Copyright © 2013 Everest Global, Inc. This document has been licensed for exclusive use and distribution by Infosys
Topic: Everest Group PEAK MatrixTM for PO Service Providers
Focus on Infosys November 2013
EGR-2013-1-E-0988
2 Copyright © 2013, Everest Global, Inc. EGR-2013-1-E-0988
Introduction and scope
Everest Group recently released its report titled “Procurement Outsourcing (PO) – Service Provider Landscape with PEAK Matrix™ Assessment 2013”. This report analyzes the changing dynamics of the PO landscape and assesses service providers across several key dimensions. As a part of this report, Everest Group updated its classification of 20+ service providers on the Everest Group Performance | Experience | Ability | Knowledge (PEAK) Matrix for PO into Leaders, Major Contenders, and Emerging Players. The PEAK Matrix is a framework that provides an objective, data-driven, and comparative assessment of PO service providers based on their absolute market success and delivery capability. Everest Group also identified five service providers as the “2013 PO Market Star Performers” based on the strongest forward movement demonstrated on the PEAK Matrix year-on-year. Based on the analysis, Infosys emerged both as a Leader and a Star Performer. This document focuses on Infosys’ PO experience and capabilities and includes: Infosys’ position on the PO PEAK Matrix Infosys’ year-on-year movement on the PO PEAK Matrix Detailed PO profile of Infosys
Buyers can use the PEAK Matrix to identify and evaluate different service providers. It helps them understand the service providers’ relative strengths and gaps. However, it is also important to note that while the PEAK Matrix is a useful starting point, the results from the assessment may not be directly prescriptive for each buyer. Buyers will have to consider their unique situation and requirements, and match them against service provider capability for an ideal fit.
3 Copyright © 2013, Everest Global, Inc. EGR-2013-1-E-0988
Procurement pyramid (non-core spend)
Everest Group distinguishes between Source-to-Contract (S2C) and Procure-to-Pay (P2P) processes
S2P strategy
5. Day-to-day purchasing
7. Accounts payable
6. Performance management
8. Procurement systems
1. Spend data mgmt. 2. Strategic sourcing
3. Vendor management
4. Demand management
Strategy
Judgment-intensive
Transaction-intensive
Everest Group’s analyses include multi-process PO contracts with a minimum of three procurement processes, over US$1 million in Annualized Contract Value (ACV), and a minimum contract term of three years. Typically, managed spend is greater than US$50 million
Everest Group’s analyses include all multi-process PO contracts signed as of 2012
4 Copyright © 2013, Everest Global, Inc. EGR-2013-1-E-0988
Major Contenders
Emerging Players
Leaders
Everest Group PEAK Matrix – 2013 PO market standing Performance | Experience | Ability | Knowledge
HCM Works DSSI
Optimum Procurement HCL
WNS
Aegis
HP
TCS Capgemini
Wipro
Genpact
Corbus Xerox
Aquanima Proxima
Xchanging Procurian
GEP
Infosys
IBM
1 Service providers scored using Everest Group’s proprietary scoring methodology given on page 14 Note: For a detailed service provider profile, refer to PO Service Provider Profile Compendium 2013, to be released in November 2013 Source: Everest Group (2013)
Everest Group Performance | Experience | Ability | Knowledge (PEAK) Matrix for PO
Mar
ket s
ucce
ss
PO delivery capability1
(Scale, scope, technology, delivery footprint, and buyer satisfaction)
25th
per
cent
ile
High
Low 25th percentile
75th percentile
Low High
75th
per
cent
ile
Leaders Major Contenders Emerging Players Star Performers
Accenture
5 Copyright © 2013, Everest Global, Inc. EGR-2013-1-E-0988
Infosys is a PO Star Performer based on strong forward and upward movement over time on the Everest Group PEAK Matrix Change in Infosys’ position on Everest Group PEAK Matrix for PO
Market success in 2012 Posted over 80% growth in PO revenue (ACV)
in 2012 Top quartile performance in deals signed in
2012. Signed six new contracts and renewed/extended six contracts worth around US$70 million in total value
Publically announced wins in 2012 include an American multi-national consumer goods company, a leading Australian bank, and a UK pharmaceutical major
Mar
ket s
ucce
ss
PO delivery capability
Major Contenders
Leaders
Capability enhancements in 2012 Acquired Portland Group, an Australia-based leading provider of strategic
