A Syntel publication featuring research from GartnerContentsFrom the Editors Desk2Competitive Landscape: Business Process Outsourcing, India3Syntels KPO Practice:A Flexible Approach14On the Horizon: IT-KPO Integration . . 17Value Study: Syntel Delivers a Truly Integrated IT and BPO Experience ... 18About Syntel20BPO Insights for Banking and Financial ServicesHelping Clients Leverage BPO to Optimize Operations

From the Editors Desk

Due to a slow down in the global economy, many traditional sources of profit in the Banking and Financial Services sector are vanishing. In addition, new regulatory imperatives like Basel II and Sarbanes-Oxley have required the industry to operate with greater transparency.

These economic and regulatory realities are forcing the financial services industry to seek sustainable fixed-cost reduction programs in non-core areas, facilitate compliance and improve data quality through centralized, standardized controls.

Syntel is helping some of the biggest names in the banking and investment industry achieve fixed-cost reductions and stay at the forefront of their business by delivering value that matters. Syntels personalized approach and ability to tailor cost reduction KPO programs is helping customers optimize their operations with efficient functionality and design.

The following pages will demonstrate Syntels ability to deliver value to customers to help them win in the global marketplace, from simple solutions to transformation process outsourcing. We hope you find the contents informative and useful.

Ravi VasantrajHead Knowledge Process Outsourcing Syntel

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9From the Gartner Files:Competitive Landscape: Business Process Outsourcing, India

Competitive Landscape: BusinessProcess Outsourcing, India

Indian business process outsourcing (BPO) providers have proved to be stiff competition to western BPO providers; they account for 5% of market revenue generated among the top 150 providers in 2008. These providers have had more success in labor-intensive processes, such as finance and accounting (F&A), contact centers and insurance claims processing. Correspondingly, less success has been achieved in human resources BPO because of this type of BPO being less about accessing lower-cost labor, and often constrained by the need to keep sensitive personal data in onshore administration centers. Indian BPO providers are swiftly evolving to balance exposure to vertical industries, currency and legislation issues.Their strategies include investing in onshore and nearshore delivery, and pioneering new area of analytics services or knowledge process outsourcing (KPO) where Indian BPO players are shining.

Key Findings Indian BPO providers focus on root cause analysis through Six Sigma and lean methodologies. Less reli- ance on costly additional consultants, at the front end of the deal, has proved very successful in winning deals. There are still no Indian vendors in the top 20 global BPO players. Half of the top 20 India-based BPO providers now operate local U.S. and European sales and delivery centers. Indian providers have had limited success in continental Europe. Wins have been based on investing in local European sales teams, building on existing IT clients, incorporating nearshore delivery if required, and focusing strongly on winning a marquee deal.

Recommendations For competitive intelligence managers: Study Indian BPO providers portfolios to identify which types of BPO or industries they will be prioritizing to win marquee deals in and hence will pursue a very aggressive bidding strat- egy. The absence of these domains in their portfolios is a leading indicator. For product marketing managers: Spend time investigat- ing what is in each BPO solution that has already been delivered, often much can be repurposed to classify areas of differentiation in terms of industry or process experience. Ensure that sales teams are well trained in the swiftly evolving BPO competitive landscape, which will differ by country and process type. For sales managers: Invest in dedicated industry-specific salespeople that truly understand the business process in that specific industry, and understand global delivery.

ANALYSISThe top 20 India-centric BPO providers, by revenue, will collectively triple in revenue size by 2012, via organic and inorganic growth.

Competitive Situation and TrendsThe BPO competitive landscape is dominated by category specialists, such as ADP in payroll or Broadview in payments. Only three vendors are in the top 10 BPO providers that service multiple types of BPO: Accenture, ACS and IBM. Since about 2002, however, when India-centric providers of BPO entered the market, their progress in labor-intensive BPO activities was slow to start; but recently, there has been marked acceleration. Although in 2002 there were few, if any, India-centric vendors in the top 150 providers, by the end of 2008, the top 20 India-centric BPO providers account for $4 billion in revenue. This represents 5% of the revenue of the top 150 BPO vendors, which was $80 billion in 2008. However, there are still no India-centric BPO providers in the top 20 BPO providers. We expect this to change because of economic pressures that are leading to demand for low-cost BPO, and will boost the India-centric providers revenue opportunities. Many Indian BPO providers established track record in delivering high-quality, lower cost solutions will fuel their growth.

It is increasingly difficult to categorize vendors as offshore or Indian. Several are registered for stock exchange purposes in Bermuda, and may also be listed on the London and/or New York Stock Exchanges, possibly with significant ownership by international private equity firms or they still have a majority stake owned by the U.S. or U.K. corporation that established them as a captive. To add to the confusion of whether vendors should be considered as Indian or offshore, many of these providers headquarters functions and CEOs are based in North America, even if the majority of the vendors BPO delivery operations are in India. To this end, we refer to India-centric BPO providers as Indian BPO providers.

To add to the terminology challenge, almost all major BPO service providers with offshore capabilities aim to have a major delivery hub located offshore in India, regardless of the providers origin, such as IBM acquiring Daksh, EDS

acquiring a stake in MphasiS, Capgemini acquiring Indigo and Accenture now having more BPO full-time employees (FTEs) outside North America than in it. This trend for Western services providers to buy offshore-centric services companies will continue through 2012, and is coupled with India-centric BPO providers balancing their portfolio with acquisitions of western BPO organizations and operations. Many India-headquartered BPO firms are concentrating their efforts on growing onshore U.S. and European services, while pursuing domestic Indian and Chinese services. Examples of growing an onshore strategy include HCL, Firstsource, Infosys and Aegis, which have bought existing onshore BPO providers or shared service (captive) centers of clients in onshore locations, such as the U.S. and U.K.

Indian BPO providers have had more success servicing English-speaking requirements, from North America and theU.K. In fact, North America has been the most successful sales location for Indian BPO providers, where the top-20 India-centric BPO providers generate about $2.1 billion revenue. Western Europe is growing fast, mostly in the U.K., and accounts for $1.4 billion in revenue for the top 20 Indian BPO providers.

It is not possible to size an offshore market because provider revenue is assigned by the region it is generated in, not by where it is delivered from. However, Gartner estimates about 15% of the total BPO market labor cost is delivered from a nearshore or offshore location, which is expected to double during the next three years to 30% of labor cost associated with BPO delivery.

From a vertical-market perspective, Indian BPO providers have also had more success in telecommunications, manufacturing, insurance and banking than in government and retail, which are not traditionally sectors that have been strong users of offshore outsourcing.

Indian BPO vendors have achieved growth rates between 12% and 200% (bearing in mind that some of them are starting from fairly small revenue in the first place). Gartner expects this increase in revenue to be maintained, with the BPO market share of Indian vendors expected to nearly double by 2010. This growth will be based on: Indian BPO vendors gaining increased acceptance asbeing able to reliably deliver services in a market Indian vendors continuing to make acquisitions of Europe-and North America-based shared-service centers. Many of these vendors are starting to grow revenue from

continental Europe and via partnerships with indigenous BPO providers; this will also help Indian BPO providers understand local business cultures.

Table 1 highlights the key competitive drivers and inhibitors of the global BPO industry.

Major Indian BPO PlayersGartner defines BPO as the delegation of one or more IT-intensive business processes to an external service provider, using a multiyear contract. Gartners definition of BPO, therefore, includes CRM, back-office processes of finance, accounting and human resources, supply chain processes, and vertical industry-specific activities, such as mortgage processing. The definition does not include outsourced contract manufacturing or IT-related support services such as IT help desks.

The criterion for being included in the group of leading Indian BPO vendors is that the vendor has significant headquarters operations in India and generated more than $5 million in sales from international BPO activities in 2008, or are significantly interesting up and coming players that are creating a buzz in the BPO marketplace. The 20 Indian BPO vendors fulfilled the criteria listed in Table 2.

From a vertical-market perspective, India-centric BPO providers have had mixed success across different industries. Table 3 shows the revenue for all types of back- and front- office, and industry-specific business processes outsourcing apportioned across eight main industry groupings. Vertical markets ranked in order of greatest success include: Banking, for contact centers, industry-specific operational support and F&A. Publicly referenceable users of India- centric BPO providers in this sector include Barclays, Westpac, Citigroup, IVO Bank and Wachovia. Telecommunications and utilities, primarily providing cus- tomer acquisition, billing support services and increas- ingly analytics services and F&A. Publicly referenceable users of India-centric BPO providers in this sector include BT, Bell Canada and Southern Water. Manufacturing providing customer help desk services and F&A. Publicly referenceable users of India-centric BPO providers in this sector include Philips, Ingram Micro and Alcoa. Insurance for claims processing and support and contact centers. Publicly referenceable users of India-centric BPO providers in this sector include Aviva and Allianz Life Insurance.

Table 1. Key Competitive Drivers and Inhibitors: A Structural Analysis of the Global BPO IndustryCompetitive Determinants in BPO IndustryAnalysis of Global BPO Industry

Threat of new entrants

The barriers to entry are moderate for labor-arbitrage BPO, which has allowed multiple new Indian BPOs to enter the market.The main barriers to entry include having:

Existing business process or IT services relationships Sales teams specializing in that industry with close client proximity inEurope and the U.S. Proprietary applications for that industry Cash to acquire captive or shared-service centers

Threat of substitutes

Gartner suggests that the threat of clients now building new captive centers is low, due to the costs involved but that over time the threat from SaaS (for applicable processes) is high.Potential substitutes include: Existing captive or shared-service centers BPU that heavily automate services and do not require as much laborarbitrage SaaS offerings, where process management remains internal

The power of suppliers

Gartner sees much of the BPO market as one with strong supplier power for established providers.Large North American and European BPO providers already have an extensive delivery network for many types of BPO and can therefore to make money and leverage these assets - be more discerning about the type of clients that would suit their portfolio to drive scale.

The power of buyers

Buyer power is relatively weak in BPO. Third-party advisors are worth influencing for exposure to more deals.Few markets have significant collaboration between buyers. Therefore, buyers are not benefiting from shared leverage. Many buyers are new to BPO, so they are limited in their ability to structure good win-win deals.

Competitive rivalry

Significant buyer confusion exists about who has a track record in what type of BPO. This has helped many providers get started in BPO.Rivalry in the BPO market is average in many types of BPO, such as CRM or F&A or HR, where roughly 12 players dominate each of these markets.

Source: Gartner (March 2009)Table 2. India-Centric Providers (in Alphabetical Order): BPO Revenue by Geography, 2008 (Millions of Dollars)India-Headquartered ProvidersWorldwide BPO Revenue 2008Asia/PacificEuropeNorth America

24/7 Customer86146111

3i Infotech124.244.2-80

Aditya Birla Minacs392427361

Aegis303.61353.6165

Cognizant320275

Compass BPO70.13.753.15

Firstsource36738100229

Genpact833100233500

HCL233.71.9173.658.2

iGate260026

Infosys BPO310.815.5158.5136.8

Integreon3531517

Patni Computer Systems602949

Quatrro5021335

Satyam150015

Syntel79.61524.140.5

Tata Consultancy Services3614.9188168.1

Tech Mahindra56.716.131.39.3

Wipro Technologies3329100223

WNS3662.9232.4130.7

Total4,070.60407.61,400.252,262.75

Note: Revenue totals are Gartner estimates for the year.

Source: Gartner (March 2009)

Table 3. India-Centric Providers (in Alphabetical Order): BPO Revenue by Vertical Industry, 2008 (Millions of Dollars)

BankingInsuranceHealth-careTelecom and UtilitiesServicesGovernmentManufacturingRetail and TravelOthers

24/7 Customer42422

3i Infotech64.5437.66.52.6

Aditya Birla Minacs748221125

Aegis6512389079145.6

Cognizant1022

Compass BPO1411

Firstsource84146115922

Genpact26980207435040

HCL6.423.6150.720.65.127.3

iGate1313

Infosys BPO55139711035.8

Integreon10520

Patni38622102

Quatrro704.13.519.80015.6

Satyam15

Syntel709.6

Tata Consultancy Services112.8122.82418.86.715.73930.2

Tech Mahindra56.7

Wipro Technologies70934766303347

WNS4134568488

Totals899.3531.4268.1741.3293.62937.8273.9123.2

Note: Revenue totals are Gartner estimates for the year.

Source: Gartner (March 2009)

Less success has been had in local and central government, which have not been major adopters, and in retail, which is a sector that has not traditionally been a strong user of IT or offshore outsourcing.

