It led from that design very quickly into one geography where we clicked in and did a deep Blueprint of how we would transform them. A core element was that at the core of that was actually transforming through digital and technology and analytics. Then very quickly turned to us actually taking over and running those operations and day one starting to deliver those outcomes. If you were to talk to that team and say, "What did it feel like the second week you came to work?" They would say, "I had insights and analytics that allowed me to better manage my position in working capital than I'd ever had before. I had daily reporting that let me manage my teams on the collection floor faster than I ever did before.
I knew where my leakage was happening. Roll forward six months later, we had built out components of the data engagement layer. Now the business is again transforming. What did that do? It immediately unlocked, again, the willingness to trust us with the complexity of a second geography and a third geography, and we're on a path to scale to over $100 million next year. We talk a lot about ruthless prioritization and focus, and I wanted to take a moment to talk about what goes into that equation for us. Not surprising, classic matrix of, we pick our sweet spots based on where we see there's a large addressable market. Again, BK will talk about supply chain. Could be a half a trillion dollar market. It's a large addressable market, and we pick it based on our right to win.
Again, BK will talk about some of our legacy assets in the space of supply chain that gave us the confidence that we were ready to move into that market, and then we supplement through organic and inorganic and partnerships. Second, we always look at what's happening in the market around us. Where are the tailwinds? Where is technology innovation occurring? Where is artificial intelligence going to actually markedly change the growth curve? And where is experiencing changing how work has to be done to satisfy the employee, the customer, and the supplier? Finally, we want to move up the value curve in terms of the types of outcomes that we deliver. Cost, risk, compliance, they're critical. They're always part of the conversation. It's a table stake.
Our ability to impact top-line deductions, whether it's in the consumer goods industry by helping manage deductions and recovery, real top-line dollars that we're helping to capture and preserve, falling straight to the bottom line, or whether it's, as Tiger alluded to, changing the operating model, business model evolution, the digital bank, and how we're helping a card issuer change how they fundamentally operate in the market and serve their end customer to grab more market share. Once we've picked our spots, we always go through, as anyone else, a clear view of do we build, buy, and partner, and we employ all three. Let me just start with buy. As you know, we've employed a successful tuck-in acquisition strategy.
We focused on both digital capabilities, RAGE I mentioned earlier in the space of AI, TandemSeven in customer experience, PNMsoft that added to us some great workflow technologies, and also domain acquisitions. Barkawi, being a leader at the forefront of connected simplifications in supply chain, and also in some of their own just pure supply chain design and domain expertise. Or, riskCanvas, we'll talk about later today in the space of financial crimes and banking. Partners, we have a very active investment focus on partners. These are just a few. Obviously, there are many of the cloud giants and others not listed on this page today.
In the spaces of technology, whether it's automation or process mining, whether it's some of these microservices platforms like BlackLine, we recognize that our job is to be the architect who stitches this together into our Smart Enterprise Processes to bring transformation for our clients. Lastly, we spend about 3% of our revenue on R&D, which is both focused on building IP through our domains, whether it's, as we said, F&A, procurement, supply chain, or cooperation, and also through our digital builds. We feel pretty good about what our clients say to us, but we also feel very validated by the industry.
There's a couple of example leadership notations up here, but I think the core message is in the last year, 2017 to 2018, we doubled the number of our leadership rankings, and over half of those, or around half of those, were in the space of digital. I think that speaks again to our strategy as working in terms of where we're recognized in the market as a core player and leader. Lastly, in terms of those four pillars, our people. We have over nearly 100,000 people globally, and like all of our clients, we are going through a transformation ourselves to think of how do we upskill, reskill, recruit, and retain the best talent.
Genome is an internal program built by us off of the best of our experts, who we call gurus, in a networked fashion available to all of our employees globally through the mobile and desktop. It is so that they can reskill, not just in their domain areas, constant refreshing in where they practice today, but also cross-skill into, as we talk about bilingual or working across digital and domain. Upskill. I myself have taken AI courses on this. One of the most important things is our view on this is to contextualize it, so that as you're learning, it's contextualized to specific business problems, client examples, that we can apply those in our daily lives. The reality is, what this slide says to me actually is we're less than one year into this journey. Our goal is 70% penetration.
We're on our way towards that and feel confident, but more importantly is the exponential growth in learner hours. Our people are pulling on this. They're asking for more, and I think that speaks to the type of upskilling we'll be able to achieve to, again, propel us forward as a partner of choice with our clients. Lastly, I didn't mention industry vertical at all during the conversation, mostly because what you'll hear from today is BK, who will talk about the CPG and retail and life sciences industry and how supply chain fits into that. Mark will talk about banking and capital markets and how financial crimes and risk plays into that. We believe winning the last mile is all contextualized to our clients and their industry.
When we think about all of the problems we solve, we come back to the core of who is our client, what is their industry, and what are the problems that we can solve, and that's how we feel we win in the last mile. With that, I'll invite Mark up. Thank you.
Good morning, everybody. Doing okay? That's a lot of information in a short period of time. I'm Mark. I'm responsible for banking and capital markets at Genpact globally. Proud to be here today. I'm going to spend some time talking about our focus on financial crimes. We're very proud of how we help our clients with financial crimes. Let's just set the stage as to how is financial crimes defined. There's some things that we do in this space, and there's some things that we do not do in this space. If you think about fraud, anti-money laundering, trade surveillance, anti-bribery and corruption, those are areas that we play in, and we think we have an advantage in how we play in those spaces. There's some other areas, tax evasion, cyber, insider threat, market manipulation, that we do not participate in currently. Talking about the market itself.
It's exploding. This is a significant problem for the banks and the capital market companies that we serve. There's data, there's new transaction types, there's real-time payments. If you think of all that you do and how money is moving in the economy today, and the interactivity that the banks have, it's a growing ecosystem that is creating more and more opportunity for fraud and financial crimes. The banks and our clients are trying to keep up with that. There's a lot of noise. There's confusion. How do I manage a strategy? How do I deploy emerging technologies, including artificial intelligence, machine learning? What are the choices that I can make to identify fraud and to fight financial crimes? Our clients are struggling with those choices because there are so many choices and there's so much noise in the system on how to address this concern.
There's converging threats in that outside of financial services, you see technology firms starting to participate in transactions. You see new currencies being launched. You see a variety of different disruptive activities that also lead to financial crimes and fraud that need to be addressed and understood. Currently, our clients, the majority of them, are doing manual investigations. They see an issue, and they literally brute force their way through the issue to try to understand exactly how they're going to deal with it, to make sure that they alert the regulatory authorities, to make sure that everyone's aware of it, and they can address it properly. It's an expensive, growing, brute force type industry for our clients. We look at this and say, "Where is the market? And what has yet to be transformed?
Where are there transformational opportunities in this market? If you look at the spend on financial crimes, it's $38 billion around the globe. If you look at the spend with the banks that have a significant amount of assets, it's about $27 billion. If you look at our target market here, it's about $16 billion. Of that $16 billion marketplace, we believe only 10% has even attempted to do something transformational in this space. We believe there's a 90% of $16 billion is a market that's untapped, that we haven't even entered yet, that no one has entered yet, that hasn't brought a transformational solution to what we think is a very significant problem. Why do we win in this space? We started, obviously, and you've heard Katie and Tiger talk about Intelligent Operations. We're there today. We understand what's happening in the operations today.
We understand from a domain perspective, the emerging differences that are happening in that space. We've added digital and analytics. You've heard that. Those pieces were already here. We've now brought in riskCanvas, which is cloud-based technology rendered as a service that creates unique customer profiling for us. We have one view of the customer for the banks and the capital market companies, so we understand what's happening exactly and can identify those trends. We think this is a comprehensive picture that really does help us be in a position for growth over time. To add to that, there's things that we do from an advisory perspective. All of our clients have to have a strategy for this. How do I address this? What are we going to do? What technologies are we going to use? What is the operating model that I'm going to deploy?
It has to be unimpeachable for the regulatory agencies that would look at them, and they have to be able to communicate it clearly to their customers, and to anyone that would participate them. We have that capability. The domain talent. I have chief risk officers on my team. I have ex-regulators on my team. There are people at Genpact that have deep understanding of this area, and we've had those for a period of time. We've now added the technology component, which looks at this problem as a service and can take this operation over and render an outcome back on an as-a-service basis, which is exactly what our clients are looking for. Thinking in that context, there's a couple of options that we can do for clients. KYC, know your customer as a service, transaction monitoring as a service.
We work with our clients to do both the advisory, we bring the talent, and we drive the technology to take that entire operation over, keep it modernized, keep it digital, keep it advanced, and be ahead of the marketplace, so we create a great outcome for the clients that we serve, both in KYC and transaction monitoring. Why do we win? We win because we think we have a unique single view of the customer that looks up and down that whole stack 360 degrees, which all of our clients are trying to compile, and they struggle to do so because it's a manual process. We have a transparent risk scoring algorithm. This isn't a black box. You can see what we do. We share what we do, so you understand it and make sure that it meets your needs.