sourcing and category management services Partnered with Fieldglass & Rapid Ratings to provide clients vendor
assessment and management-related reports Partnered with QP Group & GIS to increase its category management
expertise Partnered with Ariba, Combi-Net, and Iasta for e-sourcing platform Developed its proprietary tail-spend consolidator solution Added a delivery center in Costa Rica in 2012
Infosys
2013 2012
6 Copyright © 2013, Everest Global, Inc. EGR-2013-1-E-0988
Key PO-related developments (2011-2012) 2012: Infosys partnered with Fieldglass & Rapid Ratings to provide clients vendor
assessment and management related reports 2012: Partnered with QP group and GIS to increase its category management
expertise 2012: Partnered with Ariba, Combi-Net, and Iasta for e-sourcing platform 2012: Developed its proprietary tail-spend consolidator solution 2011: Acquired Portland Group, an Australia-based leading provider of strategic
sourcing and category management services 2011: Extended the sourcing and procurement academy to Poland, China,
Mexico, Brazil, and Philippines 2011: Launched Infosys’ platform leveraging Ariba technology deployment 2011: Developed a supplier risk-management platform 2011: Established a center of excellence for sourcing in Europe
Infosys (page 1 of 5) PO service capabilities
Key PO leaders Binny Mathews, Strategic Business Practice Head, Sourcing & Procurement Rajiv Gupta, Practice Engagement Manager, Sourcing & Procurement
(Americas) Kris Koneru, Senior Practice Engagement Manager, Sourcing & Procurement
(Europe) Gavin Solsky, CEO, Portland Group (APAC)
PO service suite Strategic sourcing: Spend and demand analysis, should-cost modelling,
benchmarking, opportunity assessment & sourcing wave plan, category management & sourcing strategy, RFx management: Evaluation, selection, negotiation, & award, contract management, vendor performance management, savings validation, price check discrepancy, and tail-end spend management
Transactional procurement: Requisition review, spot/tactical sourcing, PR-PO processing, PO acknowledgement & vendor expediting, PO change management, and catalog management
Analytics: Spend analytics, master-data management, telecom expense management, contract compliance, CPO dashboard (performance management), and software asset management
Compliance management: Contract compliance, service provider scorecard, and invoice audits
e-Procurement: Solutions for e-sourcing, e-Procurement, ERP implementation, and technology selection & hosting
Spend managed for external clients More than US$30 billion
Category expertise Infosys manages all indirect-spend categories for a typical enterprise utilizing Global Commodity Councils (GCCs). It also manages MRO & other consumables and low-dollar direct spend categories end-to-end for some of its clients
Sourcing Procure-to-Pay (P2P)
>500 FTEs 100-500 FTEs <100 FTEs
Scale of operations Number of PO FTEs over time
1,050+ 1,150+
1,600+
2010 2011 2012
Source: Everest Group (2013)
7 Copyright © 2013, Everest Global, Inc. EGR-2013-1-E-0988
Major PO clients A global oil & gas major, a large broadband & telecom company based out of the United States, a global mining giant, a leading mining equipment manufacturer, a global electronics major, an American multi-national consumer goods company, a leading UK pharma major, a leading American financial institution, a leading American marketer and distributor of food services
Time of signing Client Contract details
May 2012 An American multi-national consumer goods company Not Available (N/A)
June 2012 A leading Australian bank N/A
June 2012 A German multi-national engineering & electronics conglomerate N/A
June 2012 A leading UK pharma major N/A
Note: Based on contractual information as of 2012 Source: Everest Group (2013)
PO revenue industry mix (2012)
PO revenue buyer size mix (2012)
PO revenue geography mix (2012)
90-100%
~10%
35-40%
30-40%
~10%
~10%
30-35%
20-25% 10-15%
~10%
~10%
~10% Financial services
Large buyers
Mid-market (<5%)
North America
Asia Pacific
Europe
Energy & utilities
Hi-tech & telecom
SMB
UK
Latin America (~5%)
Manufacturing
Others
CPG & retail
Recently announced PO engagements
Infosys (page 2 of 5) PO client portfolio
8 Copyright © 2013, Everest Global, Inc. EGR-2013-1-E-0988
Infosys (page 3 of 5) PO delivery locations
Source: Everest Group (2013)
Lodz
Hangzhou
Bangalore Chennai
Gurgaon Pune Mexico
Belo Horizonte
Manila
Czech Republic
UK
U.S.