Few Indian service providers can publicly name even one client, although this has slightly improved in the last two years. Often, an end-user organization might have several major BPO contracts of which the ones serviced by European and North American BPO providers are in the public domain but not the ones from Indian BPO providers. Gartner recommends that Indian BPO providers use multiple

levers with existing and new clients to be able to reference their outsourcing contracts in public. This lack of publicly visible deals should not be allowed to camouflage the Indian BPO providers capabilities and their strong desire to grow.

In the media, India is most-often associated with call centers: consumer-facing, voice-related BPO services, which is the largest service offering, followed by industry-specific processes, such as claims processing (see Table 4). Other back-office processes are gaining ground, however, such as F&A and analytics services.

Table 4. India-Centric Providers (in Alphabetical Order): Global BPO Revenue by Offering, 2008 (Millions of Dollars)

Human ResourcesF&ACRMProcurementIndustry-Specific SolutionsAnalytics, KPO

24/7 Customer4442

3i Infotech28.5262620.16.217.4

Aditya Birla Minacs392

Aegis224.679

Cognizant71510

Compass BPO0.56.5

Firstsource367

Genpact375795923387

HCL58.63.2170.61.3

iGate26

Infosys BPO1065577154.817

Integron35

Patni17132010

Quatrro13.54.81516.7

Satyam15

Syntel79.6

Tata Consultancy Services5.522.772.531310.3

Tech Mahindra56.7

Wipro Technologies113521381154

WNS10010011650

Total72.5701.41,147.499.81,740.8308.7

Source: Gartner (March 2009)

Competitive Landscape: BusinessProcess Outsourcing, India

The Future of CompetitionIt is highly likely that many new competitors will emerge from India during the next few years. These competitors will likely be born from the large Indian conglomerates, as the barriers to entry have been moderate to low for many types of BPO. Contact centers and analytics services will likely see the highest growth have the lowest entry barriers because relatively little technical or specific process expertise is required. Therefore, Indian BPO providers will continue to aggressively bid and emerge in this type of BPO. These barriers will be kept relatively low for other types of BPO as prospective clients with IT relationships will look to Indian BPO players to balance their portfolio of bidders and eventual suppliers.

As Indian BPO vendors are still growing delivery networks and their client base, they have less supplier power. As a result, they will be in a position to spend cash to buy their way into markets. Indian BPO vendors have benefited from more-educated buyers that have studied the competitive landscape or used third-party advisors for support. There has been a perception that Indian BPO players were only in competition with each other as the low-cost option, but this is not the case.

To diminish the threat of substitutes, Indian BPO providers know that they are heavily dependent on labor arbitrage BPO and have chosen to compete by acquiring onshore delivery and investing in KPO services to maintain value-add beyond cost reduction.

The leading players in this market are reacting to these competitive conditions by continuing to seek rapid revenue growth, via acquiring shared-service centers and onshore BPO providers. This effort is likely to be successful and will support the forecast continued BPO growth through 2012.

Indian BPO providers have gained firm footholds in the U.K. and North American markets, particularly for contact center, F&A and industry-specific processes. They have found customers from there existing IT services client base. More interestingly, as in IT, many have chosen to use process excellence and innovative improvements via methodologies of lean and Six Sigma to show how they will deliver process improvements. The notion that providers can compete by offering high-quality and lowest-cost was disputed by academic theory, but, the analysis of the success of Indian BPO providers suggests that many of them have managed to do just that.

Competitive ProfilesThese profiles include eight of the leading 10 India-centric BPO providers, as ranked by Gartners revenue estimates generated in 2008. Also, two up and coming profiles of India-centric players were selected because of the highly interesting nature of their BPO portfolio. The profiles are presented in this section, in alphabetical order.

Aditya Birla MinacsOverview: Gartner estimates Aditya Birla Minacs worldwide BPO revenue in 2008 was $392 million. This was split among $4 million from Asia/Pacific, $27 million from Europe and $361 million from North America. Aditya Birla Minacs is a privately held BPO service provider with 13,000 employees. Aditya Birla Minacs is owned by the Aditya Birla Group, with Canadian private investment firm ReichmannHauer Capital Partners as a minority shareholder in the company. The Aditya Birla Group is a global conglomerate and one of the top-three business houses in India.

Client Profile: Gartner estimates Aditya Birla Minacs revenue was derived from $74 million in banking, $82 million in telecom and utilities, $211 million in manufacturing and $25 million in the others category. Gartner estimates that all of Aditya Birla Minacs revenue is generated from CRM service line. Minacs clients are largely U.S.-based, about 92% of its overall revenue comes from the U.S. and about 6% of it comes from Europe. Clients are largely in the contact center CRM and marketing solutions space primarily for the manufacturing industry.

Major Clients: Include Aditya Birla Minacs chose not to disclose specific client names.

General Product/Service Marketing Strategy: ABM primarily drives its experience and expertise in managing business process at every stage of customer relationship life cycle. It promotes and leverages its parent companys financial backing to market its services in the U.S.

How This Provider Competes: Aditya Birla Minacs focuses on limited set of vertical markets with laser focus on CRM offerings for clients primarily in the North American geography. ABM is rapidly building its presence in the European region. Minacs generally provides 20% to 40% in one-time savings through various process improvements over the life of the relationship.

Acquisitions Related to BPO From 2006: Transworks Information Services acquired Minacs Worldwide and renamed itself Aditya Birla Minacs.

AegisOverview: Aegis worldwide BPO revenue in 2008 is estimated at $303.6 million. This was split among $135 million from Asia/Pacific, $3.6 million from Europe and $165 million from North America. Aegis is a privately held Essar Group Enterprise. Essar Global Ltd. is a diversified business corporation with assets in the manufacturing and services sectors of steel, energy, power, communications, shipping ports and logistics, and construction. Aegis is a pure-play BPO company with no IT services offerings.

Client Profile: Gartner estimates that Aegis BPO revenue was derived from $65 million in banking, $12 million in insurance, $38 million in healthcare, $90 million in telecom and utilities, $79 million in manufacturing, $14 million in retail and travel, and $6 million in the others category. Gartner estimates this revenue was generated from the following service lines across all industries: $224.6 million CRM and$79 million from industry-specific solutions. Aegis revenue come from U.S. customers, and a very high proportion (44%) of its revenue comes from Asia/Pacific customers. However, it only has one customer in Asia/Pacific, which is understandably its captive business (business from Essar Group in India). Essar still has a way to go to make a mark in the European region.

