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8/6/2019 Offshore BPO Wipro
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Webinar agenda
Keynote address:
Rebecca SchollPrincipal AnalystGartner
(45 minutes)
Poll: 2 minutes
Question & Answer Session: 15 minutes
Introduction & case studies:
Sanjay JoshiVice ChairmanWipro Spectramind
(20 minutes)
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Offshoring BPO : A framework for
getting started
These materials can be reproduced only with Gartners official approval. Such approvals may be requested via e-mail --
Presented by: Rebecca Scholl
Principal AnalystGartner
Date: June 26, 2003
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Agenda
Key trends in offshore BPO
The offshore BPO competitive landscape
How to manage a successful offshore BPO relationship
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Pros and cons of using BPO providers
Cons
They cost too much
They dont understand mycompanys unique processes
We will never be able to re-insource
The quality of service willdecrease over time
Pros
We are forced to do more
with less My competitors are doing it
We can get better servicelevels than we could in-
house We can get access to new
technology withoutincurring capital expenses
We can learn from them
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BPO : Multiple types, multiple approaches
BSP
HR BPO
Offshore BPOProcurement BPO
Payment
processing
F&A BPO
Call center
outsourcing
Claims
processing
Payroll
processing Revenue cycle
management
BTO
Vertical
BPO
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Appeal of offshore
HighMediumLow
Penetration(Percentage of
enterprises currently
involved in these
service offerings
using offshore
resources)
BI
New
app.dev. App.maint. and
mgmt.
Legacy
app.
dev.
App.
migration
BPO
Contact
centers
Infra-
structure
services
EAI
Packaged
apps.
Leverage: (Offshore/onshore resource mix high means more resources offshore)
Low
High
OEM
product
dev.
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Nearshore: Easier travel Cultural similarities Time zone
Offshore:
Lower costs Time to market Resources Quality
Onsite/Offsite
Nearshore:Mexico
Nearshore:
Canada Offshore:Ireland
Offshore:
India
Offshore:
Eastern Europe
Current PrioritiesLonger-Term Prospects
Offshore:
PhilippinesNearshore:Jamaica
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Making the economics work: Leveraging a global delivery model
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Offshore BPO - Still not mainstream
Number of enterprises
using offshore sourcingfor the first time
Type A:Early adopters Type C:Laggards
Largest segmentof enterprise
buyers comprise
this category,
hence there will a
large volume of
activity
Type B:
Pragmatists
Time2002-2003 2004-2005 2006 +
Global delivery oftrueBusiness ProcessOutsourcing
Global delivery(onsite/nearshore/offshore) of
Application related services
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Business processes at work
Telemarketing, Fundraising, etc.
Inquiry handling,customer support
Up sell, Cross sellMarket data analysis EnterpriseServices
Human Capital
Finance and Acct
IT Facilities Mgt
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AR/AP, reconciliation
Policy administration
Claims processing
Technical assistance,helpdesk
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Agenda
Key trends in offshore BPO
The offshore BPO competitive landscape
How to manage a successful offshore BPO relationship
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Offshore BPO provider categories
Type of supplier Supplier name
Offshore contact center specialistsDaksh, 24/7, Transworks, eServe, Vcustomer,
C3, e-Telecare
US consultants and IT services
GECIS, Amex, World BankInternal back-office Centers
Infosys (Progeon), Wipro (Spectramind), HCL
Technologies (e-Serve), Satyam, TCS, Patni
Offshore IT services
ACS, CSC, EDS, Accenture, Exult
Note: Not a definitive list
US contact center specialistsConvergys, Spherion, Stream, Sitel.
TeleTech, ICT Group, Sykes
Vertical and back-office specialistseFunds, EXLService, OPI, Vision HealthSource,
ICICI OneSource, WNS
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Evaluating offshore BPO vendors
Which partner type and company is the best fit for which company?
