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November 27, 2015
Evolving from process excellence to
innovation: Supporting digital agenda
Proprietary & Confidential. © 2015, Everest Global, Inc. 2
Everest Group is a leading global services research
and advisory firm
Range of services
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More than 20 years of experience
advising Global 1000
Recognized for positioning clients for
the next generation of global
services − combination of deep
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Proprietary & Confidential. © 2015, Everest Global, Inc. 3
Innovation and new
products/services
Revenue streams
that are significant
contributors to
enterprise top-line
Global leaders for
the enterprise
While process excellence is an imperative, mature GICs have
evolved to deliver multiple types of additional value for the
enterprise
Prove the concept
Cost arbitrage and
mature delivery
Business impact and
thought leadership
Competitive advantage
for the enterprise
Teams for select
anchor functions
Multiple pilots and
transitions
Hi-quality delivery
Process efficiency
Capacity
augmentation
Transformational
improvements
High skill capabilities
Vendor management
Enhanced customer
experience
Low cost set-up
Scaled internal
provider
Value addition
partner
Strategic entity
driving innovation
2
1
3
4
Key focus
Value
drivers
Source: Everest Group (2014). Originally developed as part of the NASSCOM GIC value addition study (2013) by McKinsey & Company
Stage 1
Stage 2
Stage 3
Stage 4
Proprietary & Confidential. © 2015, Everest Global, Inc. 4
As part of this evolution, GICs are increasingly supporting the
enterprise’s digital agenda in multiple segments
Social & interactive Mobility Analytics
Cloud Robotics Process
Automation
Others
Proprietary & Confidential. © 2015, Everest Global, Inc. 5
Decrypting Digital | Services within segments
Digital segments Services
Social &
Interactive
Social media monitoring
Social strategy and consulting
Social application development (front-end)
Social content and web development
Social analytics
Others (e.g., social commerce and content, social media
marketing, digital marketing platforms)
Mobility
Mobility testing
Mobility strategy, consulting and platform development
Mobile device management: MDM software management,
network management, security management
Mobile applications development and maintenance
Others (e.g., API management, mobility UX design,
connected device engineering / embedded software)
Analytics1
Core analytics (industry standard analytics tools such as
SAS, SPSS)
Data architecture and management: Data architecture,
master data management, data migration
Data visualization and visualization implementation
Big data analytics and consulting
Analytics platform implementation
Cloud
Application development, migration, and deployment:
Developing "green-field" apps with cloud features, migration
of apps to cloud platform / implementation, customization,
and integration of cloud apps
Cloud consulting/ advisory services
Infrastructure build: Designing and building cloud
infrastructure/ customization and implementation
Infrastructure management and orchestration: Management
of cloud assets, lights-on/helpdesk, orchestration, and other
related activities
Robotics
Process
Automation
Solutions which replace human action at various points of a
business process
Others (e.g., business process management solutions,
workflow solutions)
Intelligent RPA solutions (Artificial intelligence): Solutions
with in-built learning capabilities which can be leveraged to
handle judgment-oriented tasks with capacity to generate
and store data as part of their machine learning process
Miscellaneous
Internet of Things (IoT): Smart devices and sensors, M2M
communication, network management
Cybersecurity
1 Traditional business intelligence and data warehousing excluded from definition of digital used in the research
Proprietary & Confidential. © 2015, Everest Global, Inc. 6
GICs are well-poised to support the enterprise for
digital services
Why are GICs well positioned for this?
Established foundation with significant talent and expertise
Preference to use the GIC model given criticality of digital services
Strong integration with the core business
Increased endorsement from the parent
Proprietary & Confidential. © 2015, Everest Global, Inc. 7
Service offering evolution
Emerging Rapid growth Established
Imp
act
cre
ate
d t
ill d
ate
Mobility
RPA
Social &
Interactive
Cloud
Analytics is the most evolved digital segment; most
other segments are in initial-mid stages of evolution
Analytics
Service across entire cloud stack
Focused on “lift and shift” till date
Increasing focus on ground up
development and architecture work
Multiple GICs with scaled operations
High level of ownership within the GICs
Evidence of data scientists and machine learning
scientists being hired
Adoption across most industries
Focus largely on testing services
Device management and
platform development to be next
areas of focus Evolving area with low ownership currently
Typically leveraged for monitoring/listening
Limited evidences of GICs driving social strategy
Rapid growth, especially in BPS focused GICs
Focus on automation of high-volume, repeatable work
Proprietary & Confidential. © 2015, Everest Global, Inc. 8
Digital segments
Delivery capabilities across industry verticals
BFSI Product & Technology MDR
Social &
interactive
Mobility
Analytics
Cloud
RPA
There are significant variations in GICs’ digital delivery
capabilities across industry verticals
High Medium Low
Proprietary & Confidential. © 2015, Everest Global, Inc. 9
While GICs deliver different types of analytics services, there
is increasing shift towards work that supports top-line growth
GIC analytics market by category of analytics services
2014; Percentage of FTEs
40-45%
20-25%
30-35%
BFSI CPG and retail
Technology
Market intelligence and reporting
Cost reduction and risk management
Topline growth
Global GIC Market
Source: Interview with market participants, Everest Group (2015)
Proprietary & Confidential. © 2015, Everest Global, Inc. 10
Organization Enablers Innovation driven by the GIC
GIC of a leading
U.S. computer
technology
company
Global ownership for
analytics
Enhanced focus on
hiring and training
data scientists /
decision scientists
Trust relationship with
enterprise based on
regular alignment
Enhanced customer experience by predicting
need of device maintenance and support
before an issue arises
– Blueprinting layout plan to install sensors on
products shipped
– Real time data analysis and pattern
recognition to predict possibility of need of
maintenance or replacement
Enhanced customer experience and increased
revenue potential by real time modification of
website to highlight products which the
customer is most likely to choose
GIC of a leading
financial services
company
Access to analytics
talent, which is
scarce in source
markets (UK)
Alignment with
enterprise
Increased product revenue by 17% through
analytics on product positioning. Analytics
helped refine market share, pricing and product
positioning
Success metrics of the GIC’s analytics team
linked to product revenue growth
Analytics-driven innovation | Case examples
Proprietary & Confidential. © 2015, Everest Global, Inc. 11
Robotic Process Automation (RPA) is a key priority for GICs,
driven by the potential for high value creation at low risk
High value
Low risk
2. Better
service
delivery &
managea-
bility
1. Cost reduction
3. Quicker
time-to-
value
realization
4. Non-invasive 5. Easier
remediation
Better quality, speed,
governance, security,
and business continuity
Amenable to pilot
Quick implementation
Quick recovery of investment
Non-invasive access to
underlying systems Simpler configuration controls
Easier roll-back
Cost reduction of 20-70%
(dependent on the
process and existing
delivery location)
Proprietary & Confidential. © 2015, Everest Global, Inc. 12
Best-in-class GICs leverage alternative ecosystem
partnerships to increase their impact delivered in digital
Partnership with start-ups
Help drive innovation and speed
to market, foster cultural change
Typical collaboration areas
include
– Technology: Mobile apps, IoT,
security
– Analytics: Search, social
media and big-data analytics,
e-commerce
– Operations: Automation, HR
(e.g., employee engagement)
Multiple models to partner with
start-ups
Collaboration with vendors
Collaboration with specialized
technology vendors and
traditional service providers
(e.g., robotics, mobility
applications development)
Primarily led by BFSI GICs;
some adoption in Retail
Key areas of focus:
– Process automation
– Analytics
– Mobility solutions
Innovative talent management
Multiple focused initiatives on digital
talent
– Engaging environment at work
place (e.g., niche events,
hackathons)
– Specialized incentives (e.g.,
stock options, accelerated career
paths)
Instances of GICs creating new
skills development and evaluation
mechanisms for highly specialized
skillsets such as analytics
Issues for GICs to consider in partnering with start-ups and/or established vendors
IP ownership / protection One-time project based construct
or long-term partnerships
Strategic rationale for traditional
vs. alternative models
Proprietary & Confidential. © 2015, Everest Global, Inc. 13
Implications and call to action
GICs/shared services need to go beyond traditional sources to acquire
digital talent (e.g., train talent from other industries)
GICs/shared services need to be intentional about ecosystem partnerships
and evaluate strategic rationale (e.g., talent augmentation, niche skills)
Although digital is path-breaking, the road to success is incremental
innovation and not big-bang change
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