Major Clients: Aegis chose not to disclose any of its client names, although its clients include some Fortune 500 companies.

General Product/Service Marketing Strategy: Aegis believes in customizing offerings to suit customer needs. Aegis targets a select set of vertical markets Telecom, banking and insurance, travel and retail with an anywhere/ any process approach to a comprehensive customer life cycle management service. The primary value promise is quality and lower risk through the strong financial backing of its parent organization.

How This Provider Competes: Aegis primary focus is BPO services for CRM and industry-specific offerings. Aegis is still in the process of building its presence in the European region. It currently has too lean a sales force in the U.S. and European region.

Acquisitions Related to BPO From 2006: People Support AOL India Bharti Tele-tech India Stesalit Global Vantedge Technion

GenpactOverview: Genpact is a publicly traded company (under the symbol G on the NYSE). The current ownership structure is General Electric (19%), General Atlantic Partners (24%), Oak Hill Capital (24%), others (10%) and public (23%).Gartner estimates worldwide BPO revenue in 2008 of $833 million, split among $100 million from Asia/Pacific, $233 million from Europe and $500 million from North America. Genpact does not disclose BPO revenue as distinct from its total revenue, which includes IT outsourcing (ITO); therefore, this is a Gartner estimate.

Client Profile: More Genpact BPO clients are from the U.S., which accounts for 60% of its overall BPO revenue, while 30% of BPO revenue comes from Europe. Clients are largely in the F&A and finance-industry-specific operation primarily for the banking and manufacturing sectors. Gartner estimates Genpact BPO revenue is derived from $269 million in banking, $80 million in insurance, $20 million in healthcare, $74 million in services, $350 million in

manufacturing, and $40 million in retail and travel. Gartner estimates this revenue is generated from the following service lines across all industries: $375 million in F&A, $79 million in CRM, $59 million in procurement, $233 million in industry-specific solutions, and $87 million in analytics.

Major Clients: Include GE Money, GSK, Kimberly Clark, Hyatt and Penske.

General Product/Service Marketing Strategy: Genpact leverages process skills, a global delivery footprint, technology and a 100% referenceable client base to enter into long-term strategic relationships with Global Fortune 1000 companies.

How This Provider Competes: Genpact focuses on its strong track record from supporting divisions of GE globally for many years. Genpact competes by becoming a strategic partner and being flexible and customer-centric to focus on delivering outcomes that are important for their clients business. It regards the use of Lean Six Sigma to deliver accuracy, and delivering operating excellence, by rapid escalation of exceptions and adherence to service-level agreements as table stakes. Customer satisfaction and making every client a reference is key to how this company competes.

Acquisitions Related to BPO From 2006: Creditek MoneyLine Lending Services ICE Consulting Services Axis Risk Consulting Services

HCL TechnologiesOverview: HCL BPO has estimated worldwide BPO revenue in 2008 of $233.7 million. This was split among $2 million from Asia/Pacific, $173.6 million from Europe and $58 million from North America. HCL BPO, a division of HCL Technologies, which is a publicly traded company, started its venture in 2001. HCL BPO grew 9% in 2008. It has a little over 11,000 FTEs operating out of India, the U.K. and theU.S. HCL BPO runs 21 delivery centers, out of which 11 are in Asia/Pacific, six in Europe and four in the U.S.Its IT services offerings include business and IT consultancy services, system integration, ITO, product support, and network outsourcing.

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11Client Profile: Gartner estimates HCL BPO revenue is derived from $6.4 million in banking, $23.6 million in insurance, $150.7 million in telecom and utilities, $20.9 million in services, $5.1 million in manufacturing, and$27.1 million in retail and travel. Gartner estimates that this revenue was generated from the following service lines across all industries: $58.6 million in F&A, $3 million in procurement, $170 million in industry-specific solutions and$1 million in analytics.

Major Clients: Include BT, Century, Macys, Safeway and Office Depot.

General Product/Service Marketing Strategy: The primary value promise is integrated service offerings through its IT, infrastructure and BPO service offerings. Integrated service offerings promise to bring in benefits such as reduced time to market through reduced process duration and reduced costs. HCL heavily markets its Employee First program by highlighting the importance the company gives to its employees.

How This Provider Competes: HCLs offerings capabilities are limited to industry-specific solutions that are highly transactional in nature, and to customer contact services. It has made acquisitions to boost BPO capabilities through its acquisition of the insurance division of Liberata and the telecom expense management operations of Control Point. Expect this strategy of market entry via competition to continue. HCL has not yet been successful in offering HR or CRM BPO. The company has built up sizeable sales forces in U.S. and Europe.

Acquisitions Related to BPO From 2006: HCL BPO Acquired Control Point Solutions, a U.S.-based telecom solutions provider. HCL Technologies acquired Liberata Financial Services, a leading U.K.-based BPO provider.

Infosys BPOOverview: Infosys is a publicly traded IT services and BPO provider headquartered in Bangalore. Infosys entered the BPO market in 2002 under the brand of Progeon, which in 2006 was rebranded as Infosys BPO. Infosys operates in more than 11 onshore, offshore and nearshore BPO delivery locations, with more than 17,000 BPO FTEs. Estimated worldwide BPO revenue in 2008 is $310 million. Gartner estimates that this was split among $15.5 million from Asia/ Pacific, $158.5 million from Europe and $136.8 million from North America.

Client Profile: Infosys BPOs clients are equally spread in the U.S. and European region with revenue share of 44% and 50%, respectively. Majority of its BPO client concentration, by revenue, is in manufacturing, telecom and utilities sector. Industry-specific BPO solutions, F&A and CRM services form the bulk of its client offerings. Gartner estimates Infosys BPO revenue were derived from $55 million in banking, $13 million in insurance, $97 million in telecom, $110 million in manufacturing, and $35 million from the other sectors. Gartner estimates this revenue is generated from the following service lines across all industries: $10 million in HR, $65 million in F&A, $57 million in CRM, $7 million in procurement, $95 million in industry-specific solutions and$17 million in analytics.

Major Clients: Include Philips, Level 3, NY Times, Alcoa, Ingram Micro and Cisco.

