Cognizant and Business Process Outsourcing

Business Process OutsourcingA Management Process arising out of the

pressure in a ‘boundary less’ global economyIt helps in saving costs, providing flexibility

and improving operational performanceNo longer a short term tool but a long term

competitive advantageThe market can be broadly classified into-

Business administrationSupply Chain ManagementSales, Marketing and Customer Care

BPO Functional Operations

BPO in IndiaAmex and GE pioneered outsourcing in India

in 1990s

Major advantages – Cost and Labour

Growth of the industry has been more concentrated in the major cities

Large BPOs are now focusing on a ‘verticalized’ approach

BPO in IndiaThe growth of BPO in India can be classified

into four phases-

Company owned units pioneered BPO in India

Venture funded new companies

Leading IT services companies enter BPO

Domain/Industry Specialized BPO

Future OutlookDomestic segment to grow by 17% to reach

Rs. 149bn

Exports to increase at 12% to reach USD 16bn

Data analytics is growing fastest at 19%

Direct employment in the industry to cross 6 lakhs growing at 7%

INFOSYS: Augmented outsourcingAugmented outsourcing presents the opportunity

to outsource adjacent processes of the value chain.

This augmentation could be upstream or downstream as desired and beneficial by both parties.

Effects:Impact on the cost of revenue sideHelps client to co-create innovationProvides a pool of business experts who are have

cross-functional analytical expertise.

BENEFITS

- Skill and capacity augmentation

- Analytical and judgmental

improvements-Real world outcomes

and solutions rather than modular solutions

-Support s adjacent processes rather than a

niche process-Develops new links to

support the current structure

- Learning curve comes into picture.

-As the same provider works on the processes, it

can improve upon the process.

Example: Sales supportThe provider has been contracted for:

Sales support of the value chain. Support for market research and telemarketing

Augmented outsourcing benefits: Improvements in channel partner assessment.

TCS: Business-Process-as-a-ServiceThis process uses private cloud to host

application needed by the client.

Useful for small and medium businesses.

Optimum cost solutions supported by best-in-class technology are the key to success of this model.

BenefitsUse of a variable pay-as-you-use pricing

model that helps to maintain minimum capital expenditure.

Services available for both industry specific functions and cross industry specific functions

Customized technology environments creating efficiencies

Standardized business processes with state-of-the-art applications and technology

CTS and Business Process Outsourcing:A horizontal group spreading across all the

verticals.USP Factors:

• Customer satisfaction• Operational productivity• Strategic value• Transformation

"higher-end" servicesBPO, IT Infrastructure Services & business

consulting contributed to 15% of revenue in 2012

Business Delivery Model:Two-in-a-box

• Customer relationships Manager• India-based managers - oversee offshore

delivery ServicesThree-in-a-box

• Adding a business consulting layer to its "two-in-a-box" model

Organized into several verticals and horizontal units

Redefining Business Process Outsourcing:

BPO as a simple cost playInfuses key business activities with technology

levers• Better skills and industry knowledge• New technology and re-engineered processes• Knowledge-intensive and industry-specific

processes• Increasing process effectiveness and

efficiency.

CASE: CTS Client and Solutions in BPOCognizant was engaged by a Fortune 500

pharmaceutical client to provide end-to-end clinical data management services, for all its global R&D sites.

The execution of this complex transition involved:

350+ FTEs ramped up in less than 6 months;7 R&D sites in 4 countries;Re-badging of client employees onshore;

CASE: CTS Client and Solutions in BPOTransition to two offshore locations (Mumbai

andChennai) and one nearshore location

(Budapest);Diverse set of processes, and more than 50

global applications, centralized in a single Data Management Center (DMC)

High customer satisfaction scores from a survey, carried out during transition.

CASE: CTS Client and Solutions in BPO

Future ChallengesNew technologies which are driving new ways of

organizing and operating More collaboration More flexible business processes and technology

infrastructure Ability to make (and dissolve) spontaneous connections with

customers and suppliers

Megatrends pushing companies from traditional business models (enterprise 1.0) to the next-generation enterprise global asset-light virtual in its operations skilled at leveraging flexible technologies

Future TrendsThe businesses will need to overcome multiple challenges,

Securing dataNurturing an adaptive cultureDeveloping strong change management program to

sustain momentum

Cognizant offers various products and services to cater to the needs of business partners and help them in the process of:Reinventing the business model to be more collaborative

and less hierarchicalRethinking which activities are core to their competitive

edge versus which would be better handled by a third-party with deeper and more scalable expertise

Rewiring the technology architecture to be more virtual, agile, and Web 2.0-based

Services @ Future Future of Work Business Assessment Model:

To help businesses reach its full potential

Benchmarking and Metrics Analysis: Cognizant’s Index for Future Readiness is utilized to help change the way client work. This index is a unique repository of client and non-client survey data from top executives at approximately 200 leading enterprises and spanning 125 metrics.

Shortfall of existing business modelIncreasingly complex projects Reason for failure of complex projects

Poor Understanding of clients requirementChanging requirements during the project

development phase due to complex nature of the project

Decision making process of the client is not known to the provider

Cognizant 2.0Focus on “intellectual arbitrage” rather that

“labour arbitrage”It is the ability to bring all the expertise a global

services firm has around the world to bear on a client’s critical business requirements

Cognizant 2.0 is a Web 2.0-based platform that enables Cognizant associates (and eventually business partners and clients) worldwide to collaborate virtually and deliver significant time-to-market, cost and IT transformational value to clients

Component of Cognizant 2.0

A high-powered knowledge management system

A standardized project and workflow management system

21st-century tools to help solve their clients' 21st-century challenges

THANK YOU