making the shift – moving from transactional service

12
1 Confidential. All trademarks appearing herein belong to their respective owners. Making the shift – Moving from transactional service provider to end-to-end process transformation Harpreet Duggal Senior Vice President, Genpact NASSCOM BPO Strategy Summit 10 June, 2009 – Bangalore, India

Upload: fabio-aguiar

Post on 22-Jun-2015

562 views

Category:

Documents


0 download

TRANSCRIPT

Page 1: Making the shift – Moving from transactional service

1Confidential. All trademarks appearing herein belong to their respective owners.

Making the shift – Moving from transactional service provider to end-to-end process transformation

Harpreet DuggalSenior Vice President, Genpact

NASSCOM BPO Strategy Summit10 June, 2009 – Bangalore, India

Page 2: Making the shift – Moving from transactional service

2Confidential. All trademarks appearing herein belong to their respective owners.

The Natural Evolution of Globalization - The Move Towards Value-Added Services

Labor Arbitrage

Productivity

Capacity

Competitiveness

u 25-50% cost savings u Leverage global talent pool

u Turn fixed costs into variable to support expansion & growthu Onshore capital expenditure avoidance

u Benefit from Six Sigma and Lean expertise u Margin expansion

u Enable companies to become better at Core to grow top lineu Preservation of cash & improved working capitalu Take Processes to Best-in-classu Minimize capital investment

All of us Want to Travel to Best-in-Class

1990s

Early 2000s

Mid2000s

Today

Page 3: Making the shift – Moving from transactional service

3Confidential. All trademarks appearing herein belong to their respective owners.

Corporations Are Facing A New Competitiveness

u Escalating pressures on enterprises…§ global competition§ demand for innovation§ speed to market§ productivity pressures§ risk mitigation & compliance§ shareholder scrutiny

u are leading to a shift in corporate strategy§ focus on core§ global sourcing§ variable cost models§ minimize capital investment§ improve productivity

u There are fundamental shifts in the corporate landscape…

Demanding a new breed of

Business Partner

Page 4: Making the shift – Moving from transactional service

4Confidential. All trademarks appearing herein belong to their respective owners.

Globalization is About More than Cost Reduction .. but Getting Full Value is Easier Said than Done

§ Narrow focus on short term cost takeout & contracted SLAs

§ Not getting into full partnership mode early

§ Reluctance to change/re-design processes significantly-Perception of “unique processes”, “we are the best” and “operational disruption”

§ Clients’ saving commitment to street and budget limitations delay the right level of upfront investments required

The Full potential: Road-blocks:

Page 5: Making the shift – Moving from transactional service

5Confidential. All trademarks appearing herein belong to their respective owners.

u Deep expertise in specific industries – Banking, Insurance, Automotive, Healthcare ….

u Deep Expertise by Domain – F&A, Supply Chain, Collections, Risk Management ….

u Define what is the standard for Best in Class, by industry and by Domain… and deliver those to customers.

u Research & Development into Optimum processes and enabling technologies– e.g. invoice exchange, translation, task

dis-aggregation, core vs. non-core

1. Process Expertise / Best In Class Services

Need to Demonstrate True Process Expertise & Domain Knowledge to Create Value

Domestic Outsourcing...not about Cost Arbitrage

Page 6: Making the shift – Moving from transactional service

6Confidential. All trademarks appearing herein belong to their respective owners.

2. Delivering Business Solutions – Moving from Transactions to Solutions

u Bundling of Services

u Delivering specific value

u Linkages between Services & Technology

u Delivering Cost & Productivity

u Delivering Total Services

− Procure to pay (sourcing + AP + cash management)

− Sales Force Effectiveness− Risk Management− Working Capital Improvement− Credit Card Operations

− Sales Force.com? − SOX.com?− Hospitals.com?

