future of global operations
DESCRIPTION
Operations to enable to better the business they serve and have moved beyond traditional cost reduction to embrace new technology, practices and talent to move beyond incremental gains. See Gianni Giacomelli, SVP, Genpact and Phil Fersht, CEO, Hfs Research explain how to do this.TRANSCRIPT
Presentation Title Goes Here
November, 2012
Playback available on https://learnatgenpact.webex.com/learnatgenpact/lsr.php?AT=pb&SP=EC&rID=18815472&rKey=C5C9F6BB94A25616
The Future of (Global) Operations
© 2012 Copyright Genpact. All Rights Reserved.
© 2012 Copyright Genpact. All Rights Reserved. 2
A Global Leader In Business Process Services: Process Transformation and Outsourcing, Analytics, Technology
About Genpact ► Overview
We help leaders of some of the largest enterprises transform and run their processes and operations, including the very complex and industry-specific
What we do
Unbiased, agile combination of process science, related technology and analytics limiting upfront costs and enhancing future adaptability
Right critical mass: we are large (62,000+ global staff) but our solutions appropriately flexible; our top management is directly involved in our client partnerships
How we do it Our impact
We help enterprises to bemore competitive by becoming more intelligent: adaptive, innovative, globally effective and connected…
…by enabling tighter management of costs, risks, regulations, and growth enablement
The results: US$22B* of impact for 800+ global clients
*US$22B is a cumulative figure since 2006
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Who is Genpact
• GE spin-off, NYSE “G”
• 60,000+ associates
• Pioneer in global business process management
• Initial core F&A and Financial Services ops, now includes analytics operations, IT and process design/optimization – across industries
• Operations process as a science
© 2012 Copyright Genpact. All Rights Reserved.
Keynote SpeakerSpeakers for this session
Gianni Giacomelli Senior Vice President, Product Innovation Leader, Genpact
Gianni leads the corporate organization tasked to create scalable, productized services by weaving together Genpact’s process excellence, IT solutions and analytics capabilities.
His career spans 21 years across strategy and marketing, corporate business development, across three continents. He is based in New York.
Phil FershtFounder and Chief Executive Officer, HfS Research
Phil founded HfS Research in early 2010 and has overseen the growth and development of the organization to become the leading analyst authority and knowledge community for global business and IT services.
He is a prolific author, analyst and visionary for the global services industry, named "Analyst of the Year 2011” by the Institute of Industry Analyst Relations (IIAR). Phil is based in Boston.
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Agenda today
1. What’s at stake
B. Technology
A. People
C. Process
4. The way forward
2. Trends and implications
© 2012 Copyright Genpact. All Rights Reserved.
1. What’s at stake
B. Technology
A. People
C. Process
4. The way forward
2. Trends and implications
© 72012 Copyright Genpact. All Rights Reserved.
Operations to enable better the business they serve
Offense
Defense
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Today’s operations aims have moved beyond the traditional cost reduction…Importance of Program Objectives TodayRespondents from $3B+ Enterprises
Source: HfS Research and PwC 2012, N = 188 Respondents from enterprises with more than $3B in revenue
improve access to technology
Gain access to talent and capabilities
Drive cultural change
Improve compliance capabilities
Align support services with global corporate strategy
Transform processes (e.g. cross-functional process redesign, automation)
Support global growth strategy
Reduce costs
Increase scalability and flexibility of operations
Drive process efficiency (i.e. cycle time, quality)
0% 20% 40% 60% 80% 100%
Very Impor-tant
Somewhat Important
Not Impor-tant
% of Respondents
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…and require strategy - embracing new technology, practices and talent to move beyond incremental gains
Source: HfS Research 2012, N = 198 Buy-side Executives
Managing Transitions
Service Provider Selection
SLA Performance Management
Managing Financial Business Cases
Contract Negotiation
Influencing Executives
Adding Addition Volumes to Existing Services
Improving Industry Acumen
Improving Service Provider Relationships
External Benchmarking
Defining and Adding New In-Scope Processes
Driving Innovation
Raising the Bar for Existing SLAs
Defining Business Outcomes Beyond Cost Reduction and Efficiency
Improving Analytics
9%
11%
12%
13%
14%
14%
19%
20%
23%
24%
25%
28%
28%
28%
32%
Increase in importance
Q. How important are the following objectives to your team today, compared to when you first started your SSO program?
© 2012 Copyright Genpact. All Rights Reserved.
1. What’s at stake
B. Technology
A. People
C. Process
4. The way forward
2. Trends and implications
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X?300,000
office support 2020 excess
200,000 data scientists gap per year
US example – the great shift impacts Ops
Source: McKinsey Global Institute
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60% expect non-mainstream* work to become norm
The traditional office and
staffing model is under pressure
* Work from home, part time, performed by partners
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Train, manage, motivate and retain
Span of management control
Utilization of facilities vs. vicinity
Intense travel
Young employees
Capacity balancing
Sudden changes and need for speed
Compliance and control
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Operations also struggle with leadership, not just delivery staff, to drive the future agenda
Source: HfS Research 2012, N = 192 Buy-side Executives and 155 Sell-side Executives
Q. How difficult or easy has it been to attract and source talent for your team to perform the following activities?
The Same as Other Positions
More Difficult
!
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1. What’s at stake
B. Technology
A. People
C. Process
4. The way forward
2. Trends and implications
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Extinction?
Planner
Fax
Green-screen ERP
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Do we understand inflections brought by…
Smart devices
Mobile broadband
VoIP
Accurate language translation
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Social technology lays the foundation of radically richer collaboration
Source: Genpact, McKinsey
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2.5 years, cost -50%
4G
3G
Bandwidth (last 10 years)
Penetration(US)
40 years
10
years
10 years 7 years
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1.5 years pixels 2X better
82’ screens
Or 1’…your eyeFold, wear it
Walls as keyboards
Remote everything
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Your office…
…your (Microsoft) Office…
…everyone’s office?
POLLWhere do you think new collaboration
technology and practices will have the most immediate effect?
1. Traditional offshore captives/BPO collaborating with onshore retained org
2. Traditional onshore regional centers collaborating with retained org
3. Work-from-home collaborating with office based org
4. Collaboration for new services e.g. analytics, FP&A, AML in captive/BPO
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1. What’s at stake
B. Technology
A. People
C. Process
4. The way forward
2. Trends and implications
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Economic tension
Talent imbalances
Technology eliminates distance
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The future of process is shared
90% of F&A organizations
50% of back or middle office organizations
1000s of miles average distance
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You can’t beat scale…and its corollaries
Source: SAP ASUG 2007, Genpact analysis
Optimization
Scale
10X scale can cut 50% ofcost-per-unit-of-work
Standardization to scale
explains variance
“Co
st p
er u
nit
”R
atio
of
FT
Es
per
1000
em
ploy
ees
serv
ed
Company size Employees, log scale
* Benefits Admin
0
1
2
3
4
5
100 1,000 10,000 100,000
R2 = .90
Cost arbitrage
Cost per hour can be 70% less - for same skills globally, and to some extent regionally
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ROUNDED/ESTIMATE
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Rule based
Non-recoverable travel, staff welfare, meetings
Transport, cafeteria
Direct support
Telecom
G&A - personnel
Other infra OPEX
IT, software mainten.
Associate comp.
Recruitment, training
Direct supervision*
Bench
Rentals
97
Dir
ect
FT
EG
&A
ITIn
fra
Depreciation
Knowledge Basic data
83
GBS ImpactCost of delivery / FTE / year by process type
Source: McKinsey, Genpact analysis
Operations “production cost” can benefit from change
Early Mature
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GBS levers impact key drivers of effectiveness
• Automated interface process within ERP system• Automated tool for inter-company transactions• Use of automated tick & tie/ reconciliation tool
• Global common chart of accounts• Standard policies/operating framework• Standardization & rationalization of IT systems• Synchronize edit checks between subsidiary and
parent books for better first pass yield• Standard policies/operating framework
EXAMPLE
Process optimization Scale
Labor arbitrage
Technology redesign
Standardization and pooling
Sharing best practices
Practice type
Impact of key GBS economic levers
• Recs prioritization• Documented reconciliation policy in place• Reconciliation dashboards published regularly• Standard policies/operating framework• Analysis of repetitive open items to reduce inflow
Source: Genpact experience
Highimpact
Noimpact
28
MaxMinimum MedianTime to report 30 4
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1. What’s at stake
B. Technology
A. People
C. Process
4. The way forward
2. Trends and implications
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Neither Satis-fied or Unsat-
isfied
Unsatisfied
Satisfied
However, Ops leadership issue must be addressedQ. How would you describe your satisfaction with your current role as it relates to…
Source: HfS Research 2012, N = 278 Buy-side Executives and 162 Sell-side Executives
Dissatisfaction with career opportunities Ops may dissuade the top caliber needed for real transformation
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GBS is important and related choices can change, too
Corporate
Res
ultsSt
rate
gic
guid
ance
Service Requirements
Performance Contracts
ServiceRun processes efficiently,
drive best practices and valueProvide corporate governance and strategic
guidance, establish policies
Business Business Partner
GBS
Source: Genpact experience31
Internal Partner
Input
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Unified collaboration environments
Workflows
ERP backbone
SSC/BPO Client/Business
Adding the missing layer in operations’ flow of work
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It is about people working together naturally
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Team Management
Strategy, brainstorming, designing
Knowledge sharing, updates, training
Query resolution, troubleshooting
Coaching
One-on-one, skip level, perf. review
Governance, monitoring
Compliance
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GBS
NOWLoB 1
COUNTRY A
COUNTRY B
LoB 2
WFH
Knowledge worker Transaction worker
Conclusion: a practical vision of distributed and flexible talent - with technology and practices that keep pace
Source: Genpact analysis
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GBS
FUTURE
REGION 1
REGION 2
LoB 1LoB 2
Unified collaboration
Contractor
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About Genpact
Genpact Limited (NYSE: G) is a global leader in transforming and running business processes and operations, including those that are complex and industry-specific. Our mission is to help clients become more competitive by making their enterprises more intelligent through becoming more adaptive, innovative, globally effective and connected to their own clients.
Genpact stands for Generating Impact – visible in tighter cost management as well as better management of risk, regulations and growth for hundreds of long-term clients including more than 100 of the Fortune Global 500. Our approach is distinctive – we offer an unbiased, agile combination of smarter processes, crystallized in our Smart Enterprise Processes (SEPSM) proprietary framework, along with analytics and technology, which limits upfront investments and enhances future adaptability.
We have global critical mass – 62,000+ employees in 24 countries with key management and corporate offices in New York City – while remaining flexible and collaborative, and a management team that drives client partnerships personally.
Our history is unique – behind our single-minded passion for process and operational excellence is the Lean and Six Sigma heritage of a former General Electric division that has served GE businesses for more than 15 years.
For more information, visit www.genpact.com. Follow Genpact on Twitter, Facebook, and LinkedIn.