Global Sourcing Market Vista –Preview Deck · and some KPO services Increasing scope Significant proportion of operations now Regulatory risk Ensuring compliance with regulatory

Global Sourcing

Market Vista – Preview Deck

Copyright © 2008, Everest Global, Inc.

ERI-2008-8-PD-0256

Summary

� The Market Vista service aims to provide a continuously updated fact-base on key developments in the global outsourcing and offshoring market

� Quarterly reports highlight key trends, emerging risks, and implications for market participants

� Coverage spans multiple facets of the market� Deal trends in the marketplace� Health of the captive marketplace and key trends

Insights on leading financial services companies� Insights on leading financial services companies� Current and emerging location risks and new opportunities� Supplier capabilities and related developments

� Quarterly reports may be supplemented by access to key analysts, with the opportunity to gain clarifications and additional insights

2Copyright © 2008, Everest Global, Inc.

ERI-2008-8-PD-0256

Contents

Product overview

Illustrative contents


ERI-2008-8-PD-0256

The increasing complexity of the outsourcing market

has amplified the risk exposure for companies

Vendor and model proliferation

Multiple service providers and business models

Large span of functions

Typically combination of many IT, BPO and some KPO services

Increasing scope

Significant proportion of operations now

Regulatory risk

Ensuring compliance with regulatory guidelines in source and destination countries across suppliers

Performance risk

Managing quality of service delivery, attrition, knowledge retention

Business case risk

Managing wage inflation without affecting quality of service

Data security and

Factors driving increased risk Examples of risks

4

Significant proportion of operations now in low cost locations

Dynamic economies

Most delivery locations are emerging economies going through rapid change

Global delivery chain

Services often delivered from multiple locations with diverse risk footprint

service

Concentration risk

Data security and

intellectual property risk

Implementing measures to safeguard data and intellectual property

Business continuity risk

Currency risk

0.

Most large companies have capabilities in global risk management. However, the level and type

of risk exposure that is emerging from the globalization of services is unprecedented


ERI-2008-8-PD-0256

Sourcing leaders are being asked to manage risks

associated with global sourcing and support the

delivery of transformational results

What are my peers doing?

What is the real inflation and how

does it compare to price increases in

my portfolio?

How can I better manage forex

changes?

Are there opportunities

to optimize my pricing?

What new risks are my suppliers taking

Who are the How are the

Are there new govt. incentives that I can avail?

What new service delivery models/ suppliers are my

peers leveraging?

Are their any new political or macro-

5

my suppliers taking on?

Who are the emerging

suppliers in my areas?

How are the relative costs

moving across locations?

political or macro-economic risks I need to be aware of NOW ?

Key decisions that Sourcing managers need to support

� Comparison with peers� Location risk management� Supplier selection and optimization� Design of new deals � Price benchmarking and contract renewals


ERI-2008-8-PD-0256

Market Vista provides continuously updated facts and

analysis every quarter to enable effective management

of global services portfolios

Supplier developments

� Key developments among 20 leading global suppliers � Deal activity / momentum� Capability changes (M&A,

delivery footprint expansion, etc.)

3

Location trends and risks

� Risk dashboard capturing key current and emerging risks� Geo-political/ economic

changes� Emerging labor pool and

cost pressures

2

Market and BFSI overview

� Outsourcing deal trends and momentum� Analysis by industry,

geography, etc.� Listing of major BPO/IT

outsourcing deals

1

Each quarterly Market Vista report captures developments across three key areas


ERI-2008-8-PD-0256

expansion, etc.)

� Detailed profiles for each player updated each quarter

� Focus on a select group of suppliers (e.g. Chinese suppliers, KPO providers) highlighting key capabilities and trends

cost pressures

� Key location developments � New center setup� Government initiatives

� Focus on a select geography� Deep fact-base on key

cities (costs, inflation, attrition, currency, etc.)

� Perspective on emerging cities

� Sustainability of arbitrage

outsourcing deals

� Captives analysis� New set-ups, divestures� Emerging market trends

� Focus on the Financial Services industry� Transaction analysis� Developments across

global majors� Regulatory / industry

developments

Each section is organized along three sub-sections

that capture relevant analyses, implications and data

Section Sub-section

Market overview1

Location trends

and risks

2

Trend analysis

Focus topic

� Provides perspectives on market momentum across deals, captives, regulatory drivers, etc.