Branding
Limited US presence Scalability
Industry/process skill
Dedication to BPO model Flexibility
Pure-plays
Lack of back-office expertise Lack of IT integration capabilities
Lack of senior project managers
Existing facilities Operational expertise
Existing reference accounts
Contact center specialists
Lack of reference accounts for BPO
Sales focused on IT department
Project-based focus
IT processing power
BPR and IT integration skills
Presence in the US market
IT service providers
No external market experience
Lack of IT integration capabilities
Lack of cross-industry models
Process expertise
Years of experience
Industry/process skill
Internal back-office centers
WeaknessesCompetitive advantageVendor category
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Country selection criteria for offshore sourcing
0 1 2 3 4 5 6
Relevant skill sets
Cost of Labor
Language skills
Security/Business Continuity
IP Protection
Country Infrastructure
Cultural fit
Proximity to the US
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Company selection criteria for offshore sourcing
0 1 2 3 4 5 6 7
Near-shore presence
Multi-vendor capabilities
Full outsourcing
Certifications
Project management
Quality of resources
Cost
Offshore process/methodology
42 respondents
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Strengths
High quality technical skills
Reference clients - measurable results
English language Business intelligence
Non-disruptive approach to existing processes
India SWOT analysis
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Strengths
High quality technical skills
Reference clients - measurable results
English language Business Intelligence
Non-disruptive approach to existing processes
Weaknesses
Link between IT and business
Change management capabilities
Lack of global footprint UK-centric approach
Underutilized infrastructure
India SWOT analysis
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Strengths
High quality technical skills
Reference clients - measurable results
English language
Business Intelligence Non-disruptive approach to existing processes
Threats
Increase in attrition
Social resistance in client countries
Competition from other English-speaking
locations
Weaknesses
Link between IT and business
Change management capabilities
Lack of global footprint
UK-centric approach
Underutilized infrastructure
India SWOT analysis
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Strengths
High quality technical skills
Reference clients - measurable results
English language
Business Intelligence
Non-disruptive approach to existing processes
Threats
Increase in attrition
Social resistance in client countries
Competition from other English-speaking
locations
Opportunities
Leverage existing infrastructure
Global strategy
Indirect channels
Attract US and European service providers
Develop new HR strategies Focus on communication as a core competency
Weaknesses
Link between IT and business
Change management capabilities
Lack of global footprint
UK-centric approach
Underutilized infrastructure
India SWOT analysis
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Agenda
Key trends in offshore BPO
The offshore BPO competitive landscape
How to manage a successful offshore BPO relationship
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What are our corecompetencies?
What functionsare
strategic?
How agile will mybusiness be?
What are my currentcosts?
Insource vs. outsource decision process
What should bedone internally
vs. outsourced?
What operationsand management
tasks remain?
What are the currentoperations services?
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Internal metrics
Process complexity and multiple custom contracting vehicles;need to evaluate the one or many provider approach
No one provider can offer a single aggregated solution that has
been market tested; complexity in comparing offerings
The typical distributed environment makes it difficult toaccurately define existing baselines; transition issues
BPO buyer challenges: Youre not alone, but you are unique
Vendor selection
Contracting
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Top challenges in offshore sourcing
0 1 2 3 4 5 6
Buy-in from corporate
management
Understanding vendor
differentiators
Negotiating contract
terms
Managing change
requests
Integrating with internal
apps
Managing project
timeline/budget
Managingcommunications
42 respondents
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Key risks in offshore BPO
Immaturity of US and European BPO demand
Low level of confidence on security issues
Business-centric demand vs. technical-centric supply
Complexity of BPO delivery structure
Importance of change management issues
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Workforce related risk - Worker backlash
Employee flight
Loss of top performers
Deal-breaker
Intellectual capital
Malaise and low morale
Cultural breakdown
Negative reputation
Productivity loss
Little motivation
Activism
Negative publicity Sabotage of projects
Network armies
Our employeesare our greatest assets.
I say we sell them.
Source: ahajokes.com
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Balancing the benefits and costs of BPO
Benefits
Economies of Scale
Economies of Scope
Economies of
specialization
Cost
Transaction costs
Information asymmetry
costs
Dependency costs
Knowledge transfer
costs
IP protection
Cost mitigation
Seek proven referenced
Maintain contractual
flexibility
Build sold governance
structure
Encourage smart use of IT
In BPO (BPM, EAI, Web
services
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Create the governance model
Choose the overall governance model:
Choose a partnering or contractor relationship.
Determine the joint organization:
Identify the champions, evangelists, subject matter experts (SMEs),change leaders.
Involve vendor(s) with some of the softer aspects, such as changemanagement.
Identify and select the ESP team members to work with your team.
Feel free to choose these people yourself to give you a comfort level.
Gain support of outsourcing staff they must be enthusiastic. Reconcile your processes and culture with the outsourcing vendors.
Keep vendor employees motivated and stimulated:
Their buy-in is key to your success!
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Every sourcing strategy has limitations and risks. You must recognize,
plan and manage the unique requirements of offshore BPO sourcing.
Differentiate between unique offshore issues and pure outsourcing
ones.
Build meaningful plans for communication and clearly define options for
employees affected by outsourcing
Recommendations
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Case study: Technical support services- leading global PC manufacturer
Client
situation Impact The clients basicneed was to improveservice levels forsupport of PC products
and peripherals. Clients productswere supported bythird party providers inthe US.There was also aneed to reduce contact
costs at least by 30%.Improving first timeresolution was acritical SLArequirement.Client already had offshored into Ireland India and Philippineswere considered asthe next destinations.
The Transitionteam visited theclient sites for aduration of 3 weeks.
Mapped theexisting processesand reviewed thedocumentationavailable.People profile wasidentified and
Training needschalked out. Technology wastested andconnectivity wasestablished.
Pilot for both voiceand email waskicked off within 90days of transitionfrom our Delhicenter.
We haveramped up by30X from the pilotstage.
Mumbai wasadded as anadditional site.
