Future of global operations

Presentation Title Goes Here

November, 2012

Playback available on https://learnatgenpact.webex.com/learnatgenpact/lsr.php?AT=pb&SP=EC&rID=18815472&rKey=C5C9F6BB94A25616

The Future of (Global) Operations

© 2012 Copyright Genpact. All Rights Reserved.

https://learnatgenpact.webex.com/learnatgenpact/lsr.php?AT=pb&SP=EC&rID=18815472&rKey=C5C9F6BB94A25616

https://learnatgenpact.webex.com/learnatgenpact/lsr.php?AT=pb&SP=EC&rID=18815472&rKey=C5C9F6BB94A25616

© 2012 Copyright Genpact. All Rights Reserved. 2

A Global Leader In Business Process Services: Process Transformation and Outsourcing, Analytics, Technology

About Genpact ► Overview

We help leaders of some of the largest enterprises transform and run their processes and operations, including the very complex and industry-specific

What we do

Unbiased, agile combination of process science, related technology and analytics limiting upfront costs and enhancing future adaptability

Right critical mass: we are large (62,000+ global staff) but our solutions appropriately flexible; our top management is directly involved in our client partnerships

How we do it Our impact

We help enterprises to bemore competitive by becoming more intelligent: adaptive, innovative, globally effective and connected…

…by enabling tighter management of costs, risks, regulations, and growth enablement

The results: US$22B* of impact for 800+ global clients

*US$22B is a cumulative figure since 2006


Who is Genpact

• GE spin-off, NYSE “G”

• 60,000+ associates

• Pioneer in global business process management

• Initial core F&A and Financial Services ops, now includes analytics operations, IT and process design/optimization – across industries

• Operations process as a science


Keynote SpeakerSpeakers for this session

Gianni Giacomelli Senior Vice President, Product Innovation Leader, Genpact

Gianni leads the corporate organization tasked to create scalable, productized services by weaving together Genpact’s process excellence, IT solutions and analytics capabilities.

His career spans 21 years across strategy and marketing, corporate business development, across three continents. He is based in New York.

Phil FershtFounder and Chief Executive Officer, HfS Research

Phil founded HfS Research in early 2010 and has overseen the growth and development of the organization to become the leading analyst authority and knowledge community for global business and IT services.

He is a prolific author, analyst and visionary for the global services industry, named "Analyst of the Year 2011” by the Institute of Industry Analyst Relations (IIAR). Phil is based in Boston.

4

http://analystrelations.org/2011/10/21/iiar-analyst-of-the-year-winners-2011-announced/


Agenda today

1. What’s at stake

B. Technology

A. People

C. Process

4. The way forward

2. Trends and implications



B. Technology

A. People

C. Process

4. The way forward



Operations to enable better the business they serve

Offense

Defense

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Today’s operations aims have moved beyond the traditional cost reduction…Importance of Program Objectives TodayRespondents from $3B+ Enterprises

Source: HfS Research and PwC 2012, N = 188 Respondents from enterprises with more than $3B in revenue

improve access to technology

Gain access to talent and capabilities

Drive cultural change

Improve compliance capabilities

Align support services with global corporate strategy

Transform processes (e.g. cross-functional process redesign, automation)

Support global growth strategy

Reduce costs

Increase scalability and flexibility of operations

Drive process efficiency (i.e. cycle time, quality)

0% 20% 40% 60% 80% 100%

Very Impor-tant

Somewhat Important

Not Impor-tant

% of Respondents

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…and require strategy - embracing new technology, practices and talent to move beyond incremental gains

Source: HfS Research 2012, N = 198 Buy-side Executives

Managing Transitions

Service Provider Selection

SLA Performance Management

Managing Financial Business Cases

Contract Negotiation

Influencing Executives

Adding Addition Volumes to Existing Services

Improving Industry Acumen

Improving Service Provider Relationships

External Benchmarking

Defining and Adding New In-Scope Processes

Driving Innovation

Raising the Bar for Existing SLAs

Defining Business Outcomes Beyond Cost Reduction and Efficiency

Improving Analytics

9%

11%

12%

13%

14%

14%

19%

20%

23%

24%

25%

28%

28%

28%

32%

Increase in importance

Q. How important are the following objectives to your team today, compared to when you first started your SSO program?



B. Technology

A. People

C. Process

4. The way forward



X?300,000

office support 2020 excess

200,000 data scientists gap per year

US example – the great shift impacts Ops

Source: McKinsey Global Institute


60% expect non-mainstream* work to become norm

The traditional office and

staffing model is under pressure

* Work from home, part time, performed by partners


Train, manage, motivate and retain

Span of management control

Utilization of facilities vs. vicinity

Intense travel

Young employees

Capacity balancing

Sudden changes and need for speed

Compliance and control


Out

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Operations also struggle with leadership, not just delivery staff, to drive the future agenda

Source: HfS Research 2012, N = 192 Buy-side Executives and 155 Sell-side Executives

Q. How difficult or easy has it been to attract and source talent for your team to perform the following activities?

The Same as Other Positions

More Difficult

!



B. Technology

A. People

C. Process

4. The way forward



Extinction?

Planner

Mail

Fax

Green-screen ERP


Do we understand inflections brought by…

Smart devices

Mobile broadband

VoIP

Accurate language translation


Social technology lays the foundation of radically richer collaboration

Source: Genpact, McKinsey


2.5 years, cost -50%

4G

3G

Bandwidth (last 10 years)

Penetration(US)

40 years

10

years

10 years 7 years


1.5 years pixels 2X better

82’ screens

Or 1’…your eyeFold, wear it

Walls as keyboards

Remote everything


Your office…

…your (Microsoft) Office…

…everyone’s office?

