Topic: Everest Group PEAK MatrixTM for PO Service Providers€¦ · assessment of PO service providers based on their absolute market success and delivery ... opportunity assessment

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.

https://research.everestgrp.com/Product/EGR-2013-1-R-0966/Procurement-Outsourcing-PO-Service-Provider-Landscape-with-PEA






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


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


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


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)


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


Infosys (page 3 of 5) PO delivery locations


Lodz

Hangzhou

Bangalore Chennai

Gurgaon Pune Mexico

Belo Horizonte

Manila

Czech Republic

UK

U.S.

Australia

Dubai

South Africa

New Zealand

Costa Rica


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


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


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


Appendix


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


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


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


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


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


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

http://twitter.com/EverestGroup

http://twitter.com/Everest_Cloud

http://research.everestgrp.com/

http://research.everestgrp.com/

http://www.everestgrp.com/

mailto:[email protected]





http://www.sherpasinblueshirts.com/

http://www.gainingaltitudeinthecloud.com/

Documents

Topic: Everest Group PEAK MatrixTM for PO Service Providers€¦ · assessment of PO service providers based on their absolute market success and delivery ... opportunity assessment