We use RPA, robotic process automation, to drive our data collection process. It's significantly challenging to collect all of the data from these transactions and all the differences that happen there to get it in an organized way without spending too much money, frankly. We use RPA to do that. We have a proprietary engine, actually, that helps us with that data ingestion, that understands how to consume that data, how to organize that data and make it more effective for use. That is informed by constant improvement via machine learning and transaction monitoring over time. It gets smarter. The more data it ingests, and it gets more effective over time. We render this as a service. All of our clients are looking for that. We think the market is going that direction. They like to have everything delivered as a service.
They want outcome-based models, which is what we're doing here. They want to reduce their time to market. They don't want a big project that takes years for incremental improvements. They simply would like us to do it better and to do it more effectively, and they would like transaction-based pricing versus FTE type pricing. That's exactly what we're delivering in the market today. I'll leave with a couple examples. The global bank, their situation, they had a big operation trying to reduce their fraud write-offs. They had us come in, and we talked to them about all the capabilities that I just talked to you about, and we deployed them in one area of their bank. One area, not the whole bank. In doing so, we cut their cost of that operation by 40%, while also reducing their fraud write-offs by an incremental additional $11.8 million.
It's a great example because we feel as we continue to scale that and go to the other divisions of the bank, there's an opportunity to do another $11.8 million, another $11.8 million, another $11.8 million. You can quickly see how hundreds of millions of dollars of value, and losses as a result of fraud can be avoided, while also reducing the cost of the operation that you are managing. We think it's a fantastic example, and that's exactly what we're trying to do with everyone else. I want to leave you with a strategy example, too. We had a large global technology company born in the cloud, very sophisticated, who was dependent upon some payment technology for an extended period of years that they no longer would have access to.
They're now driving their own payment technology, and as a result of that, they've inherited all the burdens of that situation, including anti-money laundering, risk, fraud, financial crimes, and the like. As a result, they asked us to come in. We talked about all our capabilities. They asked us to set up their strategy. How would we do this? How will we communicate this to a large global business? This isn't something as a startup. How do we get an operating model? How do we pick the right technologies? How do we put ourselves in a position to succeed, knowing that we've inherited some significant risk as a result of the payments changes that were being made? We're very excited to work with them. We've done their strategy. We're in a great position now to work with them on a long-term basis as their partner.
Think about what this means to us. We start with just our existing IO portfolio, which is significant in banking and capital markets. As we look at that and talk to our current customer base, we think as we drive the new software licensing capabilities and add this service to the clients that we're already servicing, we think there's a path to at least $500 million. That's not accounting for clients that we're not serving today, new logos that are still eager to work with us in this regard. It's a very exciting space. I'm going to hand this over to BK, who's going to talk to you about some supply management, which is another great example of what we're doing in our verticals.
Thanks, Mark. $40 billion spent on financial crimes to protect it, and then there are actors on the other side who still manage to do something else. It's a much larger industry. Very glad to see many familiar faces. For people I do not know, I am BK Kalra. I lead our consumer goods retail business and life sciences healthcare. What I want to do is talk about supply chain, and I'm very excited to talk about it because it is at the center stage of where strategy and execution meets. Typically, how we run our strategy is we scan the marketplace, we talk to our customers, we merge organic, inorganic investments. We go back to our customers, understand their problems, fill our pipeline, deliver value to our customers, in the process, deliver value for ourselves. That is really where supply chain comes to be.
What I want to do in the next 15 minutes is talk about three things. One, frame the market opportunity for us. Two, introduce what we specifically do in supply chain. Three, make it come to life with a couple examples. Okay, it is something else here. Nevertheless, I'll continue to go. Fundamentally, if we look at what is supply chain? Supply chain constitutes, that slide is not here. Nevertheless, I'll continue, and just listen to me. It constitutes five sub-functions: plan, source, make, deliver, and aftermarket. We have services across all of these five sub-functions on plan, source, make, deliver, aftermarket. In planning, it fundamentally constitutes forecasting demand and how does the supplier planning happen to meet that demand that is being forecasted.
As far as sourcing is concerned, it sources raw materials and makes sure that suppliers are in compliance with whatever are the rules of various organizations. I said plan, source, and make. Make is manufacturing goods, or making sure testing is happening, quality assurance is happening, packaging is happening. After that is delivery of goods and services to what the demand has been for a particular customer. Think of a Unilever producing goods and delivering those, a Dove to Walmart. The entire logistics operation that goes behind it. The aftermarket service, because it is also manufacturing. Aftermarket service includes maintenance, repairs, managing service contracts. It is, again, a very large function of supply chain.
Fundamentally, for all of these manufacturing operations, and you think of manufacturing companies, be it high tech, life sciences, consumer goods, retail, any of these, or heavy manufacturing, it's a very significant portion of revenues that get allocated just for running the supply chain operation. Okay, finally it comes in. Why now? Why has it become a relevant question now? I call it an Amazon effect. Amazon has dramatically raised consumer expectations and delivered to it, including rapid last mile delivery. The experience is frictionless. You think of cost of processing an order for Amazon, it is $0.02. Compare and contrast it with first top quartile consumer goods company, it is $16. Our customers are also recognizing that in case they have advanced supply chain, it has a strong positive impact on revenues, and it's not just the cost game. The time is also quite opportune.
ERPs have been there for over a couple of decades, to be fair, they have delivered certain amount of value. However, the last mile execution is still suffering. What digital proliferation has done, because it has brought in newer tools, AI is adding prediction to forecasting. Experience, as Katie just enumerated, is taking a new proportion. As an example, the frictionless experience of Amazon. Suddenly, there is far more demand for these services. Even from our standpoint, we are finding our relevance has improved dramatically. We always been proud of owning the end-to-end and have that end-to-end DNA. We knew how the interconnectedness works of finance with various functions of supply chain, as an example, how it interacts with order management, or how it interacts with demand forecasting, or how it interacts with logistics or transportation.
Suddenly the same interconnectedness is causing more insights, and it's causing more value to come to life. To be fair, a number of our costumers have found our supply chain services valuable. I must say that it's been damn difficult to lead the horse to water, let alone drink it. With Barkawi acquisition, we now have a very credible seat at the table with all the strong supply chain buyers and supply chain leaders across the industry. Let me quickly frame what we precisely do in supply chain services. I spoke about on the top, the five sub-functions that exist in supply chain. On the left is the services, including Transformation Services from consulting, digital analytics, that in any case, we do for balanced services, and we are very strong in supply chain too.
Intelligent Operations has been integral part of the entire solution set since the days of GE. In planning, again, it's a full service suite that we have. As an example, we run inventory planning for a consumer electronics major, to reduce working capital requirements. Source has been a very strong franchise for many, many years. In Make, bulk of cost is in tech fees. However, we have smart tech fee frameworks that is helping our customers optimize manufacturing. Again, Deliver is a complete suite of services. As an example, very recently, we did a touchless order management for one of our consumer goods customer, much like an Amazon experience. Aftermarket, again, be it claims or repairs, or we do as an example, for service parts management for a airline aviation manufacturer. It's a whole set of services that we have across the value chain.
I must say, if I was speaking to you in summer of 2018, this chart was not as robust. In late 2018, Barkawi happened for us. In late 2018, we closed the transaction with Barkawi. What it did for us, in any case, on the left-hand side, we had a very strong franchise in running Intelligent Operations for few of our customers on supply chain, including digital and analytics. With acquisition of Barkawi, we got a shot in arm in terms of making sure we have now management consulting and strategy consulting coming in the same space. They had a technology partnership that we are leveraging to help. All of this is also lauded by many of our industry analysts, and we are actually ranked as leaders by most of the industry analyst community.
Actually, one of the leading analysts, NelsonHall, recently did publish a study, that is available for you to consume here, or you can take it alone. Let me actually frame the market opportunity for us. As Katie was mentioning earlier, we assimilated this data from number of industry analyst reports, it is, in a sense, a very large addressable market getting to almost half a trillion, with very low penetration rates and growing at a CAGR of high teens. Think of any manufacturing company, anywhere between 20%-70% of their revenues are invested in supply chain. 20%-30% for a high tech or a life sciences company, 50%-60% for a consumer goods retail company, 60%-70% for a heavy manufacturing company.
In a sense, a very large market space, given all the disruption that is happening, it is opening up in a very significant way for us. If I frame this for a particular consumer goods company, and what we did here, we thought of a consumer goods company, say, which is $10 billion. There are 50 just consumer goods, I'm just picking one segment of the industry. There are 50 consumer goods companies who have revenue north of $10 billion globally. We picked an example, therefore, of a $10 billion company. How you read the chart, given there are too many bars here and there's a waterfall here.