General Product/Service Marketing Strategy: Infosys BPO goes to market with an integrated IT and BPO solutions approach. It has developed a robust network of global delivery centers that it markets heavily. Infosys demonstrates flexibility in customized pricing models such as transaction-based, gain share and outcome-based pricing models. Infosys also has a high degree of focus on solutions across services such as order management, F&A and HRO, in addition to point solutions such as Infosys Contract Administration Platform (ICAP) for the legal process outsourcing (LPO) markets.

How This Provider Competes: Infosys has maintained a focused approach to BPO, specializing primarily in F&A and industry-specific solutions. It competes on promoting strong transition processes; however, it needs a longer track record on post-transition. It is still quite new in KPO services, and it will take time for the company to build it up to scale.

Acquisitions Related to BPO From 2006: Royal Philips Electronics Shared Services Centre for F&A and sourcing and procurement at Poland, Thailand and India was the only BPO acquisition since 2006.

Patni Computer SystemsOverview: Patni is a publicly held company offering a wide range of IT and BPO services. Its overall BPO revenue grew by 38.7% in 2008. The company has a few more than 3,500 FTEs. Patni is estimated by Gartner to have a worldwide BPO revenue in 2008 of $60 million. Gartner estimates that this was split among $2 million from Asia/Pacific, $9 million from Europe and $49 million from North America.

Client Profile: Patni targets Tier 1, 2 and 3 companies in various vertical markets. Patnis BPO clients are in a diverse mix of vertical industries, which include $44 million in banking and insurance, $2 million in healthcare, $2 million in telecom and utilities, $10 million in manufacturing, and $2 million in retail and travel. Types of BPO activity include analytics at$10 million, HR at $17 million, F&A at $13 million, and $20 million from industry-specific BPO deals.

Major Clients: Patni chose not to disclose its client names. Patnis clients are primarily: Fortune 500 HR consulting company Large U.S. health insurance carrier World leader in information storage management Fortune 500 chemical manufacturing company Fortune 100 mobile handset manufacturer

General Product/Service Marketing Strategy: The primary value promise is integrated BPO and IT solution to address client requirements holistically. Patni promotes a transformation-led strategy that includes centralization and standardization capabilities with operating model redesign. Patni heavily markets its ability to offer innovative commercial models such as financial re-engineering and accelerated cost transformation (ACT NOW).

How This Provider Competes: Patni is heavily dependent on its integrated IT-BPO go-to-market approach. Over time, this will be a good strategy for Patni; however, in the short term it makes it hard for the company to break into new markets or shine in other types of BPO.

Acquisitions Related to BPO From 2006: Patni has made two acquisitions in the last 18 months; they were in the area of life sciences and telecom: Taratec Development Logan Orviss International

QuatrroOverview: Quatrro is a pure-play privately held BPO company. The company is promoted by Raman Roy, the found of Spectramind, which was acquired by Wipro. Quatrro BPO Solutions was established in January 2006. In just two years, Quatrro has quickly moved to a $50 million company through organic and inorganic activity. It has 2,750 FTEs based in 11 delivery locations. Quattro is estimated to have a worldwide BPO revenue in 2008 of $50 million.

Gartner estimates that this was split among $2.1 million from Asia/Pacific, $13 million from Europe and $35 million from North America.

Client Profile: Clients are in a diverse mix of vertical markets, which include $7.3 million in banking, $4.1 million in healthcare, $3.5 million in telecom and utilities, $19.8 million in services, and $15.6 million in retail and travel. Types of BPO activities show an almost equal mix: analytics at $16.8 million, F&A at $13.6 million, CRM at $4.8 million and industry-specific BPO deals at $15 million.

Major Clients: Quatrro chose not to disclose any of its client names. Among its major clients are: a top-10 international bank, top-10 consulting and technology services company, a leading online and console game publisher, and a leading entertainment company.

General Product/Service Marketing Strategy: Quatrros go-to-market messages are focused on differentiation and lowering buyers cost by providing domain-backed platform- based solutions. Focus is on creating significant additional value for customers through innovative solutions with a combination of tools, platforms and business processes.

Quatrro also targets small or midsize business (SMB) clients through customizable bundled (platform-based) solutions. An example is the Legal Services Platform (LSP), which is aimed at automating the legal work request process.

How This Provider Competes: Quatrro is very new in the BPO market. It is aiming to differentiate itself servicing niche BPO areas, such as risk and fraud management, knowledge and information research services, LPO, interactive entertainment, and end-to-end mortgage solutions. Essentially, this refers to BPO services across the board that are still in their nascent or emerging stage. As well as focusing on niche areas, Quatrro has built a large sales force in the U.S. and India.

Acquisitions Related to BPO From 2006: Quatrro has made four major acquisitions and acquired stakes in several other companies to expand its offerings, including: ANNIK Systems To offer high-end consumer analytics services such as automated reporting systems and data warehousing, it acquired a stake in this business Flextronics BPO

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13 SCOPE E-Knowledge Services Private limited Preferred Financial Group The ePower mortgage tech- nology platform and onshore/offshore loan processing operations RSM McGladrey FPO A one-stop platform-based ser- vice of F&A outsourcing in the midmarket Babel Media For outsourced services in global videogames and interactive entertainment industries

Tata Consultancy ServicesOverview: Tata Consultancy Services (TCS) is a part of the Tata Group, which was established in 1968 and is a publicly traded company with 76% (as of December 2007) holding with the promoters. TCSs overall revenue was $ 5.6 billion in fiscal year ending March 2008. Its IT services offerings include business and IT consultancy services, system integration, ITO, product support, and network outsourcing. TCS had an estimated worldwide BPO revenue in 2008 of $361 million. This was split among $4.9 million in Asia/ Pacific, $188 million from Europe and $168.1 million from North America.

TCS focused on BPO as a business since 2004 after it realigned its BPO business portfolio and merged its joint ventures/subsidiaries. The BPO revenue contributed to about 6% of the TCSrevenue The BPO services are being offered by a little more than 13,500 employees, with an India employee base of more than 9,000 employees as of the third quarter of 2008. In addition to the above, TCS recently acquired Citigroup Global Services (CGSL), with an employee base of more than 12,000 FTEs that strengthen its ability to cross-sell to TCSs banking and financial service sector client rela- tionships.

