India BPO Industry Overview

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India BPO Industry Overview
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Table of Contents

• Executive Overview
• Emerging Trends of BPO
• Indian BPO market Key highlights and trends
• Phases of ITES-BPO Evolution in India
• Key enablers for growth of BPO in India
• Impact of BPO on Indian economy
• BPO Services Spectrum
• PATNI -BPO SERVICES Mapping of BPO and KPO
  processes on complexity grid
• Patni approaches towards Hiring and Retention
• Patnis Differentiators

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Executive Overview

• BPO A structured arrangement between an
  organization and an outsourcing partner to
  perform services, otherwise conducted in-house.
• Until few years ago, BPO was a means to achieve
  cost efficiencies in transaction intensive back
  office business processes
• This resulted in both tangible benefits like
  reduction in cost, and intangible benefits such
  as focusing on more strategic issues.

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Emerging face of BPO

• BPO is emerging as a key management tool, the
  focus of which is expanding beyond the non-core
  areas, giving an organization flexibility to
  achieve a certain set of tactical and strategic
  goals.
• Organizations opt to undertake BPO because it
  offers them advantages of cost, speed to market,
  competitive capabilities, stimulus for growth and
  both the time and space to focus on their own
  core competencies.
• As the scope of BPO increases, so does the level
  of complexity involved in managing partnerships,
  structuring deals, and capturing values.
  Consequently, older paradigms of BPO no longer
  hold true.

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Indian BPO market Key highlights and trends
Break-up of Indian BPO Experts
Source NASSCOM Strategic Review 2007

• BPO in India is growing at 32 and is estimated
  to cross 8.63 billion in 2007
• Direct employment in BPO was 415,000 in 2006 and
  is expected to cross 545,000 in 2007
• Indian IT-BPO industry has helped create an
  additional 3 million job opportunities through
  indirect and induced employment, which will go
  upto 6.5 million by 2010
• The contribution of BPO IT to Indias GDP will
  rise to 5.4 by 2007, against 1.2 in 1998
• The industry is moving from transaction
  processing voice to complex knowledge based
  services

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Phases of ITES-BPO Evolution in India

• Operational cultures previously seen only in
  western shared services centers were developed
• Large operations high quality infrastructure
  was built
• Development of delivery processes legalising
  shift work for men women
• Low resistance to offsshore outsourcing

• Improving risk profile of the business
  model-supply-side still perceived to be immature
• Early movers display advantage of acale
• Credibility of business model reinforced
  perceived risks dealt with satisfactorily
• Initiation of work on process regulatory
  standards
• Rise in anti offshore backlash

• Widespread global acceptance of the economic
  imperative of global sourcing
• Proliferation of players, service lines
  sourcing destinations
• Changing cost economies decline in labour
  arbitrage offset by leveraging processes SGA
  efficiencies and scale
• Shift towards higher order, cost plus benefits
  from global sourcing
• Maturity of processes regulatory standards in
  industry

Phase 1 1996-2000 Pioneers focus on building
scale. Absence of vendors with exhibited
capabilities. Preference for the captive
model Source IBM Consulting Services
Phase 2 (200-2003) Early adopters sharpen
outsourcing strategy. Rise of 3PSP
Phase 3 (2003-2008E) Cautious followers embrace
outsourcing unconditionally. Higher degree of
consolidation shake out
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Key enablers for growth of BPO in India

• Large pool of English speaking talent
• 3.1 million graduates pass out of Indian Colleges
  annually comprising of 151,000 Engineering
  100,000 IT Graduates

Large English-speaking Talent Pool

• Highest number of Quality certified Delivery
  centers in the world (including ISO27001, BS7799,
  SEI CMM, SEI PCMM, COPC, eSCM etc)
• Initiatives Investments in ensuring highest
  level of Data/Information Security

Emphasis on Information Security Quality

• Rapid growth in critical business Infrastructure
  like Telecom, Internet Connectivity, Real Estate,
  Roads, Transportation etc
• Strong emphasis by government on building
  enhancing support Infrastructure

Focus on Business Infrastructure

• Indias attractiveness is enhanced by progressive
  tax reforms strong regulatory framework
• Government support through incentives non-
  financial assistance

Business Policy Regulatory Environment

• Stable market with a thrust on growth and
  globalization
• India has created a BPO business friendly
  environment through progressive policies (STPI
  SEZ)

Progressive macro-economic environment
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Impact of BPO on Indian economy
Job creation (Direct Indirect)

• BPO offers a big employment avenue for Indias
  vast population base
• Direct employment of 415,000 people in BPO, with
  3 million indirect employment in 2006

