KPO themes

1
Gearing for KPO Some issues related to
Transition, Delivery Commercials
2
Evolution of Knowledge Services in India
Stabilization 2005-2010
Growth (1999-2001)
Inception (1996-1998)
Consolidation (2002-2004)
Characteristics

• Captive Players to increase foothold in the
  Knowledge Services market.
• Market Share of Captive Players expected to
  increase to 68 in the year 2010 from the
  current 62
• Industry will comprise few large third party
  players along with the captives.
• Very few boutique firms likely to exist on a
  standalone basis
• Information Management and Analytics to fuel the
  market growth in the short run.
• Independent research for investment banks and
  large businesses to show traction going ahead

• Competition among Third Party players heat-up
• Market consolidation
• Collaborations between Third Party player

• Start of knowledge services
• Captive players enter the Indian market

• Large captive players enter the market
• Third Party players start cropping up

Examples

• 1997 - GE Capital Services establishes its back
  office operations

• 1993 - iGate Global Solutions (formerly Mascot
  systems) establishes its offshore center in
  Banglore

• 2001 Evalueserve, Irevna and Netscribes enter as
  Third Party providers

• 2002 ABN Amro and AT Kearney establishes their
  back office operations

• 1998 Some Captives (such as Frost Sullivan
  and Gartner) and third party players (such as
  Capital IQ) establish their operations

• 1996 - McKinsey conceives, builds and manages its
  Knowledge Center

• 2003 Morgan Stanley and Prudential establishes
  their back office operations

• 1999 Amex Opens its back office operation

• 2004 Crisil acquires Irevena

• 2000 Third Party market competition increases
  with Mphasis, FreshMind and Office Tiger opening
  their operations

• 2004 SP and McGraw Hills acquires Capital IQ

• 2004 ICRA and Bytes to Knowledge (B2K)
  collaborate to form Brickwork to offer financial
  services

3
The spectrum of Knowledge Services
Knowledge Services
4
Knowledge Services Employee Growth in WNS
300 Growth
400
5
Comprehensive industry-focused business units
Shared Services
(Finance Accounting, Human Resources)
Contact Center
(Phone, Web, Email, Correspondence)
6
KPO Process evolutiontwo specific examples.
Market Research Processes
Analytics Processes
1
1
Data Warehousing
Survey Design
2
2
Data processing
Survey Administration
3
3
Business Intelligence
Data Preparation
4
4
Analytical Intelligence
Data Processing
5
5
Statistical modelling/OR modelling
Analysis Presentation
7
Current Market Share Of Key Knowledge Service
Verticals by FTEs
Total 12,000
Source Nasscom, press reports and WNS Analysis
8
Key emerging issues for KPO (vis-à-vis BPO)
Selling Transition
Pricing

• Best practices for transition?
• Strategies for growth of KPO accounts?

• How to sustain the value proposition to the
  client?
• Maintaining healthy PL

Service Delivery
Contracts

• How should operations be organized for better
  financials and delivery conforming to client
  expectations?

• How to define SLAs for KPO process
• Duration of contracts?

Quality Risk Management
Governance Structures

• Business Continuity
• Information security compliance
• Inventorize information assets

• Onshore offshore mix
• Unbundling of roles Sales/Program
  Management/Operations

9
Selling Transitioning

• Synchronizing Sales and Operations
• Selling realistic scope of work
• Negotiating right SLAs
• Selling skills at the right price
• Selling the program evolution in conformity with
  the delivery constraints
• Transitioning of Knowledge process is job of
  specialist
• Choose the right specialist for diagnostics,
  process mapping and program management
• Consulting approach required
• Focus on solution design instead of adoption of
  processes as is
• Beware of delivery constraints (Ramp up times
  etc)
• Program evolution to be aligned to delivery
  constraints

Structured approach to sales and program
management is necessary and so is seamless
interaction between operations team with Sales
and PM team
10
Commercials

• Strong PLs at the program level is particularly
  necessary for high end processes.
• Both current as well prospective profitability is
  important
• Higher Seat Utilization is not always possible in
  KPO because of adhoc nature of work
• Watch out how you begin!!
• Technologies are getting intelligent redundancy
  of existing Knowledge processes
• Beware of hidden costs in KPO there are many!
• Pricing approach (whether FTE or UTP or hybrid or
  time based or deliverable) depends on firm
  specific factors, process specific factors and
  program specific factors
• Innovation and flexibility necessary
• Should be a derivative of business model

• Be scientific about pricing to the extent
  possible and to the extent possible be
  transparent with client on costs included

11
Contracts

• Difficulties in defining SLAs
• KPO Programs begin with mostly ad hoc or
  customized projects (sometimes as proof of
  concept)
• Shorter contracts (?)
• Standard times difficult to define. TAT could
  vary between 1 day to 20-30 days for complex
  projects
• Regular reporting work to ad hoc project work may
  be 2080
• No pre-defined process for creating deliverable
• Customization of contracts Do not depend on
  master template.
• E.g. analytics processes are different from
  Market Research processes
• Continuum of complexity
• Let the business model define the contract
• Need to contemplate on the governance structures
  before signing the contract
• Distinguish between transition phase and
  stability phase
• Define stability phase criteria for different
  set of projects
• Update the Scope of Work consistent with service
  delivery.
• Updation frequency will be greater than the
  normal BPO.

12
Service delivery

• Emphasize consulting delivery model at the
  strategic level
• Focus on solution design
• Invest in developing newer knowledge products
  (Supply creates the demand!)
• Partnerships with specialized vendors may be
  necessary
• Solution design Centers/Centers of Excellence
• Learning academies
• Tie ups with academic institutions will become
  necessary
• Right Recruitment is the key
• Knowing the DNA of skills sets is must
• 24 x 7 operation in KPO processes is not always
  desirable
• Single country multiple location service
  operations to multi-country can help achieve
  this.
• Multi-Country operations Global delivery model
  also paves way for stronger BCP.

13
Where to draw the line?
14
Thank you