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Bank of America Merrill Lynch
TMT Conference 2010London, June 9
Bank of America Merrill Lynch
TMT Conference 2010London, June 9
CEO, Global Outsourcing
Paul Spence
2
Together. Free your energies © 2010 Capgemini
2010: Three keys to a successful year
�Growth: accelerate the top line recovery by focusing on 5 key market segments
�Competitiveness: increase further with Lean and offshore
�Change: get ready for new technologies and business models
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Together. Free your energies © 2010 Capgemini
Growth: detailed process to select the right priorities leading to 5 top line initiatives
Smart Energy Services
Testing
ALS
Market Momentum High GrowthLow Growth
Com
plet
enes
s of
Offe
r
Strong
Weak
Invest NowLow Potential Contender Strong Potential
Enterprise Mobility
ITS - Unified Comms
Green IT
Security
ITS - Virtualization & Clouds
Business Info Mgmt
Large bubbles indicate larger market size
CTP
Crescent
X
XX
X
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Together. Free your energies © 2010 Capgemini
Growth: first five months highly encouraging for the top line initiatives
� Financially• Roughly 1/3 of bookings• Roughly 1/4 of Revenue• CM Several points above rest of business
� Operationally• Several points better win rates in CC and TS businesses • Faster way for OS to win new work • Shifting of Alliance role and focus
� But…• Requiring intensified recruitment to optimise results• Requiring increased reskilling of work force
Shifting portfolio from geographic fragmentation to un ified global capability
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Together. Free your energies © 2010 Capgemini
Growth: a strong base to evolve business models and innovate
� Application Lifecycle Services – Catch up with industry, then surpass with a twist
� Testing – Industry best processes w/ consolidated delivery
� Business Information Management – From data to information to sector solutions
� Infostructure Transformation Services – Technology change of XaaS and unified communications
� Smart Energy Services – MBS with monitored investment and risk
On track for above market growth AND improved margins for the five GSL’s
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Together. Free your energies © 2010 Capgemini
Waiting for previous processes to finish. Waiting for material to arrive.
Production of parts without a customer order.
Time spent making defecting products that can not be accepted by the customer.
Excessive human / equipment effort – poor layout and process design.
Adding to a part something that is not required by the customer.
Raw Material / WIP / Finished goods – tied up capital.
Moving parts from one location to another without adding value.
Waiting
Over Production
Rework
Motion
Over Processing
Inventory
Transportation
Competitiveness: industry process improvement methods can be applied to services
The identification and elimination of waste is fund amental to Lean – reducing costs and increasing profit. Other benefits are de rived from waste elimination…
The identification and elimination of waste is fund amental to Lean – reducing costs and increasing profit. Other benefits are de rived from waste elimination…
Toyota Examples�Testing team waiting for code to arrive
�Unassigned capacity between projects
�Waiting for responses from offshore teams
�Detailed reports that no-one reads
�Develop exceeding scope of contract
�Poor trained people
�Late test execution in development process
�Searching for files
�Resources switched within different tasks
�Repeated data entry in different environments
�Non-actionable supporting tools
�Huge ticket backlog
�Large number of features waiting for batch release
�Meeting in different sites
�Multiple handoff in ticket management
Service Examples
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Together. Free your energies © 2010 Capgemini
Focus Example findings
Inefficient resource on-boarding
10% productivity loss due to 23+ days delay in on-boarding
Offshore resource utilization 28% idle time for offshore resources
Low use of rightshoring Only 19% FTEs offshore
Manual testing70% of test steps could be automated for Regression and Negative testing
Missed CR revenue 36 CRs (worth €50K) unbilled to client in current phase
Re-use of standard tools
~3 days spent by 30% of project team members creating templates for project use
Focus Example findings
Inefficient resource on-boarding
10% productivity loss due to 23+ days delay in on-boarding
Offshore resource utilization 28% idle time for offshore resources
Low use of rightshoring Only 19% FTEs offshore
Manual testing70% of test steps could be automated for Regression and Negative testing
Missed CR revenue 36 CRs (worth €50K) unbilled to client in current phase
Re-use of standard tools
~3 days spent by 30% of project team members creating templates for project use
Competitiveness: first pilots validate Lean benefits and scalability
Focus Example findings
Root Cause Analysis 0% proactive analysis on P3 and P4 incidents
Incident Management 20% of tickets return to user for more information
Change management 14 duplicate entries of data across 4 systems for a client CR
Change Management
100% of non-financial data fixes require same approval as full system deployment
Time Management 100% of support staff spend 1hr/week ensuring that data in Clarity and DTX match
Transition Management
6.5 days per month spent by Transition managers chasing project managers for plans/documentation
Focus Example findings
Root Cause Analysis 0% proactive analysis on P3 and P4 incidents
Incident Management 20% of tickets return to user for more information
Change management 14 duplicate entries of data across 4 systems for a client CR
Change Management
100% of non-financial data fixes require same approval as full system deployment
Time Management 100% of support staff spend 1hr/week ensuring that data in Clarity and DTX match
Transition Management
6.5 days per month spent by Transition managers chasing project managers for plans/documentation
� Pilots proved that significant capacity release is possible through the Lean approach
� At December ASEs, SMEs confirm that over 50% of pilot findings are scalable
� Sustainability is achieved by changing behaviours and installing robust performance management systems
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Together. Free your energies © 2010 Capgemini
� Serve 900 clients from offshore
� Deploy 32,000professionals in low-cost delivery centers
� Growing at 32% offshore penetration
INDIA
20,50022,00025,000
EASTERN EUROPE
3,7004,1004,200
CHINA
1,0001,2001,200
LATIN AMERICA
1,2001,8502,300
MOROCCO
220260260
Red 2008 headcountBlack 2009 headcount Blue 2010 headcount (est.)