− Well beyond labor arbitrage… through process improvements, re-engineering

− Pricing based on results

− Complete back office “to support expansion”− Tax, Infrastructure, Accounting, Admin

Domestic Outsourcing...not about Cost Arbitrage

Integrated Process & Technology Solutions

Page 7: Making the shift – Moving from transactional service

7Confidential. All trademarks appearing herein belong to their respective owners.

3. Unleashing Disruptive Virtual Companies

u Utilize Intellectual Talent & Virtual Expertise to dramatically shift costs and compete in existing businesses.

u Ideally focused on service industries/ knowledge based

u Utilize the power of the internet & telecommunications− Virtual Investment Bank?− Virtual Market Research?− Virtual Insurance Co?− Virtual Bank?− Virtual Architect, Law Firm, Advertising?

u Huge Potential – current Services work is helping build up the Domain Knowledge to compete

Focus On Core Competencies… Revolutionize Biz ModelsIndia More Likely To Adopt Disruptive Models

Domestic Outsourcing...not about Cost Arbitrage

Page 8: Making the shift – Moving from transactional service

8Confidential. All trademarks appearing herein belong to their respective owners.

Driving Performance on Business Outcomes requires an End to End Process View

End to End allows a Process view that can transcend the functional silos in an organization

Benchmarks at sub processes level allow detailed characterization of potential for improvement in each step... and its subsequent impact at a business Level

End-to-end approach can enable companies drive step improvement in process performance through focused and flawless execution

Significant process variability across companies drives large variances in similar processes

Page 9: Making the shift – Moving from transactional service

9Confidential. All trademarks appearing herein belong to their respective owners.

u 60/70% of common processes

across industries are similar

u Measuring Process Efficiency

alone misses the real benefits

u Driving real improvements

requires Process Expertise +

Technology + Analytics + Insight

u Clients will require different levels

of interface at different times

Key Elements of End to End

Some Obvious Questions – Need An Expert To Answer Them

u Build a common framework for

comparison

u Measurements focused on

Effectiveness and Efficiency

u Huge potential impact of

combining skills, solves real

business issues

u Implement in Modules, no “Big

Bang” required

Key Hypothesis Key Elements

Page 10: Making the shift – Moving from transactional service

10Confidential. All trademarks appearing herein belong to their respective owners.

End-to-End Process

Efficiency Effectiveness

Originations § Time to key in an invoice§ Cost per loan application

§Conversion rates on applications… ? Volumes§Cycle time to open a new customer account

Bill to Cash § Collection efficiency % (Cash collected / Total AR)

§ Past due %

§Eliminate billing leakage§Days Sales Outstanding

Account Payable

§ Invoices actioned on time§ Total AP cycle time

§Paid on Time %§Vendor queries§#Vendor discounts

Key Business Outcome Improvement Drivers

u Insights – Technology only solves part of the problem:

§ E.g., only 40% of transactions in the Accounts Payable process are “first pass, straight through”

§ Typically only 5-10% of the end-to-end cycle time of a process is “value-added time”

u The E2E approach also leads to higher employee engagement

u Will facilitate the move from FTE-based pricing to outcome-based pricing models

Page 11: Making the shift – Moving from transactional service

11Confidential. All trademarks appearing herein belong to their respective owners.

Our Learnings from work with multiple customers/processes

u No one customer is Best-in-Class across metrics… pockets of brilliance

u As wide a variation within a company as across companies

u Granular, practical insight is the key to continuous improvement

u Technology is just one potential lever… process expertise, analytics and ability to drive behavior are often bigger levers

u Unique roadmaps are required for each client based on their view on priorities, risk, investment and appetite for change

Unlock 2X – 3X value, in addition to the traditional 30-40% process efficiency

Page 12: Making the shift – Moving from transactional service

12Confidential. All trademarks appearing herein belong to their respective owners.

Contact Information

Harpreet Duggal – Senior Vice President & Business [email protected]

www.genpact.com

Thank You

Confidential. All trademarks appearing herein belong to their respective owners.