In the blue, what you see is that $10 billion and about $4.3 billion that goes in various other functional costs, be it R&D, sales, marketing, finance, HR, whatever you can think of, and the profits of the company. About $5.7 billion is what is for a consumer goods company, is for a $10 billion company, is reflected in supply chain. We have broken that into further five sub-functions that we spoke about, from plan, source, make, deliver, aftermarket. In the dark red is the addressable opportunity that we believe we have, which comes to about, which is summed up in the last bar, to about anywhere between $300 million-$400 million. If I apply the same logic because we coming from finance background as well, for a similar company, the finance cost is somewhere around 1%-1.5% of the revenue.
The addressable market is anything like 5x-6x what we've been addressing finance for the last 20 years. It is a very significant market that we are going after. I think what I like to do is, now actually bring it to life for one particular use case. This is a frame that you have seen. This is a actual real example for one of our clients. This story started in early 2015, and it started in the deliver tower, where we were just asked to do order management. How we performed and the credibility that we were able to generate with our customer was actually matched by their aspiration to disrupt the end-to-end supply chain.
The next momentous event happened in 2017, where they interested us to run the entire or virtually entire plan tower, extended the deliver tower, and relevant parts of source and aftermarket. We've been at it now for about the entire end-to-end value chain for about couple of years. In those couple of years, we have obviously connected the dots end to end. We have been able to improve the demand forecast accuracy by 450 basis points, which is a very big deal here. We've been able to reduce, in a significant way, a lot of fines and penalties they were paying to retailers. In a sense, we've been able to drive greater than $100 million run rate savings over last 12 months for this particular client. There is a rub-off effect on the revenue, which is not counted in this.
Look, fundamentally, if I reflect on our journey that has I've been a part of Genpact for the last 20 years and have been focused a lot on the finance and accounting market and influencing and driving transformation there. If I look at the opportunity and contrast the opportunity with supply chain, and look at the aspiration that our customers have, and the capability and the domain skills that we are bringing to bear, there is no reason we will not be able to do the magic with this market at 2x and 3x faster than what we've been doing on F&A. With that, Roger, over to you.
Right now, we'd like to have the first of our Q&A sessions. Can I please invite Tiger back to the stage, Katie, Mark, BK?
You talked about the market and how it's evolved. Can you also spend a little time on how the competitive landscape has evolved?
Yeah. The question was how has the competitive landscape evolved as the market's evolved. I would say the single biggest competitor we've competed with historically, it continues to be the single biggest competitor we compete with today, if anything, more than ever before. Why? The complexity, scale, size conversation that we just had and the global delivery footprint that is required with all those capabilities in every location in the world that is relevant for that client means that there are very few people who can bring all of that together. The number of players in those types of deals reduces pretty dramatically, which is why Katie talked about more than half of our relationships and pipeline and wins now are sole source. In the other half that is not sole source, typically, the competitive landscape is the usual one or two suspects.
That's one portion of the answer. Obviously, there are specific areas where the competitive landscape changes. In banking, there are a couple of other competitors. The Indian IT companies, a couple of them do come up. In insurance, there are competitors such as the insurance competitors who've always been there, and they are more prevalent than the bigger competitors that I talked about. One of the things that we've realized is that with the way the market's changing, our industry has enough of a moat around relationships that makes our relationships sticky, not just for us, but even for our competitors. That it's not that easy for a brand-new competitor to stand up and say, "In our services world, we're going to build a brand-new business from scratch." It is incredibly difficult.
It's easier for someone to say, "I have a new technology tool that I'm going to build to solve a problem." The question is, how do you wrap services around it? That's where we come in. Yes.
Hi. Ashwin Shirvaikar, Citi. I guess, there a lot of good data in here with regards to, say, for example, the percent of total revenue that comes from non-FTE nowadays, particularly if it's embedded with Transformation Services. I guess the question becomes, can you break down that non-FTE revenue into, is it based on output? Is it based on outcome? If it is based on outcome, in the example I think BK gave where Amazon's cost is $0.02 and the CPG cost is $16, if you cut that cost from $16 to $8, what do you get? Can you kind of size that?
I'll answer the first part of the question, Ashwin, which is non-FTE-based pricing can be typically of three forms. Transaction-based pricing, I think the Mark Financial Crimes example is a great example where basically, we get paid based on every transaction. As we drive more technology intensity there, more AI and machine learning there, that allows us to drive lower costs for ourselves while the transaction price remains what it is. The client gets certainty of that transaction-based pricing, and then our joint attempt will be to actually bring number of transactions down. That's one. The second would be fixed price. If you have a relationship where you establish a piece of work that you do at a fixed total price, and then the combination of labor and technology allows us to figure out the right combination in order to drive to that fixed price.
If we find a better way to deliver that, then that's our margin. Obviously, there's a risk that we take when we enter into that kind of relationship. The third one, and probably I would say the most interesting one, is value share. Value share, we think about value share in two ways. Value share on cost productivity, which is the example you took, $16 becomes $8 on a cost. What portion of that do we share? We share some reasonable proportion of that. The bigger opportunity is not that.
The bigger opportunity is the one that both Mark and BK described, which is if you take the supply chain example, if you find a way to reduce the amount of spot buy that a consumable goods company uses for their transportation, and that is, let's say, a $40 million lesser transportation cost. Not the cost of managing transportation, but the actual transportation cost. What is the value share on that? Those are much bigger numbers. If you reduce working capital by $450 million, what's the value share there? If you reduce fraud by $20 million, what's the value share there?
The distribution of those three, the value share component is the most exciting one, is the biggest opportunity available, is the earliest in the game here. The productivity one, the fixed price one, as well as the transaction price one, has been in the industry. It's just digital is allowing us to grow more.
Hi, thank you. Bryan Bergin with Cowen. Wanted to ask, it sounds like you have rounded out the offering of financial crimes and supply chain management. Just first identify if that's correct, or if there are any other areas you think you can add to those chains, and how should we be thinking about the margin profile of these new service lines?
Bryan, we've been evaluating supply chain and financial crimes for quite some time because, as both Mark and BK explained, we've had pretty material significant operations in both supply chain and in financial crimes. In both cases, what we did was we wanted to round out those capabilities as we saw the market change with all these digital tools and technologies coming in and take that to market, and we think that's a real opportunity with the market changing. Once a year, we do an evaluation of all the services that we currently are taking to market, which ones of those we could double down further, which ones of those we should just sustain, and we also evaluate new services that we should introduce. I wouldn't say right now. Katie, do you want to add to that anything?
I was just going to add, absolutely, every year we reevaluate. Oftentimes, as I said, where we pick is predicated on some basis of a right to win. Oftentimes we've been participating in that economy for a while, but we haven't yet decided to full-force invest organically or inorganically. The area, additionally, to give you an example that would be coming up, is for years we've believed that in the space of FP&A, there is a managed services play. We believe that the time is increasingly more coherent with the ability of digital data, analytics, machine learning on forecasting to unlock value that, again, no one client can derive on their own. That would be an area where we're actively working with clients.
As BK talked about in supply chain, we had some significant clients where we had been building credibility in use cases over the years. We are also moving quickly into that space and see that as a tremendous opportunity to move up the value chain in finance and accounting, where we obviously already are a market leader.
Yeah. Hey, Tiger. David Koning at Baird. Are there certain products and services that you lead with? Like for example, some of the more F&A type work stuff that clients start with, and then they move into supply chain, and they move into fraud reduction at banks and stuff. Or are these some of these newer product stuff that you lead with?
I would have answered differently, Dave, if you had asked me the question five years back. I would have said we typically would lead with finance. We typically would try and knock on the doors of the CFO. I think in banking, we've always knocked on the door of the operating officer, who typically has ops and tech or the Chief Risk Officer. Historically, that's been our port of call, along with the CFO. The CFO has always been around. I think it's changed. I guess it's changed for us for sure. It's also changed in the marketplace. If you talk about a consumer goods, retail kind of company, our actually port of call today would be the supply chain leader even more than the CFO. If you talk to a CPG company, they would say their single biggest challenge is growth.
Cost is a challenge, cost is a challenge because they want to use that investment dollars to drive growth. Growth is always a great port of call any day as compared to cost. I would say supply chain is a big, big first opportunity often now we start with in many of the manufacturing type companies. In Mark's world, risk is often the first start. Again, talk to a bank, cost is always important, but I'm actually dealing with this increasing cost and increasing penalties and risk that a regulator can apply to me, and all of those rules and laws are changing, and the world of financial crimes is just increasing. I think our natural ports of call, how we start work, has significantly shifted to get far more diversified beyond the CFO.
I think our CFO continues to be one of the dots that we connect back to many of our services. In financial crimes, if you think about a bank, the CFO's office, the compliance leader, the cybersecurity and infosec kind of leader, and the person who does I mean, all of those are intermingled with each other. You have often banks now being asked by regulators to have a Chief Data Officer, and they're all interconnected. Our strength in finance and accounting gives us a right to have many of those conversations, whether it's banking, it's insurance, or it's the manufacturing companies.
Thank you. Maybe one follow-up. I feel like if it was five years ago, and you'd won Walmart and you'd won more GE work, I feel like that would have probably been dilutive to margins at the time. Now, we can hardly see it in margins. Is it that some of the newer stuff you're selling now is just a higher margin profile, higher value add, that you're just immediately getting good margins on new work?