PHILIPPINES
NEW!
Competitiveness: Offshore is close to a third of our headcount
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Together. Free your energies © 2010 Capgemini
Beyond price, we are managing customer-focused innovation in three ways:
LEAN
AGILEVIRTUALREALITY
If the price is right…
…then, if we demonstrate a world-beating solution…
…we earn the opportunity tooffer a winning deal
POSITION COMPETITIVELY
PRICEPOINT
COMPELLINGSOLUTION
VALUE& DEAL
DEPTH OF DOMAIN EXPERTISE AS CRITICAL AS SCALE
CoEs SOLUTION AREASCOMMUNITIES
VISUALISATION
CLOUDCOMPUTING
Competitiveness: offshore is key to pricing but increasingly also to value added
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Together. Free your energies © 2010 Capgemini
OFFSHORE GROWSOFFSHORE AS ‘PIVOT POINT’
FOR INNOVATION
Offshore serves as the coordination point for gathering leading solutions from one BU and launching them into all.
Innovation in Cloud services, SaaS, BIM, SmartX and others will continue to make us popular as an expert provider of leading solutions.
!
!!
!
!!
THAT WAS THEN (2007)
� Services unit of a large French telco
� Single project. Early stages of offshore usage.
THIS IS NOW (2010)
� € 20m across multiple projects during last three years and extended for additional three years.
� Offshore leverage over 80% across multiple projects. Some projects at 100% offshore leverage.
� End to end delivery managed offshore
OUR APPROACH
� Focus on understanding business requirements.
� Mutualized team and flexible staffing across multiple projects.
� End to end responsibility of customer relationship
Competitiveness: some of our key repositories are now in India
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Together. Free your energies © 2010 Capgemini
We are growing…
...through bringing new innovation to our customers
We are stretching margins…
…bringing more offshore capability into our propositions
We are unifying delivery…
…by cross-fertilizing capability through transversal offerings
KEY INITIATIVES
� Joint account management
� Framework penetration
� Rapid lead generation
� Large deal teams
KEY INITIATIVES
� Low-cost deployment
� Fixed-price delivery
� Competitive pricing
KEY INITIATIVES
� Centres of excellence
� OneTeam delivery
� Customer visit experience
GROWTH
CUSTOMER MARKETS INDIA & OFFSHORE
MARGINS
Competitiveness: offshore now contributes to all aspects of business improvement
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Together. Free your energies © 2010 Capgemini
Change: back office industrialization will progressively share the stage with technology drivers
Growth
Time
Business maintenance and BO industrialization
New custom softwares
New custom softwares
Dispersed device
systems
Dispersed device
systems
Systems of systems
Systems of systems
2010/2011 ?
Tipping point
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Together. Free your energies © 2010 Capgemini
CustomedServices
Shared resources
IP
Infrastructure
End-to-endservices
Flexibility
Saas+BPO
Service platform
Interaction platform
Xaas
Change: clients are progressively starting to adopt these new drivers
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Together. Free your energies © 2010 Capgemini
GOV TME
Risks & regulation
Online 2.0
Rail network management
PLM
Consolidation
Customer lifecycle
management
Emerging markets
Customer analytics
Multi-channel
Billing & customer
information systems
New entrants
Smart meters & smart grid
E-border
eHealth
Tax systems
Billing
Smartphones
Digital media
Level of change
Security systems
Network engineering &
field management
ConsolidationStandardization
Diversification
Consolidation
Retail EUC FS ServicesManufacturing
Long term growthCapgemini has some strong positions and consulting favors business alignment
Change: in each sector specific factors are driving change
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Together. Free your energies © 2010 Capgemini
AggregatedCloud services
AlliancesPartners
Bundling BPO + Software platform
TechnologyBusiness
Integrator andOperator
Complex customsoftwares
Security SLAs
Sector expertises
Partner resources
Eveything as A service Own resources
Service Intelligence
Change: we’ll progressively have to rethink our role and our whole ecosystem
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Together. Free your energies © 2010 Capgemini
Summary
�Growth: our five top line initiatives accelerate our return to growth, still our preferred scenario
�Competitiveness: we continue our journey to a blended delivery model and Lean opens door to a significant cost decrease
�Change: new technologies offer new opportunities but we must also rethink our role
Bank of America Merrill Lynch
TMT Conference 2010London, June 9
Bank of America Merrill Lynch
TMT Conference 2010London, June 9
CEO, Global Outsourcing
Paul Spence