how to source digital initiatives to drive revenue generation
TRANSCRIPT
DIGITAL INITIATIVES & SOURCING DRIVING REVENUE
Yariv Drori, VP Strategy, AY Digital Kevin English, Partner & SVP, Neo Group Atul Vashistha, CEO, Neo Group
March 10, 2015
NEO INSIGHTS SERIES
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TODAY’S PARTICIPANTS 2
PRESENTERS MODERATOR
Yariv Drori, VP, Strategy at AY Digital, brings 15 years of experience in production and operation management in fast growing high tech companies in the eCommerce and ad tech space. Yariv spearheaded operations efficiencies that relied on globalization trends by leveraging talent pools in APAC and LATAM.
Kevin English, Partner & SVP, Neo Group, focuses on helping the firm grow its “Chief Digital Officer” practice by assisting clients across the full spectrum of strategy, sourcing, governance and organizational management services. Kevin has over 30 years of experience in the global services sector.
Atul Vashistha, CEO, Neo Group, is recognized globally as an author, speaker and leading expert on globalization, outsourcing and governance. Consulting Magazine named Atul one of the “Top 25 Most Influential Consultants” and “Top 6 IT Powerbrokers”. Atul is passionate about helping corporations create competitive advantage by leveraging global services and sourcing.
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ADVISORY SERVICES
GOVERNANCE SOLUTIONS
SUPPLY MONITORING & ANALYTICS
3
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DIGITAL GROWTH IS STRONG 4
Digital Ad Spending Worldwide, 2010-2016 Billions, % change and % of total media ad spending
Note: includes advertising that appears on desktop and laptop computers as well as mobile phones and tablets, and excludes all the various formats of advertising on those platforms; excludes SMS, MMS and P2P messaging-based advertising Source: eMarketer, Dec 2012 148475 www.eMarketer.com
Digital ad spending % change % share
$72.37 $87.27
$102.83 $118.40
$134.65 $149.18
$163.04
2010 2011 2012 2013 2014 2015 2016
17.5% 20.6% 19.8% 21.7% 23.4% 24.8% 25.9%
15.2% 17.7% 17.8% 15.1% 13.7% 10.8% 9.3%
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THE SMAC GROWTH IS GLOBAL 5
Ignoring the move to mobile could cost U.S. SMBs $1 trillion this year.
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CASE IN POINT: FACEBOOK USERS 6
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COMPANIES LAUNCHING DIGITAL PRODUCTS 7
Source: TCS Global Trend Survey, July 2014
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Revenue
Staff Line
Policy
Chief Digital Marketing Officer Chief Digital Business Officer
Chief Digital Strategy Officer Chief Digital Champion Officer
The goal of digital technology is to generate new sources of revenue. • Digital revenues responsibilities rest in the line
organizations w/ memo credit to chief digital officer. • Digital technology will be incorporated and
coordinated across generate/fulfill demand processes.
The goal of digital technology is to create new organizational capabilities & customer experiences. • Establishes a digital strategy at headquarters which
defines what it means to ‘be digital’ the direction, resources and relationships.
• The organization creates digital capability through its existing strategy execution process coordinated by a headquarter staff.
The goal of digital technology is to generate new sources of revenue. • Direct responsibility for generating digital
revenue rests in a clearly defined and assigned unit, which may be an existing or new unit.
• Direct responsibility for the resources required to meet digital revenue responsibilities.
The goal of digital technology is to create new organizational capabilities & customer experiences. • A distinctive group builds and deploys digital
capabilities via disrupting the business from the inside.
• Digitization of the rest of the organization is managed by transformation programs in support of compliance with new digital policies or imperatives.
RISE OF THE CHIEF DIGITAL OFFICER 8
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CDO AND DIGITAL GOVERNANCE 9
Business Intelligence
Social Media Mobile Digital Media
Security E-Commerce Architecture Cost Control
The CDO role has become more complex than a traditional CIO role. The CDO is responsible for Digital Governance. The need to balance rapidly changing business needs with even more rapidly changing technologies requires a broad view of both business and technology, and a sourcing plan that support rapid Time to Market implementation needs.