No, it's a very insightful point, Dave. The traditional services and the profile of revenue itself was a ramp. That ramp meant significant upfront investments that therefore changed the margin profile over time. Some of the wins, not all of them, that have a component where you start with a one-shot bump when you take over someone else's people and operations, Bridgewater is a great example of that, allows you therefore to amortize the initial investment on that initial revenue itself and then start delivering value to your client immediately. One of the first things is client value gets delivered much faster these days than it used to be. Therefore, value to us, by definition, should get delivered faster, and that shows up a little bit in more steady revenue.
Having said that, there is enough business that still is Intelligent Operations, that still have a ramp, that still have initial investments, that still starts with lower margins. The mix has changed.
Puneet Jain from JPMorgan. The three Transformation Services components that you talked about, how integrated those are when you offer Transformation Services to clients. For example, when you automate a process using RPA or any tool, does that always result in re-engineering services? Do clients look to re-engineer the process also? Do they often select the same vendor to provide all of those services?
No, it's a fantastic question, and that's why you actually explained the rationale for us for coining the term Transformation Services. That is a coming together of consulting, digital, and analytics. It's actually very difficult to separate the three. It's very rare to have only one of those. It's almost impossible to imagine RPA without first consulting and re-engineering. It's first. RPA is second. You can't do RPA unless you first redesign the process and re-engineer the process. When it comes to AI machine learning, you can't do that unless you actually, again, redesign the process, line up and clean up, do all that to data, define the lineage and definitions, then implement AI machine learning, and then subsequently run it, and then subsequently do higher-level analytics. Because just AI machine learning by itself delivers only so much.
It's how do you use that to then determine action, which includes humans as well. Most often it's all three, or it's at least two of those together that are integral to a delivery of Transformation Services.
It would be very difficult to imagine a situation where you want to implement an AI or machine learning and/or robotics, and you have someone else do all the process redesign and all that work and bring in someone else for implementing RPA. Of course, the tool in the case of RPA is one of the RPA providers, and none of them actually implement RPA for a client. They would have someone like us or some of our usual competitors to implement. Again, most often it's the same people. Any other questions before we take a break? Okay. Roger, do we have a break now? 15 minutes? Good. Thank you.
Okay, why don't you begin our second half of our program. I'm going to call up to the stage Sanjay Srivastava. He's our Chief Digital Officer, and as we said earlier, he's going to update you on the evolution of our digital strategy. Sanjay?
Hello and welcome again. Many familiar faces. For those that I haven't met, my name is Sanjay Srivastava. I run our analytics, automation, experience, and AI businesses for the company. I want to spend a few minutes on digital today. As you've seen, digital is core to Genpact now, but our journey started much earlier. In the early days, when digital was taking off on the back of the success in the front office, our clients were coming to us and saying, "Listen, as we think about end-to-end transactions, we're hitting a wall around middle and back office automation in the back of digital." You could set up a checking account on an iPhone in 30 seconds or three minutes. It would still take a while to fund that account because all of those processes needed to be digitized. That was a starting point for us.
Against that market need, our strategy was to focus very sharply and very narrowly at the space we chose to go after, which is at the intersection of domain and digital. From there, the industry's evolved, and the next sort of inflection point in the industry was sort of marked by the crying need. The burning pain in the industry was how do you integrate all of these new innovative technologies in with the legacy existing IT infrastructure? To really address that need, we designed, implemented a systems of engagement approach. The notion of a thin layer of technology that was net native, cloud-based, that could sit atop of existing system of records and drive the transformational benefits for clients whilst leveraging existing investments. That strategy has worked out for us.
We have many of these up and running now with our clients, and they're delivering significant business impact today. The industry then evolved, as it continues to do so, and the next inflection point of the industry came to be as clients were coming to us and saying, "Look, digital for us is a journey. It's no longer a destination.
What that meant was a project that started with robotic process automation today, once you actually digitize the data, would become a project in machine learning. Once you had patterns that you could unleash, became a project in conversational AI. Across that spectrum of different steps that you take, how do you actually pull it all together into one composite journey in a comprehensive whole? We introduced and launched Genpact Cora. Finally, as I look to today, the conversations we're having with our clients, as I meet with boards and other CXOs, I'll tell you two things that play on top of mind for most of our clients. One is the area of artificial intelligence and the future of work, and the second is the world of experience and how do you participate in the experience economy.
We've double-clicked on those elements of Cora that we launched a few years ago, and we're building the strategy forward from here on. Cora has been incredibly successful for us internally, partly because we've been able to leverage investments and be able to deliver and replicate successes. For our clients, it's up and running and delivering business benefits. I mean, we have it across hundreds of clients. We have it running billions of transactions across millions of users now. It's actually a pretty big platform, and it's done well for us. The question is why? I want you to look at it from the point of view of one of our end users, our customers, and our clients. They have two big problems they have to solve. The first one is curate and contextualize, and here's what that means.
There's an ever-expanding long list of innovative technologies that are constantly coming through. For each of those, there are many choices of vendors and components that come through. What's really needed is an ability to curate that long list into a meaningful set that can be replicated at scale, and to contextualize it in the environments they need to go through, for the domains they fit in, into the processes that they're going to get interconnected to. The first big problem we've solved is actually taking this long list of evolving set of things and make sense out of it in a way that clients can actually implement it in a methodical fashion.
The second burning pain point for digital in clients' eyes is the fact that because they're different components of capabilities that'll come from different providers necessarily, you need to be able to integrate that into a complete transformation project, that they need to be interconnected with APIs and other capabilities so they all work with each other. That need to be done in a modular fashion, so decisions I make today will carry into the investments I make tomorrow. Then you have to be able to govern it in a way that makes business sense. That governance is becoming even more critical as we move forward in the world. Cora really just does those two things. Fundamentally allows you to curate and contextualize, so you can actually put that into play in a meaningful fashion.
It provides the basics, the framework, the core capabilities of modularity, which gives you this ability to orchestrate different components in a roadmap. It gives you the integration, so you can make all of them come together to a whole. Obviously it gives you governance. As a result of this, our business is changing. When we first started on our journey, we would think of digital as an incremental or perhaps an adjacent or perhaps a connected business to the larger whole. It added a lot of value because it gave us competitive differentiation, it brought business value to our customers, it took us forward in a manner that allowed us to embrace and unlock the value of digital for our clients. As time has progressed, that journey has changed to where we are today, where digital is actually the core of what we offer.
If you talk to our clients, they'll think of us as a company that delivers a digital core wrapped with managed services for a comprehensive offering. That's the business we're finding. If you heard really behind the words of Mark and BK, where we're going in the future is that all of that is going to fuse together into a composite whole, almost in a manner that you won't be able to unfuse it back or to disintegrate it back. That digital and domain and process get combined into a new transaction as a service offering, transformation as a service offering, sorry. That's the world we're going into. Along that curve, along that journey, our embedment rates for digital, which we measure and track, have gone up significantly through and through. That's the external story.
Look, internally, there's been a significant amount of work that we've done and is now behind us to be able to set ourselves up for the scale that we need to drive this business. You can see the five things, the five pillars of that strategy that we've implemented. The first one being really thinking about our go-to-market and our client engagement in the changing nature of what we deliver to clients and managing them in the right way. The second key, and Katie spoke to this earlier, has been very rigorous around our investment choices and making sure that we're building scale, we're building replicable, repeatable business models. We've set up an organization that has actually allowed us to bring the right levels of product development life cycles, practices development life cycles, and partnerships enable that.
We've changed the nature of what we do in terms of robust engineering capabilities, CI/CD, continuous improvement, continuous development, new engineering principles around agile development, and how we do DevSecOps around deploying these massive technology implementations, and we've built that arm up completely. We have changed the nature and the demographic of the average Genpacter. From machine learning experts to computational linguistics experts from info sec experts right across to data science officers. If you look at the average composition of a Genpacter, we've kind of completely changed the talent curve, if you will. Last, and perhaps the most important, is as we deliver these large, complex implementations for clients that are very transformative in the core of their business, we stepped up the level of governance, both internally and actually externally, to make sure that we're driving that on track.
These have been five pillars that are all internal focus that we've spent time on, and I'm actually happy that we're actually now at a point where this work is behind us, and it sets us up for the next set of growth objectives. What does that mean for clients? I actually thought I'd take two examples. I'm going to abstract it up from a client, and I'll talk a little bit about what's happening in these two industries. I think I picked two choices that all of us can relate to from personal life. The first example is in the world of unlocking dark data and creating a digital backbone for data that allows the industries and the economies and the value to sort of get unlocked.
This is true for most industries, but I'll pick healthcare, and specifically some work we've done in the healthcare information systems area that I think brings it to life because you can relate to it. We all know that data actually comes from multiple sources, and much of it is actually what I call dark data in the sense that it's manual, it's in documents, it's in unstructured files, so it can't really be read as a structured data file. That data kind of moves around and gets used by users, by providers, by influencers, and many different kind of bodies come through. Clearly, in the world of medical information systems, you can see that you can go get an X-ray of your ankle. It gets shared with someone else, to the podiatrist, goes to someone else, in the insurance industry, et cetera.
