CDK’s massive outsourcing plan could affect customer service in uncertain ways

CDK counted 9,181 automotive DMS customer sites as of Dec. 31, 2021, and reported that roughly 15,000 automotive customers used its products in North America as of March 31, 2022. It was still a public company at the time, but Brookfield Business Partners took CDK private in July in a deal worth about $8.7 billion.

MacDonald had led CDK from January 2016 through November 2018 and returned as CEO after the Brookfield deal.

“When we took over the company, we told the employee base one of the key priorities would be getting fit and focused, and focused on what we want to do and be really good at that and deprioritize [other] things,” MacDonald said in January.

Macrito said staff members who agree to transfer to Genpact will gain from “new opportunities for career advancement and skill development with a large, fast-growing, globally admired company.”

Genpact describes itself as a global professional services company that employs 115,000 people around the world and supports 800 global clients. It also generated $4 billion in annual revenue as of 2021, according to its website.

Macrito said Genpact was selected after a “very thoughtful and thorough review and bid process” with a number of outsourcers. Genpact “has deep experience in the automotive industry” and will help CDK achieve “best practices, innovation and thought leadership used by leading technology companies,” he added.

Genpact, MacDonald said in his email, can also tap into “a pool of talent” with “skills in digital platforms, tooling and software automation” that can boost CDK’s efficiency and effectiveness.

“Given the tight labor markets in India and North America, it would take us much longer to recruit, hire and train the number of people we need” to support CDK’s growth initiatives, MacDonald said.

Gillrie said he hopes for the best as CDK’s transition gets underway.

“There’s a route where the layoffs and this outsourcing is all happening because they’re turning all their attention toward modernizing and improving the current product,” Gillrie said. “If all of these moves are facilitating that … and if we start seeing a very updated and slick new version of CDK coming out in the next year or two, then that will be fantastic for dealers.”