Experience Certainty.

Business Process Outsourcing

V K Raman, Global Delivery, BPO ServicesAnalysts Day, 5th Feb 2007

5 February 2007

5 February 2007

BPO Services : Agenda

•Business Overview

•Market Opportunity

•Growth Strategy

•Case Study

5 February 2007

ADM, 53.5%

Asset Leverage Solutions, 2.8%

Consulting, 3.4%

Assurance, 2.3%

Business Intelligence, 9.5%

Enterprise Solution, 11.8%

Infrastructure, 5.5%

BPO, 5.8%EIS, 5.4%

Based on Q3 FY2007 Revenue

Business Overview : Revenue by Service Line

+528% Year over Year

5 February 2007

Business Overview : OfferingsBanking &

Fin.Services Insurance Telecom HealthCare

Travel &Hospitality Retail

HR- Payroll

Supply Chain Management

Customer Interaction Management

Knowledge Process Management

Finance & Accounting

Other HR Processes (e.g. Employee Data Mgmt.)

UtilityServices

Task Level Automation

Shar

ed

Serv

ices

Valu

e Ex

trac

tion

App

roac

hIn

dust

ry S

peci

ficO

fferin

gs

Manufacturing

HRInfrastructureTransition Operations Quality Administration

Del

iver

y Ex

celle

nce

BundlingIT & BPO

Sour

cing

and

Log

istic

s M

anag

emen

t

Rev

enue

Ass

uran

ce

Ord

er P

rovi

sion

ing

Clin

ical

Dat

a M

gmt.

Rev

enue

Acc

ount

ing

Loya

lty A

dmin

istr

atio

n

Fare

Fili

ng

Secu

ritie

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sing

Che

ck P

roce

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g

Mor

tgag

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Stat

istic

al A

naly

sis

Cre

dit C

ard

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ratio

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Cus

tom

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naly

tics

Mer

chan

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War

rant

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are

Part

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anag

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Sale

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Polic

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Clo

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Boo

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Cla

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Adm

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New

Bus

ines

s Se

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ing

5 February 2007

Growth Strategy : IT and BPO Synergies

• In-depth knowledge of systems and offerings

• Significantly lower transition time because of easier knowledge transfer

• Process improvements through task level automation

• Single vendor control• Significantly reduced fixed costs for vendor

management• Near zero technology maintenance cost• Utility based offshore delivery model

Increased bundling of IT and BPO in large outsourcing contracts Benefits enterprises

22% 22% 21%

61% 59% 58%

17% 19% 21%IT and BPO

IT Services and Software

Hardware

2002 2004 2005

Bundling of IT and BPO more predominant in mature offshorers

Source : McKinsey

5 February 2007

Growth Strategy : Sustainable Competitive Advantages

Global Network Delivery Model

• Deliver 24 X 7 using follow the sun approach.• Deploy local associates to undertake task needed

for regulatory and language skill reasons.• Mumbai, Chennai, Bangalore, Budapest, Santiago

(Chile), Montevideo (Uruguay), Hangzhou (China), Peterborough (UK), Missoula (US) & TCS IT Delivery Footprint

Leveraging IT-BPO Synergies

• Bundling of IT & BPO, process automation and productivity improvements

• Significantly lower transition time & risk given in-depth knowledge of customer process & IT systems

• Effective feedback capture from day-to-day operations for system enhancements

Domain Led Offerings

• Focus on key Horizontal Offerings and specialized vertical slivers

• Work in focused domains• Reutilize TCS’ intellectual property – tools,

methodologies & frameworks• Benchmark to best-of-breed industry standards,

processes & practices

Platform Based Offerings

• Eliminate client fixed technology & service delivery cost by offering completely variable utility / transaction based pricing

• Powered by in-house developed platforms

5 February 2007

Case Study : Pearl Deal

Business Needs:• Reduce cost of operations• Transparency in pricing and joint value discovery to reduce costs ??

Business Solution Offered By TCS:• Comprehensive transformation plan

– Migrate 13 platforms to TCS platform (IIMs)– Offshoring from year 2– Process improvements

• Investment mindset– Development of proprietary L&P platform – IIMs– Upfront investments for takeover of operations

• Experienced deal team– Practitioners with significant UK L&P business – expertise– Dedicated deal team created from TCS! Insurance practice

• IT/BPO synergies– Cost savings maximized by bundling ITO and BPO using platform rationalization, process-re-

engineering and off shoring

Business Benefits• 45% total savings to Pearl form outsourcing by process optimization, platform consolidation and

automation, offshoring• System rationalization, productivity improvement, selective offshoring and economies of scale via new

books• Ability to address large “closed book market” as a third party provider

Company Overview• Over 2 million

policyholders • £27 billion of assets.• Closed book

insurance policy portfolio

Size of deal• $847 million over 12

years• 950 FTEs

18%

16% 45%

11%Process

opti-mization

Platform consoli-dation

and auto-mation

Off-shoring Total savings

from out-sourcing

5 February 2007

Case Study : Large Retail Chain - Chargebacks

Business Needs:• Tracking of Process metrics• To improve Chargeback reversal rate• Movement to paperless operations

Business Solution Offered By TCS:• The process was decided to be moved offshore as “lift and drop” to quicken savings to the customer.• TCS well defined and time tested quality framework was used to understand the existing process and

gaps. Added a software system to help in – Better identification of valid chargeback and & potential reversals / invalid chargeback.

Eliminate the time spent on ivalid chargeback. – Algorithm based prioritization of potential chargeback reversals by $ value, due date and type

of card. Focus on invalid chargeback greater than $1000 • Added a digital Fax solution where the docs are sent and received in form of an image through a Fax

server.