Finally, outcomes are driven on the back of that data. That's generic to the industry, but in the healthcare space, we did some work, and I want to bring to life what we've accomplished for that client. This is a scenario where we're helping them serve 2/3 of the hospitals in the U.S., probably about half the population in the U.S., and helping them manage the medical records from provider to all the players in the ecosystem. The objective here was to take a company that did much of that manually to a company that can do it digitally and deliver a backbone to make that happen. I'll tell you step one, step two, step three of the outcomes we got.
Step one was actually laying down the infrastructure and the backbone that allowed us to digitize the process, and thereby enabled a client to go from dealing with 40 million transactions a year to up to 4 billion transactions a year. They get set up for growth, and that's the digital trajectory they're able to put into play. Step two, you can't just implement digital in a vacuum, that it needs to fit in a larger context. The managed services around that changes the operating model to unlock value from this new digital backbone that our client sort of came to have.
Step three, and this is the best part, and this is the beauty of unlocking data or lighting up dark data, is now they have the ability to look at data that's flowing through a stream and introspected with natural language processing and other artificial intelligence techniques. You start spotting billing code errors, you start being able to understand drug correlation issues, and now you're able to deliver value-added services beyond the revenue growth, the cost scaling, the operational benefits you get through applying digital. That's a great example in my mind of the work that happens and the value that digital drives at the cost layer, at the transformation layer, and at the growth layer in terms of additional value-added services. I'll give you a second example, again, taking from personal life.
We're all familiar with what's happening in the banking space. Clearly, there are many pressures that are coming through in the banking industry. On top of them is probably the area of growth and how do you drive growth through a digital channel. I want to bring to life the work we've done with a client in this space in actually helping them set up from scratch a new digital consumer bank. If you think about what's involved in making that happen, there are really three elements, and you'll see this on the left side of the slide. There's a consumer-facing platform that I, as a digital consumer for bank, will be able to interact with. There is an internal employee agent-facing platform because that experience now needs to blend together in a way that it actually is frictionless.
Then there is the human-in-the-loop component, whether it's a call center or other items that need to be delivered that is part of the mix. You have to think about all three of those components in a comprehensive set. You can't do one without touching the other two. For this client, in short, we've taken them through a journey of doing customer experience mapping, transforming that journey mapping into what the future state needs to be. On the back of that, designing the entire wireframe and the methodology, and then actually instituting that in code and delivering a platform that is up and running that their agents are using today. On the back of which they've run about a $1.7 billion in transactions in loans in the first year.
They've seen a significant increase in the conversion rate because what was different about this is that experience was the compass we used to drive this transformation. On the back of that, it actually drives growth, and we're able to see that on the platform. I want to spend a few minutes on where we're today, and I'm really excited about where we're headed tomorrow, because one of the biggest learnings we've had with artificial intelligence, in now doing this with clients for a few years, is that the escape velocity, the time it takes to get an AI project off the ground is actually very large for enterprises, and most of my clients really struggle with that.
The problem is that if you take an artificial intelligence engine, there's many that are available in the industry from large technology players, increasingly commodity now, the time it takes to tune those engines into a specific business problem around a specific domain and integrate into the processes that it actually impacts is actually very long. By the time you get it done, it's a long exercise. What's needed is a way for us to be able to accelerate that for clients. Now, it turns out, if you think about how do you drive accuracy in AI, it just comes down to three keys. You have to have the right AI engine, and those are increasingly available from our partners. What you need is you need data to run through the engines to tune it, and you need labels for the data, labeled data.
The labels come from domain, from understanding of the context and being able to contextualize that. We thought about ourselves and the role we can play, it became very obvious that we can bring data and labels or this notion of domain that's key to us and put that in a fashion where we can frame these subroutines, these Lego blocks, these accelerators, if you will, that can deliver high performance right off the gate. We have this up and running.
Katie talked about the fact that we have over 50 of this now in production, from extracting financial statements out of custodial statements and reading 400-page documents in seconds and being able to translate that into a pie chart that shows the investment portfolio design to reading thousands of contracts and being able to reconcile them in real time with invoices and other purchase documents to be able to spot inconsistencies. They're up and running now with clients today. What's really important, and this is why I'm really excited about it, is it actually now gives us the ability to take a foundational sort of component we've had all our life, which is the notion of domain and understanding of the context, and encapsulate it in a cognitive engine, in an AI accelerator that allows us to bridge from where we are today to where the world is going.
I couldn't be more excited for where we are with digital and the journey of Genpact. I want to actually now turn this over to Ed for the next part.
Sorry about that. I went left, you went right. Can you hear me? Okay, thanks everybody for coming out and spending your morning with us this morning. Really appreciate it. I'm Ed Fitzpatrick. I'm the CFO for Genpact. I'm going to talk to you a little bit about driving shareholder value, getting a little bit of details on the financials. Hopefully, there won't be too much in here today that you're going to see that's a big surprise. Pretty consistent. A positive chart across the board here. I'll point out just a few things. If you look at top-line growth, since we initiated and kicked off the Blueprint strategy exercise in 2014, we've grown revenues by 1.5x . We've also leveraged that top-line growth into earnings such that earnings has grown by 2x , reducing our share count by about 13%.
As a result, the valuation of the firm has increased by more than 2x , almost 2.5x over that time frame. Pretty significant uptick in just about every category here. Drill down a little bit more by year. Global client growth growing at a double-digit plus clip. Again, growing at double-digit plus clip, not just CAGR in every year. This is double-digit 10%+ in every year over this timeline. Global client BPO growing at an even faster clip. You can see the adjusted operating earnings growing at a deliberate pace as we had talked about, starting at 15.1% in 2014, growing to what we're expecting this year at 16%, about 10 basis point-20 basis point improvement per year. Again, leveraging off that top line to the bottom.
EPS with that improved operating margin profile, as well as taking care of capital appropriately by reducing that share count. We've grown EPS at a 14% CAGR, again, in every year growing 10%+. Our growth model, not just top line, but all the way through to EPS. Growing the top line, in particular global clients at that double-digit plus clip led by Transformation Services. You heard a lot about that from the team today. What we're driving and the new opportunities that we're seeing in Transformation Services. We're leveraging that, the operating leverage that we're getting out of G&A. I'll show you the details on that.
It's a chart you guys will remember, and we're continuing on that trend, leveraging G&A and investing it back into capabilities in R&D, such that at the end of that, our operating margins is growing at that deliberate pace, and that's flowing through to EPS at a faster clip because of the return of capital and the share repurchase program. A little longer duration. This is since Genpact went public in 2007. Just kind of speaks to, again, the consistency of that growth over time. Total company growth in a double-digit place, I think 13% CAGR. That's probably in now a double-digit place, again, led by global client growth in that 10%+ double-digit plus range. A couple things to point out. You could see how global clients have become the significant component of our business. Through 2019, 87% global client, 13% GE.
GE, that stable base of GE that's been there, somewhere between $400 million-$450 million, almost since inception. We had a couple of years there in 2016 and 2017 where GE went through their restructuring, and those levels declined. It's now back up to that level of $400 million-$450 million. GE is a stable base, and we're growing global clients at a faster clip, such that you see that as a component of total going up over time. Again, the hero within global client growth is Transformation Services. It's continuing to grow at a fast clip, 25% CAGR. That's not inconsistent with what we've done in the last few years. It's a pretty consistent higher growth part of what we do, and we're continuing to add elements to that, such that our TAM, in particular in Transformation Services, is continuing to grow.
Here's the chart I always speak to. This is the leverage that we're driving in G&A. You're losing a little bit of how we're deploying it back into R&D because we really started this the year before, significantly upticking our spend in selling and marketing. As an example, I think selling and marketing was somewhere in the 3.5%, actually below 4%. We grew that to 7% to cover the globe, have better CXO connection. We also increased the R&D budget. I think it was below 2%, somewhere around 1.5%, and now we've doubled that to 3%. Deploying back into R&D, obviously making sure we have the right go-to-market folks to connect with the CXO level. Also you could see a 400+ basis point decline in G&A as a percentage of revenue, and we expect that to continue into 2019.
I've told you this in prior periods, I don't expect that trend to change. As we grow at a double-digit clip, we ought to be able to spend at a lesser clip in terms of growing G&A, such that we show that leverage going forward. Again, deploying that back into building capabilities. This is the operating margin path that we've been on. We said we'd be deliberate. We have been deliberate, consistent. 20 basis points increase every year, except 2018, where we did 10 basis points. Effectively a 20 basis point, roughly, increase year-over-year. Again, driven by top-line growth. When you have top-line growth in the double-digit space, you're able to leverage that and deliver that consistent operating margin profile increase. How does that flow through to EPS? All those operating margins that we've been generating are flowing through there.
