PATNI BPO

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India BPO Industry Overview

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Table of ContentsExecutive 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

gridPatni approaches towards Hiring and RetentionPatnis Differentiators

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Executive OverviewBPO A structured arrangement between an organization and an outsourcing partner to perform services, otherwiseconducted 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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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 andspace 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.

Emerging face of BPO

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Source: NASSCOM Strategic Review 2007

Indian BPO market: Key highlights and trends

46%

40%

3%

11%

Customer I

Services

F&A

HR

Others

BPO in India is growing at 3 2% and is estimated to cross $ 8.6 3 billion in 2007

Direct employment in BPO was 4 15 ,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 inducedemployment, 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

Indian B PO Exports

3.104.60

6.30

8.63

11.82

-2

4

6

8

10

12

14

FY 2004 FY 2005 FY 2006 (E) FY 2007 (E) FY 2008 (E)

U S D

B i l l i o n

46%

40%

3%

11%

Customer InteractionServices

F&A

HR

Others

Break-up of Indian BPO Experts

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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 &

SG&A 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

3 PSP

Phase 3 (2003-2008E)

Cautious followers embrace

outsourcing unconditionally.

Higher degree of consolidation

shake out

Phases of ITES-BPO Evolution in India

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Key enablers for growth of BPO in India

Emphasis on InformationSecurity & Quality

Large English-speakingTalent Pool

Progressive macro-economicenvironment

Focus on BusinessInfrastructure

Business Policy & RegulatoryEnvironment

Large pool of English speaking talent3 .1 million graduates pass out of Indian Colleges annually comprising of 1 5 1,000 Engineering &100,000 IT Graduates

Stable market with a thrust on growth and globalization

India has created a BPO business friendly environment through progressive policies (STPI & SEZ)

Highest number of Quality certified Delivery centers in the world (including ISO27001, BS7799, SEICMM, SEI PCMM, COPC, eSCM etc)

Initiatives & Investments in ensuring highest level of Data/Information Security

Rapid growth in critical business Infrastructure like Telecom, Internet Connectivity, Real Estate,Roads, Transportation etc

Strong emphasis by government on building & enhancing support Infrastructure

Indias attractiveness is enhanced by progressive tax reforms & strong regulatory frameworkGovernment support through incentives & non- financial assistance

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Impact of BPO on Indian economy

J ob creation (Direct &Indirect)

BPO offers a big employment avenue for Indias vast population base

Direct employment of 4 15 ,000 people in BPO, with ~ 3 million indirect employment in 2006

GDP growth

Rising income levels andpurchasing power of people

Development & Upgradationof Infrastructure

Positioning in the globalmarketplace

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 $ 19 4 billion

BPO offers employment to millions of people with competitive remuneration4 15 ,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

Many MNCs and Indian companies have invested billions of $ in creating infrastructure

Robust telecom, internet connectivity, roads, logistics and ancillary support infrastructure

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

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BPO: Services Spectrum

Finance and AccountingR&D and Product Design

HRTechnology & Helpdesk operation

I n b o u n

d

L o g

i s t i c s

B u s i n e s s

o p e r a

t i o n s

O u

t b o u n

d

L o g

i s t i c s

S a l e s

&

M a r k e

t i n g

C u s t o m e r

S e r v

i c e

Financial AccountingManagement ReportingRevenue AccountingOrder to CashRecord To ReportProcure to PayFixed Asset Management

Customer supportBilling query resolutionOrder managementAccount maintenanceOrder bookingEmail/Chat supportCollections

Commercial prospect evaluation fornew innovationsNew product development support

Data mining, programming, dataanalysis

Patent drafting & filing supportAnalytics:

Business intelligenceTarget segmentationPricing analytics

Staffing MgmtResume filteringJD developmentInitial CV screeningStaffing administration

HR Service AdministrationEmployee data mgmtLeave scheduling & trackingAttendance management

Employee serviceEmployee helpdesk

Application SupportERPCRM

Portal SupportContent ManagementIT Helpdesk

Desktop SupportNetworking SupportWeb Support

Strategic SourcingSpend analysisRFX managementeAuction support

Category ManagementSourcing supportContract compliance managementSpend reporting

Process ManagementInvoice managementCustom analytics

C o r e

S u p p o r t

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Moving towards KPO

Established opportunities

Customer interactionservices

Finance and accountsservices

Engineering design services

HR services

Animation

Translation, transcriptionand localisation

Rapidly evolving opportunities

Network management

Distribution productdevelopment

Data search, integration andanalysis

Marketing servicesSecretarial services

Web site services

Remote education

Customer Analytics

Latent opportunities

Equity Research

Logistics management

Consulting services

Monitoring servicesLegal advice

Medical advice

Source: NASSCOM McKinsey Study- India IT Strategies, Evalueserve

India KPO services market is expected to:G row from $1.2 Bn to $15.5 Bn in 2010CAGR of 43%Hold 71% of global KPO market in 2010from 56% in 2004

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PATNI :-BPO SERVICESMapping of BPO and KPO processes on complexitygrid

BPO Knowledge Services (KPO)

High

Low

CodeSupport

RevenueAssuranc

e

CustomerSupport

Health InsuranceApplication Processing

Web ContentManagement

Revenue andBenefitsAdmin

ClaimsProcessing

Defined Contribution

FundAdministration

ActuarialServices

BenefitsCoding

ExpenseProcessing

High

C o m p l e x i t y

Knowledge Intensiveness

FinancialReporting

IT Helpdesk

ERP/AppsSupport

PaymentProcessing

Credit CardsApplicationProcessing

AP / AR

ClaimsAdjudication

DefinedBenefits

Health &Welfare

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Patni approaches towards Hiring andRetention

Selection ToolsAptitude testLanguage Proficiency Test

Technical TestGroup DiscussionsTechnical/Functional InterviewFinal HR Interview

Hiring

Retention Program: Bank @ Patni PlanWell Defined Career PathQuarterly Skip Levels Meetings

Competitive salariesQuarterly Fun OutingsReward & Recognition SchemesPerformance Based Incentives SchemesRetention ProgramsCompensation linked to performanceEmployee Satisfaction SurveyParents visit to facility

Employee Satisfaction & Retention

Patni attracts the best talent in the industry by simply givingresponsibility early on to its employees- Business Today

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Patni s key differentiatorsPast track record Over 29 years of experience in servicing global clientsLarge strategic global relationships with Fortune 5 00 organizations

Integrated IT-BPOSolutions

Patnis IT & BPO organizations are tightly integratedJoint Project Governance & Relationship Management

Flexible and ScalableDelivery Model

Flexibility in engagement and program designFlexibility in scaling-up operationsAgility in deployment of best-of-breed resources

Established transitioning

methodology

Robust Transitioning Toolkit & Program Migration Methodology

Offshoring Assessment through SCOPE methodology

Year-on- yearproductivity gains

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

Multi-lingual SupportCapability

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

Six Sigma capabilitySix Sigma based process improvementsRobust quality model to achieve defect free deliveryOperational best practices implementation

Competitive PricingMaximization of cost take-outs through competitive pricing modelReward and Penalty based structure to drive competitiveness

Business Transformationcapability

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

People practices Best in class people management practices to attract and retain talentLow attrition rate compared to industry standard