Business Process Transformation A Pulse Check

Transcription

1 White Paper Business Process Transformation A Pulse Check Over the last decade or two, two trends have been noticeable across all businesses. The move towards consolidation of office-based operations, whether front-office, mid-office or back-office, and increase in regulation and government oversight. These moves have substantially increased the pressure on the operations team to deliver value as a business partner to the organization. The recent global financial crisis has not helped either it has starved the CXOs of funds while the pressure to drive efficiency and effectiveness, and the pressure to transform continues. This paper performs a pulse check on the need for business transformation in the current context, and the potential areas that a provider can help with.

2 About the Author Shyam Kerkar AVP & Head, Marketing for Business Process Services. Shyam is the Head, Marketing for Tata Consultancy Services Business Process Services unit TCS BPO. He has been instrumental in ensuring that TCS BPO receives the brand recognition it deserves globally, in capturing the appropriate mindshare with influencers and, in assisting TCS various customers in identifying new areas to expand relationships with TCS. With TCS for 14 years, Shyam has been involved in various roles that ensure that TCS prospects and customers Experience Certainty. Prior to his current role, Shyam was a leading member of TCS BPO s pre-sales team and was instrumental in identifying innovative solutions for prospects. Previously, he has managed customer relationships and has been responsible for the delivery of a number of large programs. 2

3 TCS recently conducted a blind survey across buyers, advisors and suppliers to gauge what each one of them felt about initiating a business transformation program in the current macro economic situation and to gauge how they are going about it. We received responses from 100+ buyers, 25+ analysts and advisors and 60+ suppliers. We have a cross-section of the buyer community represented in this survey with substantial representation across segments. Buyer Mix : Across Industries Services S/W, H/W 11% Insurance 13% Manufacturing 15% LSHC 14% Other 9% Retail & CPG 7% Banking & Financial Services 23% Travel & Hospitality 4% Govt & Public Sector 3% Media & IS 2% Telecom N/W & ISP 1% 10,000-24,999 Employees 18% 25,000 49,999 employees 17% 50,000+ employees 17% BU or Department Manager 17% 1,000-10,000 Employees 26% Fewer than 1,000 employees 22% Director, EVP, SVP, VP, Controller 48% C-Level Executive CKO, etc.) 19% IT or IS Manager 14% Other2% n = 103 Respondent mix across industries, designations and roles 3

4 TCS asked buyers and advisors to prioritize the factors to be considered when embarking on a transformation journey to efficiency and effectiveness. More buyers chose time to benefit as one of the Top 3 factors than scale of benefits though scale of benefits continues to rank as the single most important factor that buyers consider. It is also interesting to note that the analysts and advisors who chose scale are almost twice in number to those who chose time to benefit. Immediate realization of benefits continues to lag behind as a critical factor when analysts look at it but buyers give it an overall importance rating almost equivalent to the scale of benefits. The latter is not a surprise given the current macro-economic conditions. Other In-house expertise available Peer Group Experience Immediately Realized Benefits Scale of the benefits Overall Project Duration n= (High Importance) 2 3 (Low Importance) Buyers : Top 3 Factors Impacting Transformation Project Decisions Buyers continue to attach significant importance to in-house expertise available and peer group experience in choosing transformation initiatives. As buyers move towards a global sourcing model they can find the right partner to supplement the in-house expertise. Analysts and advisors overwhelmingly identify aligning processes to industry best practices as the most significant transformation initiative. This is perhaps in line with their focus on the scale of benefit rather than immediacy of benefits. Industry best practices evolve over time and are considerably impacted by the technology and infrastructure availability at the time. Quite often it is not possible to undertake the move to the golden ideal without making step changes in terms of simplification and harmonization. Other In-house expertise available Peer Group Experience Immediately Realized Benefits Scale of the benefits Overall Project Duration n= (High Importance) 2 3 (Low Importance) Advisors : Top 3 Factors Impacting Transformation Project Decisions 4

5 We also asked the buyers to tell us about what has been done in their organizations about the transformation initiatives and the activities that they were planning in the near future. Seeking greater insights from available data is perhaps one of the key items that remains unaddressed across more than 50% of the organizations. Part of the reason for this could also be the buyer perception that analytics ability should be delivered from onshore or nearshore locations. The rapid emergence of some of the low cost locations in delivery of Knowledge Services could see this changing. Technology & Infra. Improvements Technology - Automation People - Consolidate COGS Services People - SSC for SG&A functions Proces - Industry Best Practices Process Simplification & Rationalization Greater Insights from Data n= (High Importance) 2 3 (Low Importance) Advisors : Top 3 Transformation Initiatives Technology & Infra. Improvements Technology - Automation People - Consolidate COGS Services People - SSC for SG&A functions Process - Industry Best Practices Process Simplification & Rationalization Greater Insights from Data n=78 0% 20% 40% 60% 80% 100% Have not done it Have Done this in-house Have Outsourced this Buyers : Transformation Initiatives Undertaken Offshore 16% Mix 26% Onshore 47% n=105 Nearshore 11% Buyers : Analytics Service Delivery Location Strategy 5

6 The same question also indicates that more than 75% of the organizations have already undertaken some form of technology and infrastructure rationalization initiative and a similar number has attempted automation to eliminate labor. Technology & Infra. Improvements Technology - Automation People- Consolidate COGS Services People-Consolidate SG&A functions Process - Industry Best Practices Process Simplification & Rationalization Greater Insights from Data n=78 0% 20% 40% 60% 80% 100% Outsourced - Gain Share Outsourced Fixed Fee Outsourced, managed by buyer In-House Buyers : Transformation Initiatives Planned What is interesting is that buyers believe that there is a significant amount of activity that remains to be done in the Technology arena with more than 60% of the organizations seeking to outsource this in some form or the other. We see interest in outsourcing all activities that drive efficiencies and effectiveness, with a small but significant portion of buyers seeking gain-share arrangements. This is even more evident when we asked buyers about ownership of specific aspects of business transformation. Across the spectrum of activities 30-40% of the buyers are choosing a collaborative approach to managing transformation initiatives. A provider who can offer consulting and advisory capabilities in addition to being able to drive implementation collaboratively would meet the need of the hour. 6

7 Process change- implementation Process change - design Technology change - implementation Technology change - design Overall transformation engagement n=78 0% 20% 40% 60% 80% 100% Third-party advisor or consultant Outsourced service provider Customer & provider collaboration Customer Customer Perspective: Transformation initiatives Ownership TCS FORE - The Right Partner for Business Transformation TCS FORE addresses transformational needs of its customer through a comprehensive assessment model and a roadmap for optimizing business processes. FORE drives accelerated co-transformation through right balance of scale and time to benefit. Its demonstrated success in guaranteeing robust execution, mitigating risk and driving growth across industries and peer groups provides an added comfort level to buyers. 7

8 About TCS BPO Business Process Services (BPO) at TCS is about managing and executing business operations. Our domain expertise helