kpo ppt

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Gearing for KPO

Some issues related to

Transition, Delivery &

Commercials

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Stabilization2005-2010

Consolidation(2002-2004)

Evolution of Knowledge Services in India

• 1996 - McKinsey conceives, builds and manages its Knowledge Center

• 1997 - GE Capital Services establishes its back office operations

Growth(1999-2001)

Inception(1996-1998)

• 1993 - iGate Global Solutions (formerly Mascot systems) establishes its offshore center in Banglore

• 1998 – Some Captives (such as Frost & Sullivan and Gartner) and third party players (such as Capital IQ) establish their operations

• 1999 – Amex Opens its back office operation

• 2000 – Third Party market competition increases with Mphasis, FreshMind and Office Tiger opening their operations

• 2001 –Evalueserve, Irevna and Netscribes enter as Third Party providers

• 2002 – ABN Amro and AT Kearney establishes their back office operations

• Start of knowledge services

• Captive players enter the Indian market

• Large captive players enter the market

• Third Party players start cropping up

• Competition among Third Party players heat-up

• Market consolidation• Collaborations between Third Party

player

• 2003 –Morgan Stanley and Prudential establishes their back office operations

• 2004 – ICRA and Bytes to Knowledge (B2K) collaborate to form Brickwork to offer financial services

• 2004 – Crisil acquires Irevena

• 2004 – S&P and McGraw Hills acquires Capital IQ

• Captive Players to increase foothold in the Knowledge Services market.

• Market Share of Captive Players expected to increase to 68% in the year 2010 from the current 62%

• Industry will comprise few large third party players along with the captives.

• Very few boutique firms likely to exist on a standalone basis

• Information Management and Analytics to fuel the market growth in the short run.

• Independent research for investment banks and large businesses to show traction going ahead

Characteristics:

Examples:


The spectrum of Knowledge Services

Business Research

Economics Research Company and Industry Research Documentation & Library Services

Investment Research Corporate Finance Financial Modeling and Analysis Investment Banking Support

Market Research Data Acquisition and Data Entry Data Processing Presentations

Information Management Database Creation Quantitative/Financial Statement Analysis Data/Information Synthesis

Legal Research Legal, Para-Legal Content and

Services Drafting, Review of Documents and

Contracts Legal Research (Case History)

Sourcing Management Spend Data Analysis & Supplier intelligence Low cost country sourcing Advisory Services

Intellectual Property Research Patent Drafting and Filing, Patentability Assessment Overlap Analysis, Competitor IP Landscaping IP Portfolio Management, IP Licensing & Commercialization

Analytic Services Data Warehousing Data Preparation, ETL services MIS & Reporting Business Intelligence Statistical and econometric

Modeling Optimization modeling and OR

solutions

Technology Research IT Services Application development and maintenance Security Internet & E- commerce

Knowledge Services


100

April 2004 May-05

300% Growth

Knowledge Services Employee Growth in WNS

400


Comprehensive industry-focused business units

Mortgage Processing

&Real Estate

New Segments

Knowledge Services

HealthClaims

InsuranceServices

TravelServices

Manufacturing, Distribution

& Retail

Reservation services

Customer service

Revenue accounting

Refunds and travel accounting

Fare estimation

Cargo & baggage management

Yield management

Underwriting

Policy administration

Claims management and collections

Accident & repair management services

Claims data validation

Pre-adjudication investigations

Adjudication

Repricing

Policy administration

Billing & receivables management

Business research & analytics

Market research

Data mining & analytics

Investment research

Shared Services(Finance & Accounting, Human Resources)

Contact Center(Phone, Web, Email, Correspondence)


KPO: Process evolution…two specific examples….

