Embed Size (px)
DESCRIPTION
Citation preview
CONFIDENTIAL AND PROPRIETARY
Any use of this material without specific permission of McKinsey & Company is strictly prohibited
NASSCOM GIC Conclave, New Delhi
March 21, 2012
Unlocking the full potential of GICs Findings from operations excellence
benchmarking
McKinsey & Company | 1
GIC Chennai chapter led the effort on operations excellence
SOURCE: McKinsey
Objective Benchmark the participating GICs to assess performance on
operations excellence
Identify key success factors, issues and themes on operations
excellence
Operations excellence
Benchmarking
peer set
Collect data from 11 GICs using our proprietary framework –
P360
Compare with 17 other GICs in database covering 800+
processes
McKinsey & Company | 2
GICs continue to drive high client satisfaction
SOURCE: McKinsey P360 benchmarking
Onshore stakeholder satisfaction on overall performance
Percent
83
7372
79 Operations
IT services 68
70
69
2009 2010 2011 2012
70
1
McKinsey & Company | 3 SOURCE: McKinsey P360 benchmarking
Percent of stakeholder response
16
29
3
52
Decrease from
current offshoring
level
Increase
by >30%
Increase
by 15-30%
Maintain current
levels of offshoring
How is your offshore penetration in India
likely to change in the next 2-3 years?
How is your offshore skill complexity mix
in India likely to change in 2-3 years?
4
29
67Increase in skill
complexity mix
Decrease in
skill complexity
mix
Maintain current
skill complexity
mix
Scale and relevance to global operations likely to increase 2
McKinsey & Company | 4
However, this growth will be accompanied by increase in
network complexity
Increasing footprint in India
Number of GICs (%)
1-2 cities
in India
>=3 cities
in India
2012
55%
45%
2008
72%
28%
More globalized delivery
Number of GICs (%)
1-2
Countries
>=3
countries
2012
43%
57%
2008
67%
33%
Increasing ownership mix
Number of GICs (%)
Primarily
in-house
In-house
and
outsourced
2012
59%
41%
2008
79%
21%
SOURCE: McKinsey P360 benchmarking
3
McKinsey & Company | 5
Ongoing cost leadership and ownership of business
outcomes will become most important priorities
SOURCE: McKinsey P360 benchmarking
Top two areas
to focus #
Onshore stakeholder priorities from offshore operations Relative focus across five areas (percent)
Ownership of business outcomes
Footprint concentration risk
Quality of delivery
Cost and productivity
Scalability and flexibility in operations
Manufac-
turing
Banking,
insurance
Telecom
& hi-tech
4
McKinsey & Company | 6
Wide variation in performance; top performers excel
consistently Performance on key outcomes
RULES-BASED DATA
(GICs > 1,000 FTEs)
121
118
117
112
111
107
107
102
100
99
98
97
97
93
88
85
82
80 +25%
GIC S
GIC R
GIC Q
GIC P
GIC O
GIC N
GIC L
GIC K
GIC J
GIC I
GIC H
GIC G
GIC F
GIC E
GIC D
GIC C
GIC B
GIC A
Fully loaded FTE cost Average indexed to 100
85
93
79
85
83
74
82
95
89
96
105
101
104
119
138
135
142
138 +35%
Net productive FTE time Average indexed to 100
92
89
96
95
92
94
96
96
93
95
94
93
97
95
96
98
99
98
Quality SLA compliance %
SOURCE: McKinsey P360 benchmarking
5
McKinsey & Company | 7
There are 6 imperatives for GIC leaders to drive the next wave of
operations excellence
Think
network, not
site
1
Manage risk
6 3
Align operations to
business priorities
2
Manage multiple
governance archetypes
Build capability to drive end-
to-end optimisation
4
SOURCE: McKinsey
Streamline offshore platform
5
6
McKinsey & Company | 8
Key messages
1. India based GICs continue to deliver strong performance on client
satisfaction
2. GICs expected to grow further on both scale and skill, given its
strong and unique proposition
3. Increased footprint is however placing a new set of challenges on
managing network complexity
4. Further, emphasis on delivering business outcomes while
continuing to drive cost and productivity efficiencies on the rise
5. While leading GICs excel consistently across multiple parameters,
performance variation is large
6. Next wave of operations excellence will require GICs to build
distinctive skills in 6 areas
1
2
3
4
5
6
SOURCE: McKinsey
