kpo ppt
TRANSCRIPT
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Gearing for KPO
Some issues related to
Transition, Delivery &
Commercials
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Stabilization2005-2010
Consolidation(2002-2004)
Evolution of Knowledge Services in India
• 1996 - McKinsey conceives, builds and manages its Knowledge Center
• 1997 - GE Capital Services establishes its back office operations
Growth(1999-2001)
Inception(1996-1998)
• 1993 - iGate Global Solutions (formerly Mascot systems) establishes its offshore center in Banglore
• 1998 – Some Captives (such as Frost & Sullivan and Gartner) and third party players (such as Capital IQ) establish their operations
• 1999 – Amex Opens its back office operation
• 2000 – Third Party market competition increases with Mphasis, FreshMind and Office Tiger opening their operations
• 2001 –Evalueserve, Irevna and Netscribes enter as Third Party providers
• 2002 – ABN Amro and AT Kearney establishes their back office operations
• Start of knowledge services
• Captive players enter the Indian market
• Large captive players enter the market
• Third Party players start cropping up
• Competition among Third Party players heat-up
• Market consolidation• Collaborations between Third Party
player
• 2003 –Morgan Stanley and Prudential establishes their back office operations
• 2004 – ICRA and Bytes to Knowledge (B2K) collaborate to form Brickwork to offer financial services
• 2004 – Crisil acquires Irevena
• 2004 – S&P and McGraw Hills acquires Capital IQ
• Captive Players to increase foothold in the Knowledge Services market.
• Market Share of Captive Players expected to increase to 68% in the year 2010 from the current 62%
• Industry will comprise few large third party players along with the captives.
• Very few boutique firms likely to exist on a standalone basis
• Information Management and Analytics to fuel the market growth in the short run.
• Independent research for investment banks and large businesses to show traction going ahead
Characteristics:
Examples:
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The spectrum of Knowledge Services
Business Research
Economics Research Company and Industry Research Documentation & Library Services
Investment Research Corporate Finance Financial Modeling and Analysis Investment Banking Support
Market Research Data Acquisition and Data Entry Data Processing Presentations
Information Management Database Creation Quantitative/Financial Statement Analysis Data/Information Synthesis
Legal Research Legal, Para-Legal Content and
Services Drafting, Review of Documents and
Contracts Legal Research (Case History)
Sourcing Management Spend Data Analysis & Supplier intelligence Low cost country sourcing Advisory Services
Intellectual Property Research Patent Drafting and Filing, Patentability Assessment Overlap Analysis, Competitor IP Landscaping IP Portfolio Management, IP Licensing & Commercialization
Analytic Services Data Warehousing Data Preparation, ETL services MIS & Reporting Business Intelligence Statistical and econometric
Modeling Optimization modeling and OR
solutions
Technology Research IT Services Application development and maintenance Security Internet & E- commerce
Knowledge Services
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100
April 2004 May-05
300% Growth
Knowledge Services Employee Growth in WNS
400
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Comprehensive industry-focused business units
Mortgage Processing
&Real Estate
New Segments
Knowledge Services
HealthClaims
InsuranceServices
TravelServices
Manufacturing, Distribution
& Retail
Reservation services
Customer service
Revenue accounting
Refunds and travel accounting
Fare estimation
Cargo & baggage management
Yield management
Underwriting
Policy administration
Claims management and collections
Accident & repair management services
Claims data validation
Pre-adjudication investigations
Adjudication
Repricing
Policy administration
Billing & receivables management
Business research & analytics
Market research
Data mining & analytics
Investment research
Shared Services(Finance & Accounting, Human Resources)
Contact Center(Phone, Web, Email, Correspondence)
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KPO: Process evolution…two specific examples….