Survey Design

Survey Administration

Data Preparation

Data Processing

Analysis & Presentation

1

2

3

4

5

Market Research Processes Analytics Processes

Data Warehousing

Data processing

Business Intelligence

Analytical Intelligence

Statistical modelling/ORmodelling

1

2

3

4

5


AnalyticServices

27.5%

Market Research

11.5%

Business Research

9.2%

Legal Research

5.6%

Business Consulting

5.5%Information

Management33.2%

Investment Resarch

4.5%

Intellectual Property

2.2%

Sourcing Management

0.8%

Source : Nasscom, press reports and WNS Analysis

Current Market Share Of Key Knowledge Service Verticals by FTEs

Total: 12,000


Key emerging issues for KPO (vis-à-vis BPO)

Contracts How to define SLA’s for KPO process Duration of contracts?

Pricing

How to sustain the value proposition to the client?

Maintaining healthy P&L

Governance Structures Onshore offshore mix Unbundling of roles: Sales/Program

Management/Operations

Service Delivery How should operations be

organized for better financials and delivery conforming to client expectations?

Selling & Transition

Best practices for transition? Strategies for growth of KPO accounts?

Quality & Risk Management Business Continuity Information security & compliance Inventorize information assets


Selling & Transitioning

Synchronizing Sales and Operations

– Selling realistic scope of work

– Negotiating right SLA’s

– Selling skills at the right price

– Selling the program evolution in conformity with the delivery constraints

Transitioning of Knowledge process is job of specialist

– Choose the right specialist for diagnostics, process mapping and program management

Consulting approach required

– Focus on solution design instead of adoption of processes “as is”

– Beware of delivery constraints (Ramp up times etc)

– Program evolution to be aligned to delivery constraintsStructured approach to sales and program management is necessary and so is seamless interaction between operations team with Sales and PM team


Commercials Strong P&L’s at the program level is particularly necessary for high end processes.

– Both current as well prospective profitability is important

– Higher Seat Utilization is not always possible in KPO because of adhoc nature of work

– Watch out how you begin!!

Technologies are getting intelligent: redundancy of existing Knowledge processes

Beware of hidden costs in KPO: there are many!

Pricing approach (whether FTE or UTP or hybrid or time based or deliverable) depends on firm specific factors, process specific factors and program specific factors

– Innovation and flexibility necessary

– Should be a derivative of business model

`

Transitioning

InitiatingOffshoring

Management costs

Re-engineering tasks

•Diagnostics•Pilots projects•Cost of subcontracting

•Process mapping•Documentation•Knowledge transfer and training

•Improving processes•Automation•Re-allocation of infrastructure costs

•Time sheets•People management•Invoicing

Be scientific about pricing to the extent possible and to the extent possible be transparent with client on costs included


Contracts

Difficulties in defining SLAs

– KPO Programs begin with mostly ad hoc or customized projects (sometimes as “ proof of concept”)

– Shorter contracts (?)

– Standard times difficult to define. TAT could vary between 1 day to 20-30 days for complex projects

– Regular reporting work to ad hoc project work may be 20:80

– No pre-defined process for creating deliverable

Customization of contracts: Do not depend on “master” template.

– E.g. analytics processes are different from Market Research processes

– Continuum of complexity

Let the business model define the contract

– Need to contemplate on the governance structures before signing the contract

Distinguish between transition phase and stability phase

– Define stability phase & criteria for different set of projects

Update the Scope of Work consistent with service delivery.

– Updation frequency will be greater than the normal BPO.


Service delivery

Emphasize consulting delivery model at the strategic level

– Focus on solution design

– Invest in developing newer knowledge products (Supply creates the demand!)

• Partnerships with specialized vendors may be necessary

• Solution design Centers/Centers of Excellence

• Learning academies

• Tie ups with academic institutions will become necessary

Right Recruitment is the key

– Knowing the DNA of skills sets is must

24 x 7 operation in KPO processes is not always desirable

– Single country multiple location service operations to multi-country can help

achieve this.

– Multi-Country operations & Global delivery model also paves way for stronger

BCP.


Where to draw the line?

Thank you