Client Profile: TCS has more than 85 BPO customers globally. Gartner estimates TCSs BPO revenue is derived from $113 million in banking, $122 million in insurance,$24 million in healthcare, $19 million in telecom and utilities, $6.7 million in services, $1 million in government,$5.7 million in manufacturing, and $39 million in retail and travel. Gartner estimates this revenue is generated from the following service lines across all industries: $5.5 million in HR, $22.7 million in F&A, $7 million in CRM, $2.5 million in procurement, $313 million in industry-specific solutions, and$10.3 million in analytics. TCS is primarily entrenched in the midoffice industry-specific processes, as well as the back- office shared services.

Major Clients: Include Citigroup, The Nielsen Co. and Pearl Assurance, U.K.

General Product/Service Marketing Strategy: TCS goes to market with its value promise of certainty and consistency. Certain propositions are substantiated with propositions of on-time, within budget and quality delivery. TCS BPO primarily markets its ability to undertake core business process by mimicking itself to be a clients virtual office.

TCS is also propagating certain services in a platform model. In this model, TCS owns and hosts the IT platform on which the BPO service is provided. TCS provides this service for four areas.

How This Provider Competes: TCS engages at a business unit level, and at level that is lower than the corporate level. TCS primarily competes on price and delivery of certain propositions. TCS BPO unit has grown quickly, but it is primarily inorganic growth, acquiring various captive centers. Also TCSs large customers are primarily in the banking and insurance domain.

Acquisitions Related to BPO From 2006: Comicrom in 2006 Citigroup Global Services, which has been rebranded as TCS Eserve following its acquisition in October 2008. This was known as Citigroup Global Services Ltd. (CGSL), the India-based captive BPO arm of Citi for all cash consider- ation of approximately $505 million.

Wipro BPOOverview: Wipro BPO is the BPO division of Wipro Technologies, a publicly traded company. Wipro provides a broad spectrum of IT services and BPO services across CRM, back-office transaction processing, industry-specific solutions and BPO consulting. Wipro BPO had worldwide BPO revenue in 2008 of $332 million. This was split among$9 million from the Asia/Pacific $100 million from Europe and$223 million from North America.

Client Profile: Gartner estimates Wipro BPO revenue were derived from $70 million in banking and securities, $9 million in insurance, $34 million in healthcare, $76 million in telecom and utilities, $63 million services, $30 million in manufacturing, and $30 million in retail and travel. Gartner estimates this revenue is generated from the following service lines across all industries: $11 million in HR, $35 million in

F&A, $213 million in CRM, $8 million in procurement and$45.2 million in analytics, with $54 million in industry-specific processes. Europe is its highest growth region.

Major Clients: Wipro BPO chose not disclose any specific client names. Its major clients include: Fortune 100 healthcare company (U.S.), one of theworlds largest investment banks Worlds largest airline company Large global computer hardware manufacturer

General Product/Service Marketing Strategy: Wipro BPO primarily hinges its marketing on its strict adherence to quality and process centricity that delivers process optimization and re-engineering. Wipro BPO has developed strength in service delivery for transaction processes.

How This Provider Competes: Wipro leverages its global delivery model and its wide spectrum of offerings to it large base of IT clients. Wipro BPO, has built strong skills in telecommunications, but is still building capability for other industry-specific BPO processes such as banking. However, Wipro could improve its ability to leverage its full portfolio of skills, such as linking its IT skills with services in BPO offerings.

Acquisitions Related to BPO From 2006: Infocrossing Wipro Gallagher Solutions

WNS Global ServicesOverview: WNS is a public company traded in NYSE since 2006. With $366 million revenue in 2008, less repair payments, it grew 31%. It has a little over 21,000 FTEs, with the bulk of it based out of the Asia/Pacific region. It also offers IT and business consulting services to complement its range of BPO offerings. Gartner estimates worldwide BPO revenue in 2008 of $366 million. Gartner estimates that this was split among $2.8 million from Asia/Pacific, $232.4 million from Europe and $130.7 million from North America.

Client Profile: WNS has built a strong portfolio of offerings and is well-placed for expansion into Continental Europe. It generates close to 64% of its revenue from Europe and 35% from the U.S. Banking and insurance clients account for almost half of its total revenue and retail/travel accounts for a significant portion. WNS has close to 250 clients globally,

including a global gaming and entertainment company, a Financial Times Stock Exchange 100 utility company, a European retail chain, and a leading North American airline. Aviva accounts for about 25% of its revenue. Gartner estimates WNS BPO revenue was derived from $134 million in insurance, $56 million in services, $84 million in manufacturing related engineering services, and $88 million in retail and travel. Gartner estimates this revenue was generated from the following service lines across all industries: $100 million in F&A, $100 million in CRM, $116 million in industry-specific solutions, and $50 million in analytics.

Major Clients: Include Aviva, BA, Travelocity and Centrica.

General Product/Service Marketing Strategy: WNS positions itself as a specialist in Global BPO with deep domain knowledge and process expertise. Its key value promise is its nimbleness to deliver and adapt to client needs, as well as capable of executing complex business processes. Targets clients with more than $1 billion in revenue primarily in the U.S., U.K., Holland, Scandinavia and Asia.

How This Provider Competes: WNS is primarily a BPO provider; its competitive strategy is to strengthen its ITO skills to fulfill a need for increased automation in BPO deals. It is off to a great start with the acquisition of BizAps. WNS has also only recently started using Romania as an Eastern European delivery location, to complement its Philippine, Indian and Sri Lankan delivery centers.

Acquisitions Related to BPO From 2006: Marketics Research and analytics specialists 24/7 Motor claims process expert Aviva Global Services Back-to-back outsourcing deal BizAps F&A ERP optimization specialists XiBuy P-Card specialists

References and MethodologyThe research for this report was conducted using existing Gartner research, complemented by an extensive primary research survey with leading BPO providers carried out during the first quarter of 2009.

Gartner Dataquest Research Note G00166116, Cathy Tornbohm, Arup Roy, 31 March 2009

Syntels KPO Practice:A Flexible Approach

OverviewSyntels Knowledge Process Outsourcing (KPO) for the Banking and Financial Services sector is a portfolio of application management and outsourcing solutions for select vertical business processes common among capital market firms.

With broad capital markets experience, operational scale, and outsourcing specialty to provide the right mix of outsourcing and value add services, Syntel delivers solutions for middle and back office which offer operational efficiencies and competitive advantages through their functionality and design.

