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INDUSTRIALIZATION OF SERVICES
The Industrialization of Service represents one of the biggest trends in the technology and services sectors
Industrial Revolution
Cheap,
controllable energy
(steam power)
Computing power /
global labor pool
THEN
Cheap
Transportation
(railroad)
NOW
Standardization
of parts / mass
customization
Repeatability
Measurability (6)
Internet / global
networking
Standardization of
processes
Mass customization
Confidential and proprietary - Not to be distributed without the prior written consent of Copal Partners
Medium
High
RESEARCH &
ANALYTICS
(40-60%)
INSURANCE
(40-60%)
IT SERVICES
(25-50%)
ACCOUNTING / CALL
CENTRES (35-40%)
C
IN
SE
A
E
R
S
G
N
VI
A
S
Increased
complexity can
lead to higher
savings with
potentially less
risk
TRANSACTION
PROCESSING
(25-40%)
Confidential and proprietary - Not to be distributed without the prior written consent of Copal Partners
EVOLUTION TOWARDS MORE KNOWLEDGE INTENSIVE WORK AND THE FRONT END
KPO
Cost Arbitrage
BPO
ITO
Cost Arbitrage
Global Delivery
Model comes of
age with changing
telecom scenario
Emergence of
Quality
certifications (CMM,
ISO)
Intellectual
arbitrage allows
outsourcing of core
processes
Repeat initial
successes by
developing robust
knowledge
management
methodologies for
KPO
Emergence of
Quality
certifications like
CPOC
Focus on business
domains
Multi-geography
strategies
Focus on business
domains enabling
access to complex
business-facing IT
systems
Geographical
diversification by
setting up delivery
centres in multiple
locations
Focus on
developing robust
knowledge
management
methodologies
Evolve to provide
end-to-end
consulting services
Focus on
knowledge
management
Mid 80s
1990-1994
Infancy
1995-1999
2000-2004
Growth
2004-2007
2008-2010
Maturity
Confidential and proprietary - Not to be distributed without the prior written consent of Copal Partners
HIGH
HIGH
30-45
High
Complexity
Moderate Complexity
10-12
15-25
Low Complexity
LOW
LOW
Confidential and proprietary - Not to be distributed without the prior written consent of Copal Partners
Product based
transaction
processing and
customer contact
centres (BPO)
Analytics
Outsourcing
activities (KPO)
Retail Banking
Confidential and proprietary - Not to be distributed without the prior written consent of Copal Partners
PREVENTIVE MEASURES
Confidential and proprietary - Not to be distributed without the prior written consent of Copal Partners
Change Control
Data Protection
Data protection and related issues of security have always been areas
of concern for companies considering outsourcing
Solutions to this issue include negotiations of any gaps between
the solution offered by the supplier and what the customer
believes is appropriate security for its needs
Termination
Both parties in an Outsourcing contract need to draft an effective exit
strategy to avoid the possibility of being tied into an unfavorable
outsourcing deal. Reasons why a party might want to terminate an
outsourcing contract include:
Material breach by the other party
Insolvency, winding up or change of control of the other party
Right for the buyer to terminate for convenience, where there is
no fault on the part of the supplier
Confidential and proprietary - Not to be distributed without the prior written consent of Copal Partners
Country
Current
Availability of
Talent
Potential
Availability of
Talent
Compensation
Cost Savings
Infrastructure
Cost Savings
Potential Risk
India
BBB
Canada
AAA
Australia
AA
Singapore
AA
South Africa
Overall
Ireland
AAA
Wales
AAA
Parameter is most favorable
Confidential and proprietary - Not to be distributed without the prior written consent of Copal Partners
Country
Captive
Joint Venture
Third Party
Investment
Set-up Time
Perceived Level of Data Security
Control Over Operations
Management Time
Exit Costs
High
Medium
Low
Confidential and proprietary - Not to be distributed without the prior written consent of Copal Partners
Confidential and proprietary - Not to be distributed without the prior written consent of Copal Partners
Acquirer
EXL Services
BPO
WNS
BPO
Cognizant
CSI
Copal Partners
KPO
Confidential and proprietary - Not to be distributed without the prior written consent of Copal Partners