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CDO – TECHNOLOGY AND BUSINESS 10
Techno
logy
Busin
ess
Security Extensibility Global reach
Peak load/Balance
Networks
Security Enterprise Mgmt. Apps. IntegraAon
AnalyAcs
Data CompaAbility E-‐Commerce LocalizaAon
Content rendering
Mobility HolisAc Architectural Approach
Plan, Design, Implement & Support
Project Management
TesAng/HosAng/ Roll-‐out
Resource Availability
Cost Management
Cross-‐funcAonal Impact Business Strategy MarkeAng
Product Launch
Customer Engagement
Revenue GeneraAon
Social Media
• CDO role merges technology and business imperatives
• Need for a holistic digital strategy that that supports rapidly changing business parameters
• Needs include: • Technology evaluation • Real-time testing • Rapid implementation • Availability of niche or
specialized resources
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AND THERE IS TALENT SHORTAGE 11
© 2015 Neo Group Inc. Proprietary Source: GfK
R&D
Senior Management
Sales
Web Design
Business dev
Marketing/PR
Coders & developers
Most in demand skills Most difficult to recruit % that have tried to recruit skill in past 12 months % that have said fairly/very difficult to find
User experience
TALENT GAP POSING CHALLENGES 12
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HOW IS LACK OF TALENT HANDLED? 13
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ACCESSING GLOBAL RESOURCES: ANSWER TO THE TALENT GAP
0%
20%
40%
60%
80%
100%
ReduceOperating Costs
Gain access tonew skills
Gain access tonew technology
Transform / re-engineer
processes
More effectiveoperations at a
global level
Followingfexample of other
firms
Proven offeringsfrom serviceproviders
Economicdownturn
Enterprise ($3bn+)
Mid-Market ($750m-$3bn)
Source: AMR Research / Global Services Media, 2009 Sample: 127 Enterprises
14
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CASE IN POINT: INDIA AND TECHNOLOGY 15
NUMBER OF INDIAN EMPLOYEES (EST) FOR INDIA’S ‘BIG 5,’ IBM, ACCENTURE
250 000
200 000
150 000
100 000
50 000
0
30%-35% of the global workforce of IBM,
Accenture 70%-80% of the global
workforce of ‘big 4’
IBM Accenture TCS #1 Cognizant #2 Infy #3 Wipro #4 HCL #5
Source: Macquarie estimates 2013
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HOW DOES ONE LEVERAGE GLOBAL DIGITAL TALENT?
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SOURCING KNOWLEDGE IS KEY 17
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Vietnam • Large workforce • Large # of universities
graduate turnout • Good IT Skills • Promising IT labor market
Brazil • High turnout of IT graduates • Huge Labor pool • Good people skills and
availability • Quality human capital • Capable for large operation • Promising IT labor market
Russia • Excellent programming Skills • Large universities graduate pool • Large Tech workforce • Capable for large operation • Promising IT labor market
Ukraine • World class programmers • Smart & hard worker • Creative workforce
Czech Republic • World class IT skills • Very small IT graduate • Very limited labor force • Shortage of IT labor pool
Romania • Multi-Language Skills • Highly Skill Worker • Promising IT O &
BPO labor market
China • Large IT workforce • Improving Project Manager Level
Skills • Good number of colleges &
Universities • Capable for large operation • Promising labor market
India • Large IT workforce • World class IT skills • Excellent IT education system • Capable for large operation • KPO, BPO, Call Center skills labor pool • Amazing IT labor market
Uruguay • Limited IT workforce • Small Population • Higher end IT Skills • Suitable for small operation • Small IT graduate turnout • Shortage of IT labor supply
Egypt • Large labor force • Good education
system • Multi-lingual skills • Potential labor
market
Mexico • Good education system • Large IT graduate pool • World class IT skills set • Excellent bi-lingual skills • Capable for large operation • Promising ITO & BPO labor
Market
Israel • Highly qualified IT
graduate • Excellent IT Skills • Suitable for small