Syntels unique approach can bring down your KPO costs through: Standardization and functionalization of processes Best practice implementation Six Sigma methodologies to reduce errors Continuous improvement initiatives Business Process Re-engineering (BPR)

Syntel shares its experience with retail and wholesale banks, custodians, broker-dealers, trust companies, hedge fund administrators, benefit administration providers, transfer agencies and foundations.

We are focused on industry-standard processes that offer inherent economies of scale, including: Corporate Actions Management Fund Administration Reconciliation Trade Processing

We have additional experience in: Accounting Services Compliance Services Custody Services Reporting Services Research and Analytics

Our services can be as simple as system integration or as transformational as providing ongoing services and associated business process outsourcing for functions across several areas.

Lean Six Sigma Project on Manual Trade Processing Delivers $1 Million Cost ReductionSyntel put its Six Sigma approach to work on a manual trade process that it handles for a customer. The team introduced a centralized knowledge database related to all updates and made instructions available to all staff members. The results were dramatic and included:54% reduction in processing time46% reduction in error rates25% increase in productivityAnnual effective cost reduction of $1 millionInnovation in Corporate Action Processing Delivers ValueSyntel demonstrated its innovation capabilities with the creation of an automated tool to identify corporate actions events due for the day. The results included:Accuracy increased to 99.99%Reduced turn around time by 20%Improved productivity by 42%

Syntels KPO Service Span

Source Syntel

GLOBAL REACH: Syntel delivers KPO services around the world

United States Corporate Actions DerivativesHedge Fund Administration Mutual Fund Accounting Pension Fund Accounting Pricing and Valuation ReconciliationStock Lending Transfer Agency

Canada

Compliance Monitoring Corporate Actions Equity ResearchHedge Fund Administration Performance and Attribution

UK

Compliance Monitoring Corporate Actions Custody ReconciliationHedge Fund Administration Pension Fund Accounting Performance Attribution Trade ProcessingTransfer Agency

Ireland

Hedge Fund Administration ReconciliationTA

Trade Processing

Luxembourg

Hedge Fund AdministrationReconciliation Trade Processing

Germany Reconciliation Trade Processing

France

Reconciliation

Singapore and Hong KongTrade Processing

India

Brokerage Consumer Finance Life Insurance

Japan

Corporate Actions Reconciliation Trade Processing

Australia Reconciliation Trade Processing

The Syntel DifferenceAs a leader in capital markets KPO, Syntel is the largest third- party provider of investment management administration in India. We have the global capability and scale to deliver leading-edge quality service, all at lower costs than any single firm can achieve on its own.

Our clients can achieve 30-40 percent reduction in the costs associated with data collection, cleansing and distribution through the economies of a shared service, while reducing operational risk and improving compliance controls, data quality and service levels.

For example, Syntel now manages the data acquisition group for over 10,000 funds at one of the largest investment managers in the United States. For the three processes under management, we were able to reduce operational costs by 40 percent while improving overall service levels at the same time.

Our management team has an average of 10 years hands- on investment systems and operations experience, which helps to ensures both a smooth and seamless process migration as well as ongoing transformation of the process through rigorous analysis and performance metrics.

Source Syntel

One Stop Shop for Capital Markets

Source Syntel

Quality Improvement at Trade ProcessingSyntel resolved a trade processing error type by introducing an online broker database and creating a quality checklist for trades processed. This delivered:Reduced error rate by 57%Increased productivity by 25%

On the Horizon:IT-KPO Integration

Value in Integration of ITO and KPOShorter Testing CyclesShortened Feedback PeriodsShorter Enhancement CyclesSingle Platform Cycle ManagementClient Role Reduced to Control and ApprovalFinding New ValueKnowledge Process Outsourcing (KPO) and Business Process Outsourcing (BPO) has come of age. What began as a cost-cutting measure has evolved into a means of increasing a companys business value. Handing non- core business processes off to experts not only delivers increased efficiencies, it delivers the potential for improved performance. The key is combining the right people, processes, and technologies to gain maximum efficiency and achieve competitive advantage.

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17Syntel has combined its IT outsourcing expertise with its business process outsourcing service to deliver a unique model. Because Syntel is primarily an IT organization with extensive experience in software development and processes, we quickly automate and digitize your processes. For instance, we develop online tools to help reduce manual labor, which helps increase productivity and improve quality. Because Syntel provides all necessary services, you shed the burden of managing multiple vendors.

Our global delivery-based engagement model even incorporates disaster recovery and business continuity plans to address disasters that occur at the global level. And because Syntel is a U.S.-based company, customers can be assured projects are managed according to U.S. standards, in compliance with U.S. laws.

Syntel takes a straightforward approach to KPO, adding a continuous improvement feedback loop to ensure upgraded performance into the long term.

Syntels end-to-end KPO solution includes: Comprehensive Portfolio Assessment Tool to deter- mine what can be outsourced, where they should be done, and the optimal business arrangement Six Sigma Based Transition and Change Management Methodology, including diligence, transition plan, knowl- edge transfer, ramp up and ongoing change management Delivery Framework with sample SLAs (accuracy, adher- ence to deadlines, response time, etc.) Baseline Project Plan Metrics highlighting significant cost savings from year one Year-Over-Year Productivity Savings Guarantees

Source Syntel

Value Study: Syntel Delivers a Truly Integrated IT and BPO Experience

Value Improvements: $6 Million SavedSyntel delivered Investment Manager Reconciliation efficiency improvement of 29%, equivalent to savings of$6 million over the span of the engagement, significantly over and above the cost arbitrage savings.The savings were achieved through:IMPROVED DATA QUALITY through data acquisition automation and implementation of data validation, scrubbing and cleansing initiativesINCREASED AUTOMATION with implementation of automated reconciliation platform which improved auto match rates from 65% to 90% with enhance- ments to the rules engineInitial Phase of a Growing EngagementSyntel worked with a leading custodian bank to help it successfully launch and implement a global delivery strategy. The engagement began in 2003 with the migration of a process for monthly reconciliation of fixed income securities funds. The business process involves: Receiving daily/monthly statements from over 90Investment Managers/Custodian Banks Using various tools for cash, assets and accruals recon- ciliation Troubleshooting and reconciling unmatched transactions Preparing and sending reconciliation reports to clients Matching exceptions escalated to client personnel whoinvestigates and passes entries to match

The process was quite challenging with substantial fluctuations in data volumes and many modes of data receipt (hard copy, fax, e-mail, web download).