Australia
Dubai
South Africa
New Zealand
Costa Rica
9 Copyright © 2013, Everest Global, Inc. EGR-2013-1-E-0988
Infosys (page 4 of 5) PO technology solutions
Infosys Source-to-Pay platform
Solution description
Addresses the entire Source-to-Pay process with an integrated approach Managed-services model; delivery by sourcing and procurement specialists Facilitates technology-led process transformation End-to-end responsibility for technology, process, and BPO Focuses on large and SMB buyers
Process scope
Entire Source-to-Pay process, which includes sourcing, spend analysis, contract management, purchase-order execution, service provider management, and accounts payable
Technology leveraged
Source-to-Pay platform is powered by SAP technology Co-developed S2P platform with enabling ecosystem with a major PO client Bundles Infosys’ proprietary technology solutions such as IMAP and OEMS
Delivery model & pricing
Multi-tenant model Shared ecosystem for infrastructure, application, and specialized services CAPEX-to-OPEX cost structure Outcome-based (based on spend) pricing model
10 Copyright © 2013, Everest Global, Inc. EGR-2013-1-E-0988
Infosys (page 5 of 5) Everest Group assessment
1 Based on contractual and operational information as of 2012 2 Buyer satisfaction score adversely impacted for those service providers who provided inadequate number of buyer references
Source: Everest Group (2013)
2010 2011 2012
Delivery capability assessment1
Assessment dimension Rating Remarks
Scale Over 1,600 dedicated PO FTEs; manages nearly US$30 billion of spend; more than 20 active PO clients
Scope
Strong end-to-end S2P capabilities with the acquisition of Portland Group; serves clients across all industries, categories and geographies
Technology capability
Robust technology capabilities across sourcing and P2P areas. Offers platform-based solutions
Delivery footprint
Global delivery footprint with centers across Europe, United States, India, China, Australia, LATAM, and MEA
Buyer satisfaction2
Strong satisfaction in implementation and relationship management; however, low satisfaction in goal realization
Overall Market success assessment
Global multi-process PO market share over time1 Percentage share by ACV
Number of contracts
ACV TCV
<5% <5% 5-10%
Global multi-process PO market share1
Percentage
MS <5%
<5%
Overall remarks: Infosys is a new entrant to the Leaders quadrant on the 2013 PO PEAK Matrix. It
is also a Star Performer this year Recent acquisition of Australia-based Portland Group has enabled Infosys in
transitioning from a P2P-focused to an end-to-end S2P provider. Additionally, it also expands its presence in Australia
Infosys leverages its IT heritage (such as investments in the S2P platform-based BPO) and deep experience in F&A service to deliver PO services
However, Infosys typically has demonstrated limited flexibility in risk taking or exploring innovative pricing models due to an extreme focus on margins
<5% <5%
Infosys is a Leader on the Everest Group PEAK Matrix for PO
Major Contenders
Emerging Players
Leaders