Survey Design
Survey Administration
Data Preparation
Data Processing
Analysis & Presentation
1
2
3
4
5
Market Research Processes Analytics Processes
Data Warehousing
Data processing
Business Intelligence
Analytical Intelligence
Statistical modelling/ORmodelling
1
2
3
4
5
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AnalyticServices
27.5%
Market Research
11.5%
Business Research
9.2%
Legal Research
5.6%
Business Consulting
5.5%Information
Management33.2%
Investment Resarch
4.5%
Intellectual Property
2.2%
Sourcing Management
0.8%
Source : Nasscom, press reports and WNS Analysis
Current Market Share Of Key Knowledge Service Verticals by FTEs
Total: 12,000
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Key emerging issues for KPO (vis-à-vis BPO)
Contracts How to define SLA’s for KPO process Duration of contracts?
Pricing
How to sustain the value proposition to the client?
Maintaining healthy P&L
Governance Structures Onshore offshore mix Unbundling of roles: Sales/Program
Management/Operations
Service Delivery How should operations be
organized for better financials and delivery conforming to client expectations?
Selling & Transition
Best practices for transition? Strategies for growth of KPO accounts?
Quality & Risk Management Business Continuity Information security & compliance Inventorize information assets
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Selling & Transitioning
Synchronizing Sales and Operations
– Selling realistic scope of work
– Negotiating right SLA’s
– Selling skills at the right price
– Selling the program evolution in conformity with the delivery constraints
Transitioning of Knowledge process is job of specialist
– Choose the right specialist for diagnostics, process mapping and program management
Consulting approach required
– Focus on solution design instead of adoption of processes “as is”
– Beware of delivery constraints (Ramp up times etc)
– Program evolution to be aligned to delivery constraintsStructured approach to sales and program management is necessary and so is seamless interaction between operations team with Sales and PM team
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Commercials Strong P&L’s at the program level is particularly necessary for high end processes.
– Both current as well prospective profitability is important
– Higher Seat Utilization is not always possible in KPO because of adhoc nature of work
– Watch out how you begin!!
Technologies are getting intelligent: redundancy of existing Knowledge processes
Beware of hidden costs in KPO: there are many!
Pricing approach (whether FTE or UTP or hybrid or time based or deliverable) depends on firm specific factors, process specific factors and program specific factors
– Innovation and flexibility necessary
– Should be a derivative of business model
`
Transitioning
InitiatingOffshoring
Management costs
Re-engineering tasks
•Diagnostics•Pilots projects•Cost of subcontracting
•Process mapping•Documentation•Knowledge transfer and training
•Improving processes•Automation•Re-allocation of infrastructure costs
•Time sheets•People management•Invoicing
Be scientific about pricing to the extent possible and to the extent possible be transparent with client on costs included
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Contracts
Difficulties in defining SLAs
– KPO Programs begin with mostly ad hoc or customized projects (sometimes as “ proof of concept”)
– Shorter contracts (?)
– Standard times difficult to define. TAT could vary between 1 day to 20-30 days for complex projects
– Regular reporting work to ad hoc project work may be 20:80
– No pre-defined process for creating deliverable
Customization of contracts: Do not depend on “master” template.
– E.g. analytics processes are different from Market Research processes
– Continuum of complexity
Let the business model define the contract
– Need to contemplate on the governance structures before signing the contract
Distinguish between transition phase and stability phase
– Define stability phase & criteria for different set of projects
Update the Scope of Work consistent with service delivery.
– Updation frequency will be greater than the normal BPO.
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Service delivery
Emphasize consulting delivery model at the strategic level
– Focus on solution design
– Invest in developing newer knowledge products (Supply creates the demand!)
• Partnerships with specialized vendors may be necessary
• Solution design Centers/Centers of Excellence
• Learning academies
• Tie ups with academic institutions will become necessary
Right Recruitment is the key
– Knowing the DNA of skills sets is must
24 x 7 operation in KPO processes is not always desirable
– Single country multiple location service operations to multi-country can help
achieve this.
– Multi-Country operations & Global delivery model also paves way for stronger
BCP.
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Where to draw the line?
Thank you