Transformation

Leveraging Transformation & Operational Excellence in ITes Industry

ASSOCHAM

K.V.Rama Mohan 20 December, 2006

2

The Infosys BPO Story

• Established in 2002, rapid organic growth• Focus on end-to-end outsourcing• Today among Top 10 third party BPOs in India

Operations in India, Czech Republic, Philippines (through a partner), China

Revenues, $m Customers Employees

Do it cheaper

Do it better

Do it differently

Eliminate work

Cost gains

Efficiency gains

Transformation gains

The Infosys BPO transformation promise

Tra

ns

form

ati

on

al

BP

O

3966

7021

9776

FY05 FY06 Q2FY07

1922

28

FY05 FY06 Q2FY07

43

85.5102.2

FY05 FY06 LTM

3

Our focus areas - horizontals

Functional (horizontal) solutions

Customer serviceContact Centers for Sales, Service & Helpdesk, Customer Service for Telecom, Manufacturing, Distribution, Financial & Service industries

Finance & AccountingAccounts Payable, Accounts Receivable, Collections & Credit Management, Billing & Invoicing, Fixed Assets, Intercompany, General Ledger, Finance Planning & Analysis

HR Outsourcing Recruitment & Staffing Support, Workforce Deployment, HR Administration, Benefits Administration, HR Helpdesk

Knowledge ServicesCredit Analysis, Equity Analysis, Economics Research, Industry & Company Analysis, Financial Planning & Accounting, Presentation Support, Analytics

Order ManagementQuoting, Order Entry, Order Management, Expediting / Substitution, Contract Renewals & Management, Customer Support, Logistics Support, Returns Management

Procuremente-Business Solutions, Tactical Procurement, Strategic Procurement, Compliance & Performance Management, Spend Analytics

Contd.

4

Our focus areas - verticals

Industry (vertical) solutions

Banking Retail Banking, Mortgages & Consumer Finance, Credit Cards, Cash Management & Treasury, Trade, Credit Administration

Capital Markets Broker-Dealers, Transfer Agency, Fund Administration, Custodian Services, Asset Management

Communication Service Providers

Service Assurance, Service / Order Fulfillment, Billing & Revenue Assurance, Data Cleansing & Validation, Content Development & Review.

Hi Tech & DiscreteManufacturing

Quoting & Demand Fulfillment , Material Planning & Sourcing, Master Data Management, Product Data Management, Mid Office Support, Customer Operations, Supply Chain & Logistics Support

InsuranceAssurance, Life & Pensions, General, Property & Casualty, Life & Health, Revenue cycle management, Underwriting, Billing, Denial management, Claims adjudication, Customer service

Healthcare & Life SciencesScheduling, Registration, Charge capture & coding, Billing, Follow up, Customer service operations,   Enrolment, Policy maintenance, Claims   administration, Customer service, Collections

Automotive and Aerospace Finance and Accounting, Analytics (FP&A), Expense Management Retail Services (Auto Finance, Aftermarket sales), Services (Warranty Management, After Sales Service), Indirect procurement (T&E, Spend Analytics), Order Management (Quote to Cash), HR services and CRM.

Retail & CPG Store Solutions, Master Data Management, Supply Chain Solutions , Content Management, Analytics & Knowledge Solutions

Transportation & Services Customer Booking, Documentation (Bill of Lading, Delivery Order, Arrival Notices), Tariff filing, Contract maintenance, Claims Handling, Hazardous cargo approvals, Business system support/ helpdesk, Revenue Accounting, Reservation Services, Lost Baggage Handling, Customized procurement, Direct Marketing and Analytics.

Resources, Energy and Utility Mapping Services, Engineering Services, Expense Management, Industry specific - Finance and Accounting, Order Management, Knowledge Services & Analytics, HR Services, Customer Service

5

Representative clients

Global Commodity Manufacturer

Accounts PayablesAccounts ReceivablesGeneral LedgerFixed Asset Accounting

Large Global Custodian (US/EU)

Asset/Cash Recon, Trade Settlements, Corporate Actions, Sub-custodian fee billing, Tax reclaim, AP, Stock transfer

Investment Manager (US)

Employee administrative services like Defined Benefits, Defined Contributions, Health and Welfare, Payroll