operation • Limited IT labor supply
Promising labor pool
Belarus • Excellent Software Skills • Small Labor Force • Suitable for Niche Operation • Smart & hard worker
Poland • Highest Universities in EE • Large IT Workforce • Largest Labor Pool in EE • Excellent Education System • Multi-lingual Skills Set • Promising ITO & BPO labor market
Shortage of labor pool
Canada • Excellent education system • Productive IT workforce • Capable for complex project • Shortage of Tech labor
supply
United States • World class IT workforce • Capable to manage most
complex project • Excellent education system • Shortage of IT labor supply
Argentina • Large labor pool • Bi-lingual capacity (English & Spanish) • Good for large contact center operation • Stable workforce in the long-run
Colombia • Large graduate pool • Huge labor force • Bi-lingual skills • Promising Labor supply
Guatemala , Panama, Honduras, Costa Rica, Peru, Chile
• Highly qualified graduate pool • Good for higher end services • Excellent bi-lingual • Small workforce • Limited labor supply
Philippines • Large workforce • Huge graduate pool • Fluent in English • Promising labor market
Malaysia • Excellent IT skills • Good education
system • Limited labor supply
KNOW YOUR SUPPLY: CURRENT HOT SPOTS 18
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Vietnam • Embedded Software • IT Services, R&D • Software Testing
Brazil • IT Services • R&D, ADM • Software Development • Engineering Services • Call Center • Back Office Operation
Russia • Embedded Software • Engineering Services • Product Development • R&D, Systems Integration • Web Development
Ukraine • Engineering Services, • IT Services • Product Development • Systems Integration
Czech Republic • Infrastructure
Management • Multi-Language Call
Center • IT Services, R&D
Romania • Business Analytics, • F&A BPO, HRO, • Financial Analytics, • IT Services, R&D • Multilingual Contact Center,
Procurement BPO,
China • Engineering Services • F&A BPO • IT Services, • Product Development, • R&D, Software Testing • Clinical Trial
India • Software Development • Product Development • IT Services • Engineering Services • Embedded Software & Services • Clinical Trial • Medical Transcriptions
Uruguay • Call Center (Spanish) • Infrastructure Management • IT Services • Product Development
Egypt • Embedded Software • IT Services • Medical Transcription
Multilingual Call Center • Product development • Software Testing
Mexico • Back Office Operations, • Call Center (English,
Spanish), • Embedded Services, • Engineering Services, • IT Services, R&D, • Software Testing
Israel • Hi-Tech Services • R&D • IT Services • Clinical Trials
Belarus • Embedded Software • Engineering Services • IT Services • Product Development • R&D, Systems Integration
Poland • Multi-Language Call Center • Shared Services BPO • F&A BPO • IT Application Services
Canada • IT Services • R&D, ADM • Medical Transcription • KPO, BPO Voice and Non-
Voice
United States • R&D • Product Development • Embedded Software • Engineering Services • ADM, IT Services etc
Argentina • Bi-lingual call center services • F&A BPO • Digital Services
Colombia • Back Office Operation • IT Application • Bi-Language Contact
Center
Guatemala , Panama, Honduras, Costa Rica, Peru, Chile
• Call center (English & Spanish) • Back Office Operation • F&A BPO • Financial Analytics
Philippines • Call Center (English and
some Spanish), • Contact Center, F&A BPO, • IT Services, LPO, • Medical Transcription
Malaysia • Call Center (English, Mandarin), • F&A BPO, IT Services, • Technical Helpdesk
CURRENT HOT SPOTS: SPECIALIZED FUNCTIONS 19
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80,000
37,180
27,000 26,300 25,638 20,000 18,000 17,000 16,000 15,360
7,000 6,000 6,000 5,000 3,985 3,500 2,569
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
IT Graduate Pool Per Year
• Colleges and universities in Coimbatore (India) produce one of the largest IT graduate pools per year. Has stable IT labor supply in the long-run.