You can see that $0.72. We've doubled EPS effectively over this five-plus year period, from $1.03 to what we're estimating in the middle of our range, $2.01 through 2019. We've also taken care of capital. We've reduced our share count by 13% through the share purchase program, and that's why we're seeing that disproportionate increase in EPS, both through improved operating margins as well as a lower share count. Just another depiction of that kind of accelerated factor, right? Total revenue growing in this time frame at about 9% and growing EPS at a 14% clip, 1.6x . Again, operating margins growing faster at a faster clip and a lower share base driving that metric. This is the free cash flow or cash flow generating slide that we like to show you. You've heard us talk about free cash flow to net income at a one-to-one ratio.
That's what we target. That's what we plan. We're not capital intensive. We got to manage receivables, and we do. This can be impacted in periods by CapEx being a bit higher than we might have expected, like last year, where we did the large capital expenditure related to the big GE deal, which we were happy to do with the returns that we need to generate there. Targeting one-to-one, we expect that to continue. That's what we've done historically, and we expect that trend to continue going forward. We have a solid balance sheet. We're an investment-grade entity. We've increased our debt over time as we've grown the EBITDA of the firm. The net debt has grown, but largely aligned with the EBITDA growth. We said we're comfortable between one and two turns, net debt to EBITDA, to maintain that investment grade rating.
We're okay if we go over two turns for a shorter period of time for M&A that we deem to be attractive. Over the long term, we do expect to stay between one and two turns, such that we maintain that investment grade rating. You could see where we uptick really in 2017. You heard Tiger talk about it, some of the investments in Katie that we've made. Really, that's when we started to dial up and get even more focused on acquisitions. You can see the M&A numbers there growing in 2017 and then kind of staying at around that level in 2018. We'll see how we progress. Again, happy with the funnel that we have in terms of the acquisition profile based upon the capability needs that we're looking to grow. No change in our capital allocation policies and priorities.
First order of priority is to support and help drive organic growth. You heard me talk about the investments we've made in R&D and selling and marketing in prior periods. We've also put significant amount of capital to support organic growth in CapEx. Just shy of $600 million put into the business to support that organic growth. Second, we'll look to deploy and look for attractive acquisitions. Katie, Tiger, and the team talk a little bit more about some of the acquisitions we've added in to build out our capabilities, like dynamic workflow with PNMsoft, RAGE in artificial intelligence, TandemSeven in experience. These are some of the things that we're looking for to build out our capabilities. We'll continue to look for those. The third item is returning capital to shareholders.
Of course, we initiated the dividend two or three years back. We've been increasing that over time. I think we're up about 40% or so since we initiated, with nice increases per year that kind of align with the growth that we've seen as a firm. We've also, as I talked about a few times, reduced our share count by 13% over that timeline. The return on those shares. Remember I said we'd measure the success on the share repurchase program on our return. That's been a 16% annualized return since we started that program. We've deployed about $1.25 billion over that timeline. The priorities and our focus on M&A, what we're looking for, and how we'll deploy capital in terms of return of capital and the share repurchase program have not changed.
We're looking to strengthen the verticals that we're in, strengthen our positioning, strengthen the capabilities that we have to go to market with in the service lines that we've chosen. You've seen, we talked about some of the acquisitions that we've done. It's been really in the digital analytics space and in domain expertise within the specific verticals. They've been tuck-in in nature, such that we could absorb them, we could assess the cultural fit to make sure they were the right fit for us, and of course, we're looking at the economic return. We feel like they've paid through very nicely for us since we've really started dialing up the M&A activity in 2017. On the share repurchase front, again, a similar profile. We're going to look at it with the same lens. First of all, doing it based upon a price-sensitive model.
Do we think the value of the firm is appropriate based upon our own view of the value of the firm? If it's not, we'll go faster on share repurchase. If it's more closely valued to what we think the value of the firm is, we'll go slower. To the extent that there's excess cash, we'll have more capital deployed. To the extent that there's less and we do more M&A, we'll do less. Again, our measure here of the success of this program will be what's the return on invested capital that we're getting out of the share repurchase program, and so far, so good. What's happened since 2014 in terms of what we've generated and deployed? $1.8 billion of operating cash flow that we've generated over that timeframe. Good balance between organic deployment of capital.
CapEx just shy of $600 million, right around $600 million in terms of M&A that we've gotten after. We've also returned capital in a meaningful way. $1.25 billion of share repurchases and about $150 or so of dividends over that timeframe. Again, as I talked about, as we've grown EBITDA of the firm, we've also levered up appropriately. Again, such that our net debt to EBITDA stays within that one to two range. The financials, the P&L over the last five years, how have we done and kind of what did we say? If you remember, we first showed our chart in terms of what the medium-term growth of the firm is, both top-line earnings as well as margins, as well as EPS growth. We've been pretty consistent, and we've delivered to what we said we're going to do. Look at global client growth.
We said double-digit to low-teens. It's exactly what we've done. Global client BPO in the double-digit to mid-teens, a little bit higher as you would expect. Operating margins, deliberate improvement. That's exactly what we've done. EPS growing at an accelerated rate to the top line because we're growing operating margins and we're taking care of reducing the share count. You can see that growth rate and the significant growth that we've seen there. The medium-term outlook that you see there to the right, very consistent with what we've talked to you guys about previously. We feel good about that going forward because you heard us talk about the pipeline that we've got, the TAM that we've talked about. Not only is it not shrinking, it's actually increasing. The medium-term outlook is the same. Double-digit to low-teen growth, global clients.
Double digit to mid-teen for global clients BPO. Deliberate improvement in operating margin over time. We do expect EPS to grow at an accelerated rate to the top-line growth. Consistent model. As we've executed, just wanted to show you, hey, look what we've done. The prior charts, if you didn't see this, you'd be surprised. We've seen the shares appreciate faster than the broader index, and that's a good thing. We're up 280% versus the broader indices at somewhere in the 180% range. A positive outcome as you would expect. Our outlook, kind of stepping back to where are we now. Outlook for 2019, we came out at the beginning of the year, gave guidance for top-line growth and bottom EPS accretion. Those numbers improved. As we got into August, we thought we'd be in the total revenue growth 12%-14%.
It's grown to 16%-18%. The biggest contributor is GE growth. We also took our global client growth up as well, you can see that it flows through to the bottom. The $1.96-$2 per share is now $2-$2.02. No change. The guidance we gave in August is consistent with what we're saying we're going to do today. The key takeaway slide. This shouldn't be a surprise based upon what you guys have heard from the entire group today. We are in an under-penetrated market. We've been saying that. Tiger and I have been saying that every year. We believe it's still the case, probably even more so today given some of the new things that have entered the market. You heard BK talk about the supply chain market. Mark talked a little bit about financial crimes.
We think with digital and the markets that we're getting into that are close to what we're doing today, and in terms of our domain expertise, they're logical extensions of what we're doing today. The market is under-penetrated, and it's growing. We have a sticky long-term annuity business. The unique part about this business, it's also a fast-growing business, right? Global clients growing at a double-digit plus clip. You don't typically get fast growth and sticky annuity business. That's really one of the key things that I love about this business. Again, that's continuing. Annuity-based, 95%-100% kind of renewal rates, very high rates. In terms of revenue growth, it's really driven by global clients and Transformation Services. We'll continue to look to grow the bottom-line earnings faster than the top-line growth.
If you're growing at a double-digit top-line growth and you can grow the bottom line faster than that's a pretty attractive place to be. That cash flow generation of 1:1 to net income, we're going to look to continue to drive and target free cash flow to net income of 1: 1. Of course, we'll be disciplined about the way we deploy capital. If we continue to execute this way, I really believe that we're extremely well-positioned to drive attractive shareholder returns going forward. With that, I'll turn it back to Tiger for his closing remarks. Thank you.
Let's pause for a moment on execution. Great strategy, very clear path to what we want to do and why, aligned to what the market and the market forces are providing as opportunities. At some level, execution, we believe, is incredibly important to continue to earn the right to win more. And that execution goes back to execution in all the deals we won, given all the complexity, helping our clients navigate through macro headwinds, if any. Our clients, the deeper we become a trusted adviser to them, the deeper we become a partner to help drive change, means that depending on whatever macro headwinds the world faces, their business faces, our partnership and trusted advisor position means that we will help them navigate through that and execute through that change for them.
Finally, continuing to be a great place to attract talent, because at the core of our value proposition, it's how do we continue to find a way to attract and retain talent and drive upskilling at scale. Katie talked about the Genome program. It has caught fire in the company. More importantly, this is what is fascinating, every one of our clients, bar none, when they see what we've been doing in Genome, which is by the way, very new, and it's still early days, they are all over it. Why? Every company in the world, in every industry, in every economy, is grappling with upskilling as one of the top three fundamental, deep, long-term issues that they have to solve for in a scaled way, not in a bespoke, let's just run this program way.