� Surfaces key trends and potential implications

� Details analysis and perspectives on a selected topic e.g.� Key developments in the Financial Services

Supplier

developments

3

and risks

Data snapshots

� Key developments in the Financial Services vertical

� Dynamics in a specific geography (e.g. India, Eastern Europe)

� Provides detailed data and fact-base to support additional analyses as may be required / relevant


ERI-2008-8-PD-0256

Contents

Product overview

Illustrative contents


ERI-2008-8-PD-0256

Each section of the quarterly report comprises 30+

pages of insight and data

Illustrative Table of Contents (page 1 of 2)

Section I A: Trend analysis – outsourcing, offshoring and captives I-1

� Outsourcing transactions analysis I-2� Offshore transaction analysis I-6� Change in outsourcing transactions (Q-o-Q) I-7� Captive developments I-8

Section I B: Focus topic – Financial Services outsourcing and offshoring I-11

� Financial Services developments I-12� Impact of credit-crisis on Financial Services offshoring I-16� Summary of offshore activity for major BFSI players I-17

Section I C: Data Snapshots I-18

Topic Page no.

Section I C: Data Snapshots I-18

� Examples of large BPO and IT deals signed this quarter I-19� List of new captive announcements made this quarter I-21� List of captives with announcements for expansion I-23� Key developments for global banking, financial services and insurance majors I-24

Section II A: Trend analysis – Market activity, Risk dashboard II-1

� Market Activity Heatmap II-2� Risk Dashboard II-3� Risk Dashboard analysis II-4

Section II B: Focus topic – Eastern Europe II-9

� Eastern Europe: Sustainability of arbitrage II-10� Operating costs in leading Eastern European cities II-13� Operating cost inflation II-14� Currency trends II-17


ERI-2008-8-PD-0256

Each section of the quarterly report comprises 30+

pages of insight and data

Illustrative Table of Contents (page 2 of 2)

Section II C: Data Snapshots II-18

� Market activity: Key Developments in Q1-08 II-19� Regional Developments: Geo-political, Macro-economic II-21� Regional Developments: Leading economic indicators II-22� Regional Developments: Investment environment II-23

Section III A: Trend analysis – Key developments across suppliers III-1

� Supplier developments overview III-2� Analysis of supplier developments III-7

Section III B: Focus topic – Landscape of Chinese suppliers III-13

Topic Page no.

� Market activity in China III-15� Profile of Chinese suppliers III-17

Section III C: Data Snapshots- Details of key developments and profiles by supplier III-18

� Overview of suppliers III-19� Recent M&A activity by suppliers III-21� Recent alliances and partnerships forged by suppliers III-23� Key developments of suppliers III-24


ERI-2008-8-PD-0256

Section 1- Market section | Overview

Captures outsourcing transactions trends, captive developments with an emphasis on Financial Services players

Includes over 15

pages of data tables

across transactions,

captives and

financial servicesSource: Everest Research Institute Analysis11


ERI-2008-8-PD-0256

Section 1- Market section | Illustrative output

Transaction analysis for each quarter helps assess market momentum and trends over time

ACV of outsourcing transactions signed

US$ million

16%31%

16%

25%

4% 2% 6%0.19%

25%

177,489 4,011100% = 4,074 3,804

BPO

Others4

Number of outsourcing transactions signed

Number

22% 27% 26% 26%

3% 3% 3% 4%0.24%

11,909 385 333 403100% =

BPO

Others4

Both Both

80%67%

59%69%

Till date Q3 2007 Q4 2007 Q1 20082 1

1 For the purpose of this analysis, Q4 2007 includes all transactions signed in Jul-Sep 20072 For the purpose of this analysis, Q3 2007 includes all transactions signed in Oct-Dec 20073 Others includes deals for which functional scope was not publicly disclosed

Source: Everest Research Institute Transaction Intelligence Database

ITO 75% 70% 71% 70%

Till date Q3 2007 Q4 2007 Q1 2008

ITO

12


ERI-2008-8-PD-0256

Section 1 – Market section | Illustrative output

Coverage also includes captives, with a focus on setup, divestiture and other trends among captives

Unilever – Latin American shared services

centers sold to Capgemini

� Unilever’s financial services shared service centers for the Latin American region located in Santiago, Chile and Sao Paulo, Brazil have been divested to Capgemini for an undisclosed sum. About 400 FTEs will transition from Unilever to Capgemini

� Capgemini will provide F&A BPO services to Unilever for seven years

Royal Dutch Shell – Suppliers take over

Shell’s Global IT and telecom operations

� Shell recently signed a outsourcing deal with EDS, AT&T and T-Systems for managing Shell’s IT and Telecom infrastructure