Infosys
Mar
ket s
ucce
ss
PO delivery capability1
(Scale, scope, technology, delivery footprint, and buyer satisfaction)
25th
per
cent
ile
High
Low 25th percentile
75th percentile
Low High
75th
per
cent
ile
High Medium-high Low Medium
11 Copyright © 2013, Everest Global, Inc. EGR-2013-1-E-0988
Appendix
12 Copyright © 2013, Everest Global, Inc. EGR-2013-1-E-0988
The Source-to-Pay (S2P) process spans the entire procurement function
Procurement pyramid (non-core spend)
S2P strategy
5. Day-to-day purchasing
7. Accounts payable
6. Performance management
8. Procurement systems
1. Spend data mgmt. 2. Strategic sourcing
3. Vendor management
4. Demand management
Strategy (done in-house) Mission/corporate strategy Business strategy Geographic strategy Technology strategy
Strategy
Judgment-intensive
Transaction-intensive
Strategic sourcing Sourcing strategy Vendor selection Contracting Sourcing implementation Category management
Spend data management Baseline analysis Data “cube” construct Opportunities definition
Day-to-day purchasing Approval workflow Material requisition Purchase order Expediting/
troubleshooting Material/invoice receipt Invoice payment
1
2
5
Vendor management Vendor relationship
management Contract administration Service level/standards
monitoring
3
Demand management Specifications/standards Transformation/change
management Process and systems
implementation
4
Procurement systems E-auctions Catalog management Solution hosting
8 Performance management Financial performance Compliance management Policies and procedures Performance and results
reporting
Accounts payable Master data maintenance Process payment request T&E claims processing EDI/P-card administration Month-end closing Vendor inquiries Reporting
6 7
13 Copyright © 2013, Everest Global, Inc. EGR-2013-1-E-0988
Top quartile performance across market success and capability
2nd or 3rd quartile performance across market success and capability
4th quartile performance across market success and capability
High
Low
25th
per
cent
ile
75th
per
cent
ile
75th percentile
Mar
ket s
ucce
ss
Everest Group Performance | Experience | Ability | Knowledge (PEAK) Matrix
Emerging Players
Leaders
Major Contenders
Delivery capability
Low High 25th percentile
Everest Group Performance | Experience | Ability | Knowledge (PEAK) Matrix classifies service providers into Leaders, Major Contenders, and Emerging Players
14 Copyright © 2013, Everest Global, Inc. EGR-2013-1-E-0988
Service providers are positioned on the PEAK Matrix based on evaluation across two key dimensions
Measures the scope of services provided across segments, processes, industries, geographies, etc.
Measures the capability and investment in tools and technologies that help deliver better services
Measures the delivery footprint across regions and the global sourcing mix
Measures success achieved in the market. Captured
through active ACV as of December 2012
Measures ability to deliver services successfully. Captured through five subdimensions
Measures the scale of operations (revenue, number of FTEs, etc.)
