Should outsourcers be outsourced?

Citigroup and General Electric pioneered the use of India's potential for providing cheap services to their global operations years before outsourcing became popular. But if their recent moves are any indication they have divergent views on the way they want to manage their businesses in the future.

Early this year Citigroup decided to take private its Indian business process outsourcing (BPO) subsidiary eServe International, which is listed on the local stock market. General Electric is spinning off its global business process operations, GE Capital International Services (GECIS), into an independent company.

On November 8, GE agreed to sell 60% of GECIS to Oakhill Capital Partners and General Atlantic Partners, two US private-equity firms, for $500 million.

GE says the decision to sell “was driven by the opportunity to realize significant value from GECIS's scale and...