Transition ManagementSyntel began by implementing a pilot that focused on timely processing of monthly reconciliations without compromising accuracy. The transition management included: Due Diligence conducted by Syntel at the banks site todevelop a solid transition plan. Transition Plan including pilot production of accounts before moving into production, as-is migration of pro- cesses, parallel processing, and ramp-up divided into multiple tiers based on account complexity. Knowledge Transfer using a train the trainer approach at the banks site. The Syntel team documented the process (no documentation existed) and developed tools to moni- tor performance on a daily basis. Upon the successful completion of their training, the offshore team returned to Syntels offshore facility, where they trained the next group of employees and began the offshore pilot. Parallel Processing for each account for one month before going live. The Syntel offshore teams output was verified against the client output and signed off by the client in order to move into production. Volume Ramp-up accomplished in multiple tiers over eight months for the 1,200 accounts; each tier had increasing complexity for processing and tighter deadlines.

Marrying IT and Business ProcessAfter the reconciliation process was migrated to Syntel in an as is state, Syntel began working to improve its quality and efficiency. The team completely revamped the technology used, including the core applications, workflow automation, collaborative tools, and project management tools. This included standardizing and automating the capture of incoming feeds, a key challenge in the process.

The combined process and technology now deliver continuous monitoring and better controls, requiring signoffs at key process points.

The bank was so impressed with the automation development that they gave Syntel full responsibility for maintaining and enhancing the reconciliation applications.

Expanded ScopeThe success of the pilot and the initial engagement led the bank to expand the engagement to include daily reconciliation more than doubling the team size to 135. This increase in scope was successfully implemented in just under four weeks!

In addition, higher end jobs like research and resolution of exception items were also transitioned to the Syntel team. And, new accounts are now sent directly to Syntel, bypassing the previous transition stage onsite.

Value Improvements: Fund Accounting Goes GreenSyntel teams reduced the paper consumption in a Fund Accounting process by 90% at one location and by 65% at a second location. This yields an annual reduction of 800,000 sheets of paper, equivalent to saving around 300 trees annually!ResultsToday, Syntel handles more than 1,300 funds for monthly reconciliation and 1,100 funds for daily reconciliation on a 24x7 basis, meeting and exceeding both quality and service level benchmarks including: Accuracy greater than 97% (monthly) and 99.5%(daily) Adherence to deadlines greater than 99% Response to queries 24 hours or less

In addition to improved quality, reduced turnaround time, and lower overall operating costs, the banks resources are freed from these non-core activities and are now focused on scouting new business!

Source Syntel

BPO Insights is published by Syntel. Editorial supplied by Syntel is independent of Gartner analysis. All Gartner research is 2009 by Gartner, Inc. and/or its Affiliates. All rights reserved. All Gartner materials are used with Gartners permission and in no way does the use or publication of Gartner research indicate Gartners endorsement of Syntels products and/or strategies. Reproduction and distribution of this publication in any form without prior written permission is forbidden. The information contained herein has been obtained from sources believed to be reliable. Gartner disclaims all warranties as to the accuracy, completeness or adequacy of such information. Gartner shall have no liability for errors, omissions or inadequacies in the information contained herein or for interpretations thereof. The reader assumes sole responsibility for the selection of these materials to achieve its intended results. The opinions expressed herein are subject to change without notice.

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ABOUT SYNTELSyntel (NASDAQ: SYNT) is a leading global provider of integrated information technology and Knowledge Process Outsourcing (KPO) solutions spanning the entire lifecycle of business and information systems and processes. The Company is driven by its mission to create new opportunities for clients by harnessing the passion, talent and innovation of Syntel employees worldwide.

Syntel leverages dedicated Centers of Excellence, a flexible Global Delivery Model, and a strong track record of building collaborative client partnerships to create sustainable business advantage for Global 2000 organizations. And there is no greater testimony to the value of Syntels services than customer loyalty a high percentage of Syntels revenues are derived from repeat and referred customers.

Syntel is a financially stable provider, with significant cash/short term investments, strong operating cash, and zero debt. It was also recently named one of the 50 Best Managed Global Outsourcing Vendors by The Black Book of Outsourcing. Syntel was also included in the 2008 FinTech 100, an annual international listing of the top technology vendors delivering solutions to the financial services industry, as compiled by American Banker and Financial Insights. Syntel jumped seven spots to rank 40th on the list, which was chosen from a pool of more than 400 technology providers serving the financial services industry. Syntels climb over last years FinTech 100 ranking was driven by an expanding client base, new service offerings, and a rapidly-growing KPO practice for financial services.

SYNTEL FAST FACTSNumber of employees: 12,300+Vertical practices: Financial Services/Banking, Healthcare and Life Sciences, Insurance, Logistics, Manufacturing, Retail, TelecomCenters of Excellence: Applications Management, Architecture, Demand Management, Migration, Remote Infrastructure Management, TestingQuality Certifications: ISO 27001, SEI CMMI Level 5, ISO 9001:2000, Project Management Institute (PMI)SYNTEL BANKING AND FINANCIAL SERVICES PRACTICE FAST FACTS

Number of employees: ITO: 4,000+ with 15,000+ person years industry experience. KPO: 5,000+ capital markets professionalsAlliances: SmartStream, GoldenSource, ThomsonReutersCenters of Excellence: Cards and Payments, Banking, Capital Markets, KPO and Healthcare/Financial Services IntegrationRevenues: 48% of Syntels IT revenues are derived from this industry, with over one-half of the projects executed on a fixed price basisCustomers: Fortune 50 Financial Services Organization and one of the largest issuers of Credit Cards, Top 5 U.S. Bank, One of the largest Gift Card Issuers and Payment Processors, One of the largest Global CustodiansSolutions

Banking & Financial Services Treasury & Cash Management Trade Finance Lending/Leasing & Mortgages Payment Processing Wealth Management Medical Banking Private Banking Investment Banking & Advisory Insurance Agency Risk & Compliance

Capital Markets Consulting Technology Business Application Services Product Based Services Custom Solutions Operations Servicing

Cards & Payments Issuer Acquirer Association Risk, Fraud, Compliance Emerging Payment

Learn more at www.syntelinc.com