Global Office Services Provider

Customer service and support Revenue AssuranceAccounts Payables

A world leader in a primary metal

Inventory PurchasingLow Value BuyingExpeditingBlanket Purchase Order

Maintenance

Global Investment bank (UK)

Credit AnalysisFixed Income Research Economic Analysis Industry analysisCompany analysis

US based Car Rental Company

Accounts PayablesAccounts ReceivablesBillingCollections

Investment bank (US/UK)

Stock and Cash reconciliation, reference data management, preliminary research and presentation

Mortgage Bank (US)

Mortgage loan underwriting, document preparation, post closing and servicing, including customer care and queries

Leading Telecom Provider (UK)

Directory Inquiry Services Fault Line ReportingPost-service Customer satisfactionNew business acquisitions

Insurance arm of a re-insurance co.

Underwriting of Property, Excess, MGA lines of business, All rule based underwriting including new and renewal

Global Hi-tech manufacturer

Sales Order Management Sales SupportHR Administration, HelpdeskLegal Administration

6

Transforming the client's operations is the end state of our operations excellence vision

Do it cheaper

Do it better

Do it differently

EliminateWork

Cost Saving

Efficiency

Processes Functions Products Business

Transformation

• Global delivery model (India, Czech, Australia, Philippines, China, LatAm)

• Front end automation• Adaptive operating model

• Process backboning• Six sigma • Benchmarking• Technology augmentation

• Role reengineering• Shop floor automation• STAR• Process & org restructuring• Inter & Intra industry best practices

• Integrate technology capabilities to eliminate work

• STP (Straight through processing)

• Value added reporting / analytics

• Business assurance

7

Transformation

The Business Transformation Group brings in diverse skills to transform processes and products

Six Sigma Methodologies

Business Process Reengineering/

STAR (Lean)

Technology Data Analytics

BTG

TSG Consulting Quality

8

Key Transformation Drivers … and initiatives to support them…

• Performance visibility / dashboards• Automated workflow and authority levels• Regulatory (e.g. Sarbanes-Oxley) and

contractual compliance

• Reduced cost of operations• Leveraging committed investments• Focus on converting fixed costs to

variable• Increased Process Efficiency through

process improvement and technology augmentation

• User experience• Predictability of operations through

process compliance and standardization

• Analytics to support customer acquisition and retention

Compliance and Control

Stakeholder Satisfaction

• Distributed processing capability and enablement

• Faster product / service / locational rollout

• Conversion from people to process dependency

Positioning for future

TransformationalBPO

Asset Efficiency

9

Business Transformation – How to reach there?

BusinessTransformation

Six sigma projects

STAR projects

Other engagementinitiatives

10

A common understanding of Operations Excellence is essential to ensure its implementation

Operations Excellence is Infosys BPO’s roadmap to a differentiated client experience, by consistently exceeding service delivery metrics and

measurably transforming our client’s business

Key Terms

Road Map: This is an ongoing journey. There is no end-state, only milestones

Differentiated Experience: It has to be measured on the total experience that the client has in working with us and its impact on the client’s customers

Service Delivery Metrics: Exceeding service metrics should be pegged as the minimum delivery on client expectations

Measurably Transform: Doing it better than the client and measurably transforming the process should be the goal (a process is Transformed only if we can show the dollar benefit)

11

The focus has to be on delighting our client’s customers

An experience that consistently

delights our client’s customers and

demonstrates our superior execution capability and transformational improvements

WE WILL DO IT BETTER THAN HOW OUR CLIENTS DID IT

12

This exercise will help us see our reflection in the mirror

Are We:

• Truly client centric??

• Truly people centric??

• Passionate about driving excellence??

• Doing all that we can possibly do to excel in things that are under this group’s control??

13

Delivering Operations Excellence

Operations Excellence Management System

Operations People Risk

Self Assessment Framework

Infrastructure

•Floor Management•Rostering•Monitoring•Capacity planning

•Quality Management•Process Control &

improvement•SLA Reporting

•Customer Portal•Knowledge

Management

ENABLERS

•Process specific risks and mitigants

•Security•Physical•Data•Network

•Disaster Recovery•Business Continuity

Planning•Regulatory

compliance

•Monitoring telecommunications network

•H/W & S/W maintenance

•Facilities management

•Employee facilities•Transport•Food •Wellness center

• Perfomagic – Performance Appraisal System

• Serve Centrale• Vendor alliances

• SLATE• I-Lite Training System • Pro-Vista Customer Portal• Project allocation system• Leave System

•Skill-based Recruitment

•Training & Employee development

•Performance Management

•Career Planning•Performance

improvement plans•Process Complexity

Model

Governance Structure

Organization wide tool to drive Ops Excellence

14

• OPERATIONS PERFORMANCE (“Running the business”):

– Measure each process and engagement on

• Are processes In Control?