At the core, it is our talent, it is the culture that I called out as the ultimate differentiator in this changing, macro-disrupting world. That culture. Sorry, I was looking at the wrong slide. This is a BK moment. We do have, as BK, as Ed pointed out, a large addressable market, and the new services we've added on just increases the size. Digital just increases the size. We are more and more being positioned as a problem solver to deliver outcomes. We are tying the way we get paid more and more to those outcomes. We are driving that end-to-end transformation at the intersection of all the domain and process expertise we have with all the disruptive technologies that are being born, that we are including, either by building it ourselves, partnering or buying, and by continuing to be that employer of choice.
That employer of choice boils down to the culture we have. The best way to describe the culture is the four words that we use to drive values in the company. We call this CI Squared, curiosity and courage with incisiveness on a bedrock of integrity. We believe these are very important words in today's world, not just for our business. We believe actually it's important for almost every business. You can't invent new things, you can't discover new things if you're not curious, if you're not constantly asking questions. You've got to experiment. You've got to take bets. You've got to co-innovate with clients. That requires courage. You've got to be deep and granular. Nothing at 50,000 ft is going to work. That depth and granularity is what we bring to the table. Obviously, integrity is a given.
That culture includes an inclusiveness that allows different people to sit at the table, the cognitive diversity that I talked about. To a great extent, that culture, that cognitive diversity, the ability to then build solutions for our clients by bringing new talent and mixing them with people who've been in the company for a long time is our secret sauce. In parts of our business, not in all our business, but in parts of our business, there are things that we do that actually do change the world in a very positive way. We think a lot about that. Whether it is patient safety in healthcare, or it is reducing the carbon footprint for equipment that we manage with all the data that streams in from that equipment, whether it's engines, or it's turbines, or it's healthcare equipment.
Given our history with the industrial businesses, we do a lot of that as well. As well as the way we run the company. We are on a big path to eliminate all plastic from use in the company across the globe by December 31st. These are things that our employees value. These are things that millennials value. Obviously, our workforce is a much younger workforce than a standard average workforce. I'll end with two things that we as a company are very proud of. We continue to find a way to drive this harder and harder. It's an uphill battle in the world we are in today. One is diversity. I already talked about broader cognitive diversity, but within that, one of the pillars of that diversity that we're driving hard is gender diversity.
For us, gender diversity is about access to talent and a differentiated access to talent, given that half the population of the world and half the talent in the world are women. I don't think we or the industry or the general business population actually accesses that well enough. We've been driving this for 10+ years. I think we're just getting better, but we still have a significant portion of the glass half empty. That starts from the associates to the middle management to my senior leadership team and the board. We do get recognized across the globe for a variety of things on being an employer of choice, one of them being the diversity programs that we drive.
The second is, look, we have 90,000+ people across 100+ sites across 25 countries, and we keep adding to sites and countries that we deliver services from. In every one of those communities, we have to give back to the community, and our employees love doing that, want to do that, are engaged in that, and that's actually one of the reasons. They want to join us and come to work. One of the reasons. We drive that hard across the company. It's one of the things that we do well. One of the things that we do well there itself is focusing on only a few things. We don't do broad corporate social responsibility. We're focused on education, employability, particularly for women in all the economies that we work in, and sustainability as three big pillars of our CSR.
Finally, I want to end with a phrase that I used last time. We are continuing to be a very different company, but for some of you who've dealt with us for 15 years, you recognize us. There are things about us that are the same, but we are a very different company, as you would agree. Thank you.
Now we're going to have our second Q&A session. At the conclusion of Q&A, our leaders will be around for some networking opportunities, and I believe the demo stations will also be open, and we'll be serving lunch.
Thanks very much, Roger. I had two related questions in for Ed and Tiger. You've talked about the transformation journey you're on. You're moving into higher value services. I just wanted to come back to operating leverage against that. With the focus on the R&D line item and also the Genome or ongoing training, is that ultimately going to limit the some of the upside that you see in margins as you get more into these higher value-add services and deeper differentiation?
The second part of the question is, Tiger, for you, how do you think about the partnerships and specifically with a lot of the web-scale companies, like AWS and Microsoft and Google, that want to do more subscription services. They want that ongoing revenue stream. As you're driving deeper into digital, how do you figure out a balancing act to partnering with these folks when they want more of those same dollars?
Sanjay, you want to take the second one first?
I think so.
Partnership.
I'm happy to use this. Is this mic on? Yeah. Look, I think the question's pretty obvious. Here's what we're finding out. We're, by the way, working with all three of the names that you just mentioned. As we speak with their leadership, what we're finding out is they're driving their business up the value chain. The need for solutions that come on top of their infrastructure services is becoming more apparent to them. We think there's a real foundation for partnership where they're driving compute engine power, and that compute engine power is being utilized for solutions we put on top of it and take it to market. For all three of those, one of them, we're working very closely with our computer vision solution and using the GCP platform for.
Both of the other ones are big partners for us, and we are in deals building capabilities on top of either Azure or AWS and taking advanced solutions to market that run on those compute engines. We think that the question is right on. We think it's very complementary. We think it's very additive. We're not seeing that as a compression issue for us. We're seeing it as an expansion.
The more our commercial models for our clients put a stake on the ground on outcomes, the more we are the people or people like us would be in a position to actually deliver that value and capture some of that versus someone in that space. We would deploy and then run, and then once we deliver the outcome. In the end, these solutions ultimately, only when they deliver the outcome they are supposed to deliver is there real value for the client. We are the people who are there at that last stage. Our expectation is that in those partnerships, we will be able to capture a fair share of value. Back to your original question, we are very clear that we are in an an under-penetrated growth addressable market situation.
We are very clear, therefore, that we will capture that growth, and we will do all the investments both at the front end, at the domain, and at the capability end of the equation, both organic and inorganic, in order to be able to capture the growth as the market penetrates and as that expanded pie gets penetrated. We will not give up growth in order to drive incremental margin too early. We're very clear about that because that growth requires those investments, which is why Ed, in his conversation, used the word deliberate margin expansion. We think that's the path for the medium term, whether it is continuing to invest in acquisitions or it's continuing to invest in some of the organic capabilities that we talked about.
This has just become much more focused and a lot more virtual than it had been. We've gotten, I think, better at the way that we're training our teams over a global basis.
Yeah. This is the reality of all new technologies, and actually Genome training is a microcosm of the same example. We're using the same training dollars to do, let's pick a number, 10x more training for 3x more people with 10x more courses in much smaller bites, all real-time, and all customized to every single individual based on AI and machine learning. That's the world of digital. The total addressable market has actually increased, and the cost of doing that is the same, and everything is real-time and intuitive. By the way, the experience of people is joyful versus having to come into a classroom, learn something, and then forget it as they go out.
Hi, Ed Caso, Wells Fargo. Can you update us on how your new business machine has evolved over the last few years as you've sort of reset the way you go to market?
Ed, I'll start by saying that when you say new business machine, it's the front end. It's how you go to market. It's what you enter clients with. I'll start by saying that we have clearly changed the way we enter a client in two significant ways. It's no longer just one or two buying centers that we enter, CFO being an obvious one that we used to enter. That has got more diversified, and we expect that to get even more diversified over the next couple of years. Two, we often start with blueprint design, consulting, digital consulting, deployment of digital technologies post the consulting in our clients' operations without actually running the operations. A couple of years later, the client may turn around and say, "Actually, why don't you run it for me?" Those are two big changes that have happened.
With that change, we've actually got even more focused on which clients at what stage to invest in those engagements in order to then undertake a bigger transformation journey. We are much more agile in the way we deploy our front-end team to those opportunities. We have a very defined set of clients that we go after, either as existing clients or new clients, and we dynamically look at that as their leadership changes. They are trying to drive an agenda that's different from what it was last year. It's a much more agile allocation of resources. The kind of resources have changed.
Today, the lead client partners that own a number of these relationships, I would say half of them are actually digitally savvy because that's their background. They now own the entire client relationship. Five years back, not a single one of them I would have called as digitally savvy because that was not their background. That's changed.
I guess my follow-up question is, how dependent are you on hunters to drive revenue relative to a few years ago as the business has moved away from sort of pure BPO deals to the current business model?
Ed, I would say hunting is still incredibly important, not for today's revenue, but for tomorrow's revenue. The logo that you win in hunting in 2019 may actually have almost no contribution for that year, may have some contribution for 2020. A subset of that will be the reason why 2021 will look great. It's as important as it's always been. We've always been a business where you start and then ramp. The only difference is some of those starts at this point in time seem to be stepped-up starts, Bridgewater being an example of that, and some of those starts are consulting starts. Hunting has never been unimportant. It's always been important. Our focus on mining has always been very strong.
I think we've just got better at opening up many more buying centers to mine, and therefore our overall addressable market in every one of our clients has gone up significantly. By addition of services such as supply chain and financial crimes, I think it goes up even more. Yes, please.
You talked about over the last five years, the revenue growth has been very consistent. As we look forward, look ahead next five years, there is much more reliance on Transformation Services for growth. We understand the secular trends there, but how cyclical that growth will be, Transformation Services, how defensive growth will be if macroeconomy deteriorates?