Service windowsexpanded to 24*7
Today, weprovide Technicalsupport (L1-L2)and problemresolution forretail and SMEcustomers fordesktops,portables andperipherals.
Our
solutionTransition Operations
The scope ofwork hasincreased fromone division to
multiple divisionsin the company.
#1 in FTR SLAworld-wide acrosscall contactcenters of the
customer.Target: 72%Achievement:85%
C-Sat ratingTarget:85%Achievement:90%
After an exhaustivedue diligence, theclient chose India andus as the partner to
pilot.
Initially, e-mailsupport was chosen asthe channel sincethe client hadmisgivings on voice
quality from India.
Recommended a pilotwith voice and email which the client agreedto.
Performed an onsiteanalysis to firm up theschedules and plans.
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Client
situation Impact
The client operates20 call centersworldwide with 11 inthe U.S and nine
outside. These centers arestrategically locatedaround the world tomaximize efficiencyand ensure higherservice levels to their
customers. 6500 call centerrepresentativeshandled more than 91million customers Focus on improving
customer experienceand reducing costs ofrunning a widespreadnetwork, theyoutsourced selectreservation processes.
A cross functionalteam of SubjectMatter Experts(SMEs) was sent to
clients onsite. The SMEsconducted a detailedstudy of existingprocess tounderstand, validateand adapt existing
process to makethem remotecompatible.Transitioned theprocess offshoreusing the Transition
Tool Kit. Clients trainerstraveled to India totrain the first batchof Technical SupportEngineers (TSEs).
Connectivity withclient systemestablishedthrough dedicated
Voice and Data T1connection atMumbai.
Service windowsexpanded to 24*7.
Operations teamhas the overallresponsibility ofmaintaining SLAs,quality metrics,resource planning
and operationalissues. Team size of350 FTEs.
Our
solution Transition Operations
End CustomerSatisfaction
Decreasedaverage handle timeby 18%
Improved Process
Consistentlyoutperformed theclient defined SLAs
for the quality ofcall handling
Cost Saving
For Phase 1, aninitial customer
service cost savingof US$12-15 Millionper annum hasbeen projected overa 2 year period
Used a structuredtraining methodologyto transition keybusiness process.
The transition ofthese processesensured 24X7services.
Specific techniques
such as dialoguemodeling acquiredduring training assistsefficient customerhandling.
These techniquesare adhering to all theguidelines of the U.SDepartment ofTransportation.
Case study: Customer interaction services - leading US airline
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Case Study: Back office underwriting leading UK based insurance firm
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Client
situation
The UK Insurance marketis dynamic with immensepressure on the companiesto increase their market
share, revenues besidesbeing mindful of the pricewar and pressure fromreassurance companiesand the govt. regulations.
To quickly identify an
outsourcing organization,which can take on tasks ofunderwriting and policygeneration and help the UKinsurance company tofocus more on marketing
and sales of their productsand help them becomeprice competitive.
Started with pilot of 70
FTEs for:
- Initial underwriting
- Senior underwriting- Data capturing of Life
Policies
Critical performance
management measures
taken corrective
actions and weekly stackrankings
WSM performed better
on all parameters for
Indexing, data Capture,
Initial and Seniorunderwriting
Our
solutionOperations
Client has achieved costefficiencies and flexibility;thereby in a position tooffer better price in their
market due to increase inmargins
Client would be in a betterposition to focus on directmarketing and productdevelopment
Faster time-to-market
Reduced operating risks
Client has released the
success of the project andis ramping up to 250 FTEs
Wipro Spectramind
solution built around:
- ability to identify and
train the resources- technological capabilities- ability to scale up- establishing detailedprocess metrics andbaselines
Detailed risk mitigationstrategy worked out withthe client
Impact
Case Study: Back office underwriting - leading UK based insurance firm
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Offshore BPO: Continued value over time
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Cost arbitrage
Process
efficiencies
Optimization and
consolidation
Sample
Process
LaborArbitrage
Minimum
Quality
Better Process
Stiffer Quality
Process Improvementsby leveragingdomain expertise
Evaluatingautomationoptions
Best in Class
Consolidationacross globaloperations / callcenters
Optimizeprocesses
Maximize savingsthrough better turn-
around andreduced defectrates
Phase I
Phase II
Phase III
Increasing
customer
value
Time
Offshore BPO: Continued value over time
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Service delivery framework
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Process
knowledge Horizontal
Vertical
Strong
program
managementcapability Change management
Transition management
Technology
platform
expertise Enterpriseapplications Domain specific
Superior
quality and
execution
excellence
Innovative
people
practices
Robust global delivery model
Economic benefits
Significant cost savings to clients Incremental revenue at lower cost (e.g. telesales)
Operational benefits
Meeting & exceeding Critical performance Measures/ SLAs
People benefits
Higher customer/employee satisfactionscores for clients Better talent mgmt.(e.g.
low attrition, higher skillsupgrade)
P3
Creating world class business processes
Power
of P3
Service delivery framework
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