� Staff across Shell’s four major IT hubs, including those in Shell’s Malaysia captive will transition to the suppliers as a part of the outsourcing agreement

AOL – Divesture of contact center

operations in India

� AOL’s captive contact center in Bangalore has been sold to Aegis BPO services. The divestment which is expected to be completed by April 2008, will involve the transfer of about 1200 AOL staff to Aegis

� Under the terms of the agreement, Aegis will provide customer service and technical support to AOL customers

Citigroup – Divesture of India captive put

on-hold

� Citigroup has put its captive divesture plans on hold as it is re-evaluating its strategy

� Last year, Citigroup was in talks with buyers for the sale of its captive, Citigroup Global Services Ltd. (CGSL) and came close to reaching an agreement with Genpact. However, an agreement could not be reached over the terms of the deal

Source: Company reports, News feeds, Everest Research Institute analysis13


ERI-2008-8-PD-0256

Section 1- Market section | Illustrative output

Developments among leading financial services players are profiled

Capital One

� Increased offshore adoption – Capital One has announced plans to reduce its UK workforce by 40% and shift more jobs offshore. The company plans to make 750 employees based out of Nottingham, UK redundant and re-locate some of the jobs to low-cost countries including India

UBS

� Increased offshore adoption – With a service center in Poland opening soon and the Hyderabad center ramping up to about 1,750 FTEs in less than 2 years, UBS appears to be riding the offshore wave

Lehman Brothers

� No increase in offshore adoption – Lehman has dropped the idea of a BPO center in the National Capital Region. The firm also recently shut down its mortgage capital division in India employing about hundred people

Morgan Stanley

� Captive divesture rumours dismissed – Morgan Stanley denied market rumours that it would be putting up its Indian business process outsourcing operation for sale. The company will continue to be committed to its captive, Morgan Stanley Advantage Services, which employs around 2,000 people and provides support for Morgan Stanley's institutional securities businesses globally

Source: Company reports, News feeds, Everest Research Institute analysis14


ERI-2008-8-PD-0256

Section 2: Locations section | Overview

Key developments and emerging risks across locations

Includes over 20


on market activity,

costs, wage inflation,

etc.15


ERI-2008-8-PD-0256

Section 2 - Locations section | Illustrative output

The Location Risk Dashboard identifies key emerging risks across prominent offshoring regions

Source: Everest Research Institute Analysis16


ERI-2008-8-PD-0256

Section 3 - Supplier Developments | Overview

Profiles developments across 20 leading suppliers, highlighting key implications for sourcing managers

Includes over 40


on M&A, new delivery

centers, management

changes, etc.

17


ERI-2008-8-PD-0256

Everest Research Institute has the resources, experience, and capabilities to provide companies with the strategic intelligence, analysis, and insight that are crucial to making the right decisions in today’s outsourcing marketplace.

With the vision of our leadership team, the personal commitment, and indeed, the passion of our professionals to deliver real value to our clients, our organization is unsurpassed in its ability to guide your company’s future success.

Everest Research InstituteTwo Galleria Tower13455 Noel Road, Suite 2100Dallas, TX 75240

Everest India Ground Floor, Tower AUnitech Business ParkSouth City - I, Gurgaon

Get the answers that lead to tomorrow’s success

18

Dallas, TX 75240U.S.A.+1-214-451-3110www.everestresearchinstitute.cominfo@everestresearchinstitute.com

Everest AustralasiaLevel 6, 90 Mount StreetNorth Sydney, NSW 2060Australia+61-3-9833-1018

South City - I, GurgaonNational Capital Region India 122001+91-124-304-1000

Everest CanadaThe Exchange Tower130 King Street West, Suite 1800Toronto, ON Canada M5X 1E3+1-416-865-2033

Everest Australia409a Wattletree Road East MalvernMelbourne, VIC 3145Australia+61-3-9509-3933

Everest Netherlands & Continental EuropeAtrium Building 3rd FloorStrawinskylaan 30511007 ZX Amsterdam+31-20-301-2138

Everest UK1st Floor, Accurist House44 Baker StreetLondon, W1U 7ALUnited Kingdom+44-870-770-0270

Everest Group150 E., 52nd Street, 16th FloorNew York, NY 10022U.S.A.+1-646-805-4000


ERI-2008-8-PD-0256

Documents

Global Sourcing Market Vista –Preview Deck · and some KPO services Increasing scope Significant proportion of operations now Regulatory risk Ensuring compliance with regulatory