• 8.5 GDP growth in 2006, a major contributor was
  the growth in services sector including IT BPO
• BPO and IT industries are a key contributor to
  India current Forex reserves of 194 billion

GDP growth
Rising income levels and purchasing power of
people

• BPO offers employment to millions of people with
  competitive remuneration
• 415,000 people employed in BPO are a key
  constituent of the growing affluent class of
  people
• Purchasing power of 3 billion of the people
  directly employed in BPO in India

Development Upgradation of Infrastructure

• Many MNCs and Indian companies have invested
  billions of in creating infrastructure
• Robust telecom, internet connectivity, roads,
  logistics and ancillary support infrastructure

Positioning in the global marketplace

• India has emerged as a global IT and BPO hub
  globally positioned as the number 1 destination
  for BPO and IT services

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BPO Services Spectrum

• Financial Accounting
• Management Reporting
• Revenue Accounting
• Order to Cash
• Record To Report
• Procure to Pay
• Fixed Asset Management

• Commercial prospect evaluation for new
  innovations
• New product development support
• Data mining, programming, data analysis
• Patent drafting filing support
• Analytics
• Business intelligence
• Target segmentation
• Pricing analytics

• Staffing Mgmt
• Resume filtering
• JD development
• Initial CV screening
• Staffing administration
• HR Service Administration
• Employee data mgmt
• Leave scheduling tracking
• Attendance management
• Employee service
• Employee helpdesk

Finance and Accounting
RD and Product Design
Support
HR
Technology Helpdesk operation
Business operations
Inbound Logistics
Outbound Logistics
Sales Marketing
Customer Service

• Application Support
• ERP
• CRM
• Portal Support
• Content Management
• IT Helpdesk
• Desktop Support
• Networking Support
• Web Support

Core

• Customer support
• Billing query resolution
• Order management
• Account maintenance
• Order booking
• Email/Chat support
• Collections

• Strategic Sourcing
• Spend analysis
• RFX management
• eAuction support
• Category Management
• Sourcing support
• Contract compliance management
• Spend reporting
• Process Management
• Invoice management
• Custom analytics

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Moving towards KPO

• India KPO services market is expected to
• Grow from 1.2 Bn to 15.5 Bn in 2010
• CAGR of 43
• Hold 71 of global KPO market in 2010 from 56
  in 2004

Source NASSCOM McKinsey Study- India IT
Strategies, Evalueserve
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PATNI -BPO SERVICES Mapping of BPO and KPO
processes on complexity grid
High
High
IT Helpdesk
Actuarial Services
Defined Benefits
Benefits Coding
Claims Adjudication
Revenue and Benefits Admin
ERP/Apps Support
Fund Administration
AP / AR
Financial Reporting
Revenue Assurance
Complexity
Credit Cards Application Processing
Claims Processing
Defined Contribution
Code Support
Payment Processing
Expense Processing
Customer Support
Web Content Management
Health Welfare
Health Insurance Application Processing
Low
BPO
Knowledge Services (KPO)
Knowledge Intensiveness
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Patni approaches towards Hiring and Retention
Patni attracts the best talent in the industry
by simply giving responsibility early on to its
employees- Business Today
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Patnis key differentiators
Past track record

• Over 29 years of experience in servicing global
  clients
• Large strategic global relationships with Fortune
  500 organizations

• Patnis IT BPO organizations are tightly
  integrated
• Joint Project Governance Relationship
  Management

Integrated IT-BPO Solutions

• Flexibility in engagement and program design
• Flexibility in scaling-up operations
• Agility in deployment of best-of-breed resources

Flexible and Scalable Delivery Model

• Robust Transitioning Toolkit Program Migration
  Methodology
• Offshoring Assessment through SCOPE methodology

Established transitioning methodology

• Year on year productivity gains to sustain
  significant cost benefits
• Six Sigma based Process re-engineering and
  automation to enhance cost savings

Year-on- year productivity gains

• Global Service Delivery Footprint
• Experience in providing Multi-lingual Support
  from India China covering languages like
  English, Spanish, German, French, Chinese,
  Japanese and Mandarin

Multi-lingual Support Capability

• Six Sigma based process improvements
• Robust quality model to achieve defect free
  delivery
• Operational best practices implementation

Six Sigma capability

• Maximization of cost take-outs through
  competitive pricing model
• Reward and Penalty based structure to drive
  competitiveness

Competitive Pricing
Business Transformation capability

• Business Transformation and Consulting Practice
  to assist clients to draw a clear roadmap for
  redesign and improving business services

• Best in class people management practices to
  attract and retain talent
• Low attrition rate compared to industry standard

People practices