POLLWhere do you think new collaboration

technology and practices will have the most immediate effect?

1. Traditional offshore captives/BPO collaborating with onshore retained org

2. Traditional onshore regional centers collaborating with retained org

3. Work-from-home collaborating with office based org

4. Collaboration for new services e.g. analytics, FP&A, AML in captive/BPO

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B. Technology

A. People

C. Process

4. The way forward



Economic tension

Talent imbalances

Technology eliminates distance


The future of process is shared

90% of F&A organizations

50% of back or middle office organizations

1000s of miles average distance


You can’t beat scale…and its corollaries

Source: SAP ASUG 2007, Genpact analysis

Optimization

Scale

10X scale can cut 50% ofcost-per-unit-of-work

Standardization to scale

explains variance

“Co

st p

er u

nit

”R

atio

of

FT

Es

per

1000

em

ploy

ees

serv

ed

Company size Employees, log scale

* Benefits Admin

0

1

2

3

4

5

100 1,000 10,000 100,000

R2 = .90

Cost arbitrage

Cost per hour can be 70% less - for same skills globally, and to some extent regionally


ROUNDED/ESTIMATE

27

Rule based

Non-recoverable travel, staff welfare, meetings

Transport, cafeteria

Direct support

Telecom

G&A - personnel

Other infra OPEX

IT, software mainten.

Associate comp.

Recruitment, training

Direct supervision*

Bench

Rentals

97

Dir

ect

FT

EG

&A

ITIn

fra

Depreciation

Knowledge Basic data

83

GBS ImpactCost of delivery / FTE / year by process type

Source: McKinsey, Genpact analysis

Operations “production cost” can benefit from change

Early Mature


GBS levers impact key drivers of effectiveness

• Automated interface process within ERP system• Automated tool for inter-company transactions• Use of automated tick & tie/ reconciliation tool

• Global common chart of accounts• Standard policies/operating framework• Standardization & rationalization of IT systems• Synchronize edit checks between subsidiary and

parent books for better first pass yield• Standard policies/operating framework

EXAMPLE

Process optimization Scale

Labor arbitrage

Technology redesign

Standardization and pooling

Sharing best practices

Practice type

Impact of key GBS economic levers

• Recs prioritization• Documented reconciliation policy in place• Reconciliation dashboards published regularly• Standard policies/operating framework• Analysis of repetitive open items to reduce inflow

Source: Genpact experience

Highimpact

Noimpact

28

MaxMinimum MedianTime to report 30 4

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B. Technology

A. People

C. Process

4. The way forward


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Neither Satis-fied or Unsat-

isfied

Unsatisfied

Satisfied

However, Ops leadership issue must be addressedQ. How would you describe your satisfaction with your current role as it relates to…

Source: HfS Research 2012, N = 278 Buy-side Executives and 162 Sell-side Executives

Dissatisfaction with career opportunities Ops may dissuade the top caliber needed for real transformation


GBS is important and related choices can change, too

Corporate

Res

ultsSt

rate

gic

guid

ance

Service Requirements

Performance Contracts

ServiceRun processes efficiently,

drive best practices and valueProvide corporate governance and strategic

guidance, establish policies

Business Business Partner

GBS

Source: Genpact experience31

Internal Partner

Input

© 2012 Copyright Genpact. All Rights Reserved.32

Unified collaboration environments

Workflows

ERP backbone

SSC/BPO Client/Business

Adding the missing layer in operations’ flow of work


It is about people working together naturally

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Team Management

Strategy, brainstorming, designing

Knowledge sharing, updates, training

Query resolution, troubleshooting

Coaching

One-on-one, skip level, perf. review

Governance, monitoring

Compliance


GBS

NOWLoB 1

COUNTRY A

COUNTRY B

LoB 2

WFH

Knowledge worker Transaction worker

Conclusion: a practical vision of distributed and flexible talent - with technology and practices that keep pace

Source: Genpact analysis

34

GBS

FUTURE

REGION 1

REGION 2

LoB 1LoB 2

Unified collaboration

Contractor

[email protected]

[email protected]


About Genpact

Genpact Limited (NYSE: G) is a global leader in transforming and running business processes and operations, including those that are complex and industry-specific. Our mission is to help clients become more competitive by making their enterprises more intelligent through becoming more adaptive, innovative, globally effective and connected to their own clients.

Genpact stands for Generating Impact – visible in tighter cost management as well as better management of risk, regulations and growth for hundreds of long-term clients including more than 100 of the Fortune Global 500. Our approach is distinctive – we offer an unbiased, agile combination of smarter processes, crystallized in our Smart Enterprise Processes (SEPSM) proprietary framework, along with analytics and technology, which limits upfront investments and enhances future adaptability.

We have global critical mass – 62,000+ employees in 24 countries with key management and corporate offices in New York City – while remaining flexible and collaborative, and a management team that drives client partnerships personally.

Our history is unique – behind our single-minded passion for process and operational excellence is the Lean and Six Sigma heritage of a former General Electric division that has served GE businesses for more than 15 years.

For more information, visit www.genpact.com. Follow Genpact on Twitter, Facebook, and LinkedIn.

http://www.genpact.com/

http://twitter.com/

http://www.facebook.com/pages/Genpact/105635026136729

http://www.linkedin.com/company/210064?trk=tyah

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