• Are they Capable?

• What is the Sigma level ?

• Score on Self Assessment Framework?

• OPERATIONS EXCELLENCE (“Changing the business”)

– Map every process on our transformational journey of - Doing it Cheaper, better,

Differently and Elimination of work

– Measure the transformation in Dollars

• CSAT Score – Our Customer and their customers

Operations excellence is a measure of the operations performance, excellence and Customer Satisfaction

15

Infosys BPO’s Operations Excellence Components

• Self Assessment

• Process Capability and Stability

• Transformational Dollar Savings

• CSAT

Besides

• Methodologies (Discovery , Operations , Transition) & Certifications

• Risk Assessment

• Certifications

• Business Excellence

16

The KEY GOALS

BUSINESS GOALS :Revenues and Gross Margins

PEOPLE GOALS ;• Attrition• Internal Governance• Team lead touch time with agents• Team lead process certification• Domain Training and Certification on skills• E sat

PROCESS GOALS :• Process Control, Stability, Capability (Sigma scores). • Self certification• External governance• C sat

17

THE KEY GOALS

TRANSFORMATION GOALS :

• Continuous improvements – Six Sigma initiatives

• Client Business knowledge and drivers

• Revenue productivity

• End customer focus

• Value addition to client in terms of Dollars

18

The need for iSOP Program - Infosys perspective

• To handle Growth and Scalability related challenges

• To manage business unit performance and its integration with Corporate

• For improvement in overall effectiveness and capabilities at organisation level

• For learning, reuse and knowledge sharing at organisational, business unit and personal level

• For identifying and addressing systemic issues within all units

19

Journey To Performance Excellence

0 – 250: Early Development0 – 250: Early Development

251 – 350: Early Results251 – 350: Early Results

351 – 450: Early Improvements351 – 450: Early Improvements

451 – 550: Good Performance451 – 550: Good Performance

551 – 650: Emerging Industry Leader551 – 650: Emerging Industry Leader

651 – 750: Industry Leader651 – 750: Industry Leader

751 – 875: Benchmark Leader751 – 875: Benchmark Leader

876 – 1000: World Leader876 – 1000: World Leader

Infy

+In

fy+

20

Benchmarking : Stages of improvement

World ClassRecognized as the best Benchmarked by others

Best in ClassExceeds customer expectations,outperformsall direct competitors and has clear competitive edge

EfficientMeets all internal requirements for cost margins,asset utilization,cycle-time and measures of excellence

IncapableIs ineffective , inefficient and at the risk of failing.Needs major redesign

EffectiveSatisfies all customer requirements

21

We believe that a successful model involves…

• Multiple small steps to achieve a larger objective

• Benchmarking and understanding of Processes

• Multiple initiatives that include

– Continuous improvement and monitoring

– Process reengineering

– Technology Augmentation

• Participation from all stakeholders towards a commonly agreed goal along all

stages of a BPO engagement

• Ongoing measurement and control of transformation initiatives and objectives

22

Any initiative encounters multiple challenges and it is important to understand them

• Client organization to support transformation

– Governance structure to enable the smooth implementation and monitoring of transformation

initiatives

– Stakeholder buy in / Management

• Change management

– Every transformation results in change at some level or the other. Effective identification of

the impact and change management capability is crucial

• Operational stability

– Multiple moving parts is not desirable to enable a focused approach to transformation

• Synergy with clients transformational initiative

– Ensure that the initiatives are in synch with parallel organizational initiatives

• Impact on upstream and downstream processes

– Transformation does not work in isolation, it has a significant impact on upstream and

downstream processes and it is important for the stakeholders to be bought it

• Legal and Regulatory compliance

• Business case

– Last but not the least – the initiative has to make commercial sense

23

“Good is not good where better is expected”

Thomas Fuller

British author

“Good is not good where better is expected”

Thomas Fuller

British author

WE WILL DO IT BETTER THAN OUR CLIENTS AND COMPETITORS

Thank you!