Yeah, Puneet, that is actually a great question. I'll start by saying obviously the ratio of Transformation Services to Intelligent Operations is different today than it was five years back. Therefore, the question is a relevant question. However, I think it will be wrong to assume that all of Transformation Services is projects. It's not. A significant component of analytics, which is part of Transformation Services, is not projects. It's annuity. There is a material component of digital is not projects. It's actually the financial crimes example, the riskCanvas platform being part of the financial crimes service and being paid for as a service in a five-year contract. A reasonable amount of the consulting work that is done is a multi-year consulting engagement as part of an Intelligent Operations deal that we have won.
In the natural definition of Transformation Services, with consulting being there and digital being there, the assumption could be that all of it is project. It's not. If you want to pick a number, at least half of it is not project. If not more. The embed rates that Katie and Sanjay referred to in digital as an example means that when we win a five-year Intelligent Operations deal that has digital and consulting and analytics embedded in it, then the revenue cadence of that is also annuity and is not only project. Having said that, at least half, I would say, has a project component to it. Here's the interesting thing there.
Depending on the way that macro change happens, there are going to be industries, there are going to be clients who have to react to that change by driving effectiveness and better outcomes in whatever they have, more than ever before. The tools and methods and technologies to be used to do that are all part of Transformation Services. Will they spend money on a strategy consultant? Question mark. Will they spend money to extract value quickly using Transformation Services? I don't think it's that big a question mark. It may actually be counterintuitive that it may actually accelerate in some form or fashion, at least in some times. Identifying the industries, identifying the customers for that change becomes important. Yes.
Ashwin Shirvaikar at Citi. Tiger, you started out by making a comment that clients are getting bolder. Just to kind of drill down a little bit more into that comment. Are there things that as clients get bolder, that they ask Genpact to do that you're not comfortable doing any, certain kinds of deals? Faster ramps are one thing that, I don't want to say it's easy, but it's more easily dealt with. Is the nature of contracts changing? Is the nature of your conversations changing, taking you in a direction where maybe you have to take more risk and are not comfortable with it?
I think it's a fair question to say that the overall risk of undertaking the journey has changed. Your question is, do we therefore end up taking risks that we are not comfortable with? We shouldn't. We should never undertake risks that we are uncomfortable with. An example would be, if a client says, "Why don't you take over our operations in a particular location and take those people and then digitize, automate them, and then use that as an ecosystem to bring other clients into?" It's something that we do well. However, it has to be the right location. It has to be the right ecosystem where you can attract and retain talent. That talent must be the kind of people you can leverage into similar clients in the industry that they serve.
It's something that you've been searching for at a strategic point in time in order to build that capability. If none of those are true, you are just doing it for the sake of that deal. That would be an example of doing something that is, I believe, wrong, and we would never do it. We actually debate a lot around those types of situations. We go back to the client and say, "We can't do this because it is not sustainable for the client." Obviously, it's not sustainable for us, but in the end it won't be sustainable for the client. That's a discussion that happens. That's why I call these deals complex. It's complex, and yet decision-making is fast. The cycles on these are really rapid.
Okay, thank you.
Yeah, thanks. David Koning with Baird . This year, as Ashwin was just saying, you're kind of crushing it, right?
I'm not going to run.
It'll be like 17%, I think, constant currency growth or whatever. Even if we exclude GE, it's still 11% or 12%, right?
Yeah.
Still way at the high end of the high single, low double. What do you think wouldn't be sustainable? Why can't you just keep operating at 11%-12%? Are there a couple things just to call out this year, whether it's some of the big wins or anything that are just a little better than normal, or is the pipeline good enough to keep that going for a couple more years?
I think you're talking about the medium term, Dave. When you're talking about the medium term, you have to take into account that there will be some cycles. It could be a microcycle in an industry that we are in that is important for us. I think if you talk about one year, this year, versus a multi-year, and laying a trajectory for a multi-year, your range has to increase, and that will be a natural increase. Is our pipeline strong? It's very strong. Is our momentum in that pipeline strong? It is. Is the complexity and the big deal component of that as strong as it's been in the recent past?
Yes. I think it's natural to expect in the medium term for it to be in that range. We're having a very good year. You're right. Outside of GE. GE is obviously having a great year, but outside of GE. Absolutely right. Please.
Hi, I'm sitting in the front, and it's the longest journey for the mic. Keith Bachman from BMO. I wanted to ask two. One was on GE, you mentioned flat EBITDA, like that four-plus range. How do you think about GE over the next two to three years? What's the signpost you're getting as they unfold the journey? Tiger, I did want to come back a little bit on competition. You alluded to, I think Accenture is who you're seeing most frequently. How is the nature of that changing since the market seems to be filtering up the top on the BPO work between yourself and Accenture? If you could also just comment on the other Indians who are struggling in the financial services and therefore trying to get more into BPO work. How might that change pricing or some of the other dynamics, particularly in that vertical?
The Indian legacy IT players in the BPO space have always competed on price. That's been their real first weapon to compete. To some extent, that hasn't changed. Are different players in that space visible? They've always been. Whether you take a TCS or Cognizant or Infosys and Wipro. I don't particularly see that as being any different. A number of them are also trying to get more digital in the technology stack, which is a much bigger stack for them. I'm not so sure that necessarily, it's a question of where do they pay attention? We don't see them significantly shift towards our kind of a space across the board. Accenture, for sure.
As I said, when we compete, our competition and the basis of our competition is not the usual things that you would anyhow expect from both of us, global delivery capabilities in the particular space, whether it's a service or an industry, bringing all the technologies to bear there. Our differentiation tends to be the way we approach outcomes, the way we approach driving end-to-end in order to deliver those outcomes. The way we get specific in delivering those end-to-end outcomes using digital and analytics, which they have a lot, but the specificity of what we bring to the table is where when we win, we win. Your other question was on, yeah. If you look at the last five or six years, seven years, eight years with GE, actually the last 10 years with GE, it's always been a function of the way GE has changed.
Beyond saying that we have a great relationship, we've always been, and we continue to be focused on delivering to all the promises that we've always made, delivering on the outcomes that we are focused on, bringing all the new technologies and solutions that we're building for some other clients into their operating space. Then it's a function of how they change. I don't think I'll be able to comment on how they change. I think across the board, across a range of their businesses, we are in the right conversations at the right places and understand their trajectory every time they make a decision for us to be able to nimbly change.
Our projection for the future is based on, we have a significant penetration in the work we do for them, and we are not assuming that there's going to be another repeat of the kind of growth that we've had this year.
Continue to win new work while we're continuing to deliver the commitments on productivity, right? That's every year we're winning new work just to stay at that flattish level.
That's a given. I mean, that's a given for all our clients. We bring all the technologies to actually compress the work that we are doing, deliver value in that work, automate that work, bring machine learning and AI to that work. That gives us the right to win more work. If the businesses that GE has grows, then by definition, the work that we do will grow with them.
Still fair to say that they are kind of out in front in terms of what they get us into, right? In terms of the most complicated things, they're one of the first ones to come to us and say, "Can you guys do this"?
Yes. Go ahead.
I was curious if you've been impacted by any clients moving work in-house over the last two years, and does the change in the model reduce that risk, or are we getting more mature in the new model such that clients might think about insourcing again?
We have been impacted by clients moving back work into themselves, insourcing work, but not any different than in the past. Every year, there's always one or two clients who decide, across a range of our top 200, 300 clients, to do that. There's no pattern to it from an industry, at least that I could call out. There's no pattern to it from a services perspective. The pattern that exists is leadership change, is the one pattern that I'd call out. If a set of leaders have a certain perspective on what they think is the right way to drive change, and they believe that it's better for them to own it to drive change, then that can happen.
Will that happen less or more in the future? I think at that rate, it's small enough. I don't think it's going to be any different, but it's going to be there. It's par for the course.
Bryan from Cowen. We're hearing obviously a lot more emphasis around design, around product engineering. Can you talk a bit about how the M&A pipeline has changed the composition of that pipeline? How are you seeing valuations in it, and what about the competition that you might be facing in that new pipeline?
A lot of our acquisitions of capabilities have been businesses and companies that we, at least in many cases, have partnered with before we acquire. It's allowed us to actually engage together, create the value proposition together, take it to clients together. A number of them have therefore been not a competitive process. It's been a sole source. That's reflected three years later by those same leaders continuing to being in the company, driving bigger agendas in the company. I don't expect that to change as we go into the future. There'll be one or two instances where we would compete.
Competitors would be, depending on if you're talking about a consulting digital kind of capability that we've acquired in the recent past, that's the kind of acquisitions that we would have in our pipeline today as we look for more capabilities, for example, in data engineering, or we look for more capabilities in experience, or we look for more capabilities in a particular domain. The nature of our pipeline of acquisitions is completely driven by strategically what are the choices we have made, and in order to deliver to those choices, what are the capabilities that we either have to build or partner or buy.