future of outsourcing rise of integrated & specialised service provider

Connecting The Dots

The Rise Of Specialized & Integrated Service Provider

InterGlobe Technologies

© InterGlobe Technologies Pvt. Ltd. 2011. Confidential: Not for Distribution. www.igt.in 2

Today, companies are looking ahead, determining how to do more with less... seize opportunities... and gain competitive advantage


More and more decision makers are turning to outsourcing — to help them improving efficiencies, driving value and

optimizing cost

Innovation (R&D, Product Development)

Finance & Accounting

Service Devliery

LogisticsHR ServicesSales and Markering / Distribution

ProcurementCall CentresInformation Technology

Services

32%

24%

53%51%

35%33%

30%

25%

57%

15%

20%

44%

50%

16%

27%

41%41%39%

Outsourcing this item Outsource it to a significant extent


Today’s Best-of-Breed Airline Outsourcing Engagements

-Airlines outsource its operations to multiple vendors

Benefit

- Increased Specialization-Localized Decision Making

Airline

Multiple Outsourcing Vendors

Check-in

Baggage

TechnologyReservation

Ground Handling

AdminSales

In-flightCatering


Challenges Involved In Outsourcing to Multiple Vendors

• Managing multiple vendors is time-consuming, complex and expensive• Need dedicate staff to oversee each vendor relationship and establish regular reviews of

vendor performance

• Can’t find informationDiscovery

• Can’t combine informationIntegration

• Can’t extract value from informationInsight

• Can’t consume informationDissemination


Savvy market watchers believethat the outsourcing market will continue to

evolvetoward domain specialization and bundling of

outsourced activities


Airlines need to work with industry specialists who understand their unique challenges, who can see

the world as they do and who can helpset them apart in the industry


Creating A Pool Of Specialized Outsourcers

Airline

Check-in

Baggage

TechnologyReservation

Ground Handling

AdminSales

In-flightCatering

The portfolio of service providers working with an airline is often complex and creates considerable challenges to manage and optimize. Consequently airlines should look towards rationalizing the number and quality of service providers to attain financial benefits coupled

with a less complex sourcing organization.


Aligning Synergies Of Outsourcers

Airline

Check-in

Baggage

Technology

Reservation

Ground HandlingAdminSales

In-flightCatering

The partnered approach calls for two or more specialized and skilled service operators with different roles and responsibilities to work together to deliver the desired array of services.While they are individually accountable to the airline through their respective SLAs, they are

also accountable to one another.


Future of Airline Outsourcing Engagements

Airline

Partnered Outsourcing Providers• Check-in• Baggage• Technology• In-flight catering• Sales & Marketing• Reservation• Admin…


Best Practices For Selecting The Right Partner

• Seek specialized providers that focus on what they do well• Seek alliance-friendly organizations that partner for the rest• Seek innovative solutions tailored to each of your need

Seek a service provider they can trust to provide a direct and immediate response to their business challenges


Cost Benefits of Partnered Outsourcing

Organizations can achieve financial benefits of more than 15% by utilizing integrated and specialized vendors

TCO* - multi-supplier portfolio

.

Onetime Recurring TCO* - Integrated service provider ( airline’s savings only)

TCO* - Integrated service provider (specialized service provider’s savings)

100% 1-1.5%3-3.5% 95-96% 1-2%

15-17%81-84%

Onetime Recurring Overall

4-5% savings driven by reduced internal buyer costs in setting up and managing service provider relationships

17-19% savings from reduced supplier fees driven by leveraging synergies & multi shore relationships


Benefits of Partnered Outsourcing

-Reduced redundancies and costs- Operating multiple processes from a single platform can reduce costs for

development, maintenance and licensing

-Better competitive positioning- Partnered outsourcing creates measurable competitive advantage by leveraging the

synergies among related business processes

-Standardized operations- Customer benefit from the consistent approach to business processes, methods and

terminology that bundled outsourcing provides

-Lower risks and improved operational efficiencies- A single bundled outsourcing provider can take responsibility for integrating the

interfaces and touch points across processes, reducing risk and increasing performance synergies

-Simpler governance processes- Creating a relationship with one service provider is much more cost efficient than

managing across many different providers


Managing Integrated Service Provider Relationships

Traditional Approach Suggested Approach

• Focus on cost • Focus on mutual business outcomes

• ‘Vendor’ status • ‘Trusted business partner’ status

• Measurement via standard SLAs • Balanced scorecard approach

• Multiple vendor interfaces • Single point accountability


InterGlobe Enterprises

InterGlobe is a leading conglomerate spanning travel, aviation and hospitality sectors with revenues ~USD 1.5 billion and a network of

over 8,500 professionals with 61 offices across 44 cities globally

InterGlobe Technologies Integrated BPO and travel IT solutions provider for global clients

InterGlobe Technology QuotientDistributor for Galileo and Worldspan GDSs in India and Srilanka

InterGlobeAir TransportLargest airline management company in India

InterGlobe Aviation ‘IndiGo’India’s Largest & Fastest growing domestic low cost carrier

InterGlobeHotelsJV with Accor to build ‘Ibis’ hotels and to manage Accor brands in S. Asia

InterGlobeGeneral Aviation Exclusive partnerships with Hawker Beechcraft, Sikorsky Helicopters & Dornier Sea Planes

Travel, Technology and General Aviation Services HotelsAviation


Our Airline Industry Footprint

• Customer LoyaltyManagement

• Marketing Operations

• Reservations and ticketing

• Contract and commission management

• CSAT• Corporate Sales• Call Center

Reservation• Inventory

Management• Distribution

Management• Website Management• Agency Helpdesk• Analytics

• Passenger Management• Check-In Mgt• Passenger

Processing• Baggage Handling• Departure Control • Seats allocation• Concierge Services

• Cargo Management• Sales and Order

Management• Transportation

planning• Terminal Operations• Documentation

• Ground handling• In-flight catering

services• Crew Management• RAMP• Systems / Operations

Mgt• Gates boarding

• Accounting• Contract

Management• Customer Relations• Data Center

Operations• Procurement

Management• Pricing / Revenue

Management• Resource

Management• Legal and Compliance

Management• Taxation• Planning &

Scheduling• AP&AR• Audit Services• General Ledger• Payroll• HR• Admin

• Fare Loading• Ticketing• Yield Management• Queue Management• Fraud Management• Customer Service• BSP/ARC

Reconciliation• Proration• Revenue Accounting• Sales Audit• Refunds

Market & Sell Services

Business OperationsFlight

Operations

Enterprise Support

Operations

AirlineOperations

Operations / Technology / Business Process Outsourcing


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future of outsourcing rise of integrated & specialised service provider

Business

multiple vendors discovery

information insight

information integration

information dissemination

extract value

vendor relationship

decision makers

competitive advantage