Scale Scope Technology Delivery footprint
Emerging Players
Leaders
Major Contenders
Mar
ket S
ucce
ss
Delivery capability
1 Measured through responses from two/three referenced buyers for each service provider Source: Everest Group (2013)
Measures the satisfaction levels1 of buyers across: Goal realization Process delivery Implementation Relationship
management
Buyer satisfaction
15 Copyright © 2013, Everest Global, Inc. EGR-2013-1-E-0988
Market Star Performers
Year 1
Year 0
Service provider
Mar
ket s
ucce
ss
Capability
Methodology Everest Group selects Market Star Performers based on the relative year-on-year movement of each service provider, on the PEAK Matrix
In order to assess advancements on market success, we evaluate the performance of each of the service providers on PEAK Matrix across a number of parameters including: Yearly ACV growth Number of new contract signings Number of contract extensions Value of new contract signings
In order to assess advancements on capability, we evaluate the performance of each service provider on PEAK Matrix across a number of parameters including: Annual growth in scale Increase in scope of services Expansion of delivery footprint Technology/domain specific
investments
The top-quartile performers on each of the identified parameters are identified and the “Star Performer” rating is awarded to the service providers with: The maximum number of top-quartile
performances across all of the above parameters
AND At least one area of top-quartile
performance in both market success and capability advancement
The “Star Performers” designation relates to year-on-year performance for a given service provider and does not reflect the overall market leadership positions. Those identified as the Star Performers may include “Leaders”, “Major Contenders”, or “Emerging Players”
Additionally, Everest Group designates the “Star Performers” title to providers that demonstrate the strongest forward movement over time on the PEAK Matrix
16 Copyright © 2013, Everest Global, Inc. EGR-2013-1-E-0988
FAQs (page 1 of 2)
Does the PEAK Matrix assessment incorporate any subjective criteria? Everest Group’s PEAK Matrix assessment adopts an objective and fact-based approach (leveraging service
provider RFIs and Everest Group’s proprietary databases containing providers’ deals and operational capability information). In addition, these results are validated / fine-tuned based on our market experience, buyer interaction, and provider briefings
Is being a “Major Contender” or “Emerging Player” on the PEAK Matrix, an unfavorable outcome? No. PEAK Matrix highlights and positions only the best-in-class service providers in a particular functional/vertical
services area. There are a number of providers from the broader universe that are assessed and do not make it to the PEAK Matrix at all. Therefore, being represented on the PEAK Matrix is itself a favorable recognition
What other aspects of PEAK Matrix assessment are relevant to buyers and providers besides the “PEAK Matrix position”? PEAK Matrix position is only one aspect of Everest Group’s overall assessment. In addition to assigning a “Leader”,
“Major Contender” or “Emerging Player” title, Everest Group highlights the distinctive capabilities and unique attributes of all the PEAK Matrix providers assessed in its report. The detailed metric level assessment and associated commentary is helpful for buyers in selecting particular providers for their specific requirements. It also helps providers showcase their strengths in specific areas
What are the incentives for buyers and providers to participate/provide input to PEAK Matrix research? Participation incentives for buyers include a summary of key findings from the PEAK Matrix assessment Participation incentives for providers include adequate representation and recognition of their capabilities/success in
the market place, and a copy of their own “profile” that is published by Everest Group as part of the “compendium of PEAK Matrix providers” profiles
17 Copyright © 2013, Everest Global, Inc. EGR-2013-1-E-0988
FAQs (page 2 of 2)
What is the process for a service provider to leverage their PEAK Matrix positioning status ? Providers can use their PEAK positioning rating in multiple ways including:
– Issue a press release declaring their positioning/rating – Customized PEAK profile for circulation (with clients, prospects, etc.) – Quotes from Everest Group analysts could be disseminated to the media – Leverage PEAK branding across communications (e-mail signatures, marketing brochures, credential packs,
client presentations, etc.) The provider must obtain the requisite licensing and distribution rights for the above activities through an
agreement with the designated POC at Everest Group
Blogs www.sherpasinblueshirts.com www.gainingaltitudeinthecloud.com
Twitter @EverestGroup @Everest_Cloud
Stay connected
Websites www.everestgrp.com research.everestgrp.com
Dallas (Headquarters) [email protected] +1-214-451-3000 New York [email protected] +1-646-805-4000 Toronto [email protected] +1-647-557-3475 London [email protected] +44-207-129-1318 Delhi [email protected] +91-124-284-1000
At a glance With a fact-based approach driving outcomes, Everest Group counsels
organizations with complex challenges related to the use and delivery of the next generation of global services
Through its practical consulting, original research, and industry resource services, Everest Group helps clients maximize value from delivery strategies, talent and sourcing models, technologies, and management approaches
Established in 1991, Everest Group serves users of global services, providers of services, country organizations, and private equity firms in six continents across all industry categories