Business Benefits:• The reversal rate was improved from 45% to 70%.• The bottom line was increased by $ 1 Million USD per month. Projected savings in one year $ 15

million USD • The customer is able to strategically focus on the valid chargeback which in turn prevent the

recurrence of those transactions and improve their bottomline.

Key Learning & Findings: • IT – BPO Synergy

Company Overview• Fortune 50 large US

retail chain with revenues greater than USD 80 B.

Size and Scope of Process• FTE Strength - 20• Analyse Credit Card

Disputes• Fax chargeback

notices to the stores• Follow up with stores

by making calls • Send complete

documents to the bank

Systems Used:• IBM• MS Access Database• Receipt Look Up

5 February 2007

Case Study : Global Publishing & Media Co.

Business Needs:• Inefficiencies in processes onshore, resulting in poor performance on metrics • High cost of providing service in a non-revenue center• Inability to improve process efficiency due to Physical work flow tracking and reporting system

Business Solution Offered By TCS:• Offshore processed 100% of the volumes two weeks ahead of schedule, a reflection of the smooth

knowledge transfer • The project became SAS Type 1 compliant within 3 months of BAU and there were no non-

conformances • The client is billed for 21 FTEs in the first year and in the subsequent 2 years TCS is expected to reduce

billing to 19 FTEs• A Web Tool was developed to enable onshore to track the process and view reports at any point of time

Business Benefits:• FTE Cost arbitrage of approx. $ 80,000 / month.• Increased first day applications rates by 5 % , thereby reducing follow ups with customers resulting in

operational savings.

Key Learning & Findings: • Implementation of Web based Tool to ensure real time communication with Onshore team , this leads to

faster transaction response times.

Company Overview• A large Global

publishing, financial, information and media services Company

Size and Scope of Process• Accounts Receivable /

Cash Application Process

• 19 TM, 1 TL & 1 PM

Systems Used:• Oracle and Lawson

based AR System

5 February 2007

Case Study : Large US Retailer

Business Needs:• Consolidate processes to deliver from single location providing a standardize & unified experience.

Removal of redundant and manual activities• Reduction of Backlogs• Prevent $0.5m revenue leakage due to excess payment made to vendor every month

Business Solution:• Lift & Drop Approach to transition. Phased transition by process• Developed the workflow applications for easy tracking and effective monitoring• Web Portal developed to provide the clients with online reports• Developed an utility to prioritize activities

– Chargeback reversals prioritized by date and value • Digitized some of the activities

– Added a digital Fax solution

Business Benefits:• BPR drives savings worth 18 million dollars annually

– Identified the top 20 accounts for the companies & resolved In the past 7 months $3.6m overpayment by adjusting open credit notes to over due invoices

– Created visibility on warranty invoices and saved more than $1m in past 7 months– Introduced system changes in the billing software leading to reduction in incorrect billing

and resulting in $1MM (Approx) saved every month • 24 hours assured cycle time on retail price change adds to the Competitive Advantage by allowing

implementation of new promotions in a very short time• Credit Card Chargeback reversal rate increased from 40 % to 75% resulting in increased savings of

$1 MM a month.

Company Overview• Fortune 100 Retail chain

with annual revenues greater than $80 B.

• Targets the home improvement market

Size and Scope of Process• Finance & Accounting

(150)• Technical Helpdesk (80)• Email Support (100)• CC Chargeback (40) • Merchandizing (15) • Price Change• SKU Count Mgmt &

status update.• Suspense Purchase

Order (PO) deletion and status change

• Customer Interaction ( 30)

• Voice / Email Helpdesk • Services (45)

Systems Used:• IBM Mainframes• Access Database• Microsoft Outlook

5 February 2007

Case Study : A leading Global Investment Bank

Business Needs:• To reduce Cost of Operations and Improve productivity• Client data validation and system integration to enable efficient reporting system• Centralised operations to support multiple regions• Dedicated team for each process

Business Solution Offered By TCS:• Transition Approach - Structured transition methodology adopted with focus of Process

documentation, knowledge curve, efficiency & Quality output to run the bank activities.• Team Mix- Team consisting of Team members, Team Leaders and Ops Manager with a right

mix up of graduates and post graduates with specialization in Finance.• IT Leverage – Strong synergy on the IT application side between the TCS teams on IT and

BPO. Frequent interactions with IT team, that handles Deutsche Bank’s credit risk repository

Business Benefits:• Generation of accurate valuation statements in a timely manner• 22/5 coverage to provide a wide range of services to customers• Cross training imparted to curb team member dependency• Savings of approximately US$ 1Mn due to productivity improvements

Key Learning & Findings: • Expertise in application systems developed over a period of time• Process Improvements suggested

Company Overview• Large Global Investment Bank

with over € 1,097 billion in assets across 138 nations

Size and Scope of Process• Revaluation- Timely and accurate

generation of Client revaluation statements for FX, OTC derivative, Commodities products and securities for the bank’s clients (33)

• KYC - Revalidation of clients from Global Banking & Global Markets -The Risk Capital Management (RCM) division of DB

• Classifying the client in various risk buckets

• 100 FTE Avg/ month• Credit Risk – Supporting 7 Credit

Risk Management processes (75)• Static Data - Static data set up (A/c

opening/maintenance& SSI) for various products like equities, fixed income, OTC and MM products across different geographies (132)

• Systems Used: DB’s Systems and• applications

Experience Certainty.

Thank You

5 February 2007