• While colleges & universities in Medellin produce the smallest IT graduate pool per year among the emerging cities indicating limited IT labor supply at present and in the future.
KNOW YOUR SUPPLY: TECH GRADUATES 20
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190,000
151,200
70,000
51,200 50,000 45,000 44,237 40,000 35,000 31,149 30,000 30,000 28,000 19,923 14,724 11,000
1,500 0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
180,000
200,000
Non-IT Graduate Pool Per Year
• Most of the colleges and universities in emerging cities have produced large graduate pool per year; indicating stable non-IT labor supply in the long-run.
• However, colleges & universities in Medellin, Brno and Guadalajara produce the smallest graduate pool per year indicating limited non-IT labor supply at present and in the future.
KNOW YOUR SUPPLY: NON-IT GRADUATES 21
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WHAT DO THESE LOCATIONS ENABLE... 22
Good Supply of Digital Labor
ConsultaFve LegislaFve & Regulatory Environment
Time Zone CompaFbility/ Advantage
Priority AQenFon from Government
PoliFcal & Economic Stability
Tax & Other IncenFves
World Class Infrastructure
Favorable PopulaFon Trends
CompeFFve Labor Costs
Capable Local Professional Advisers
Low Telecom Costs
Friendly Work Permit & ImmigraFon Laws
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KNOW WHAT TO SOURCE 23
CapabiliAes Cube
Indu
stry
TransformaA
on
Busin
ess P
rocesses
Archite
cture
Business Domain Knowledge
Hot Skills
Mainstream
Commodity
CORE
CORE
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DRIVE THE RIGHT INCENTIVES 24
! MulAple sourcing models ! Most use the following or a combinaAon of these for their operaAons
Governance Based Model
Pricing/SLA Based Model Time & Material
Fixed Price
Managed Capacity
! As name suggests, the model is Price based ! Guidelines based on pricing of the work order
! Based on governance strategies deployed for projects
Client Managed
Supplier/GIC Managed Co -‐ Managed
TransacAon Based
Managed Services Engagement Models are typically a Hybrid of these
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THE 7 SECRETS OF GLOBAL SOURCING
§ Book released in 2010 based on an 8-Year study of corporate best practices in sourcing services and talent globally
§ Identified 7 practices (secrets) that “Successful Global” market leaders have in common
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FINALLY, THE 7 SECRETS 26
Embrace Globalization
Welcome It As A Transformation Lever
Align Business And Globalization Objectives
Take a Lifecycle Approach
1 Assign The Best People
Embrace A Continuous Improvement Mind-set Source: Outsourcing Wisdom, Atul Vashistha
Implement a Strong Governance Model
1
2
3
5
4
7
6
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THANK YOU 27
NEO GROUP GLOBAL HEADQUARTERS 6200 Stoneridge Mall Road, 3rd Floor Pleasanton, CA 94588, USA ASIA-PACIFIC HEADQUARTERS No.13, B-2, 1st floor, C Block Embassy Heights, Magrath Road Bangalore-560 025, India AMSTERDAM, NETHERLANDS AUSTIN, TEXAS BOGOTA, COLOMBIA LONDON, UK NEW YORK, USA ATLANTA, USA SAO PAOLO, BRAZIL SILICON VALLEY, USA SYDNEY, AUSTRALIA
ATUL VASHISTHA Chairman & CEO [email protected] +1.415.839.8050 KEVIN ENGLISH Senior Vice President [email protected] +1.703.622.7892 www.NeoGroup.com www.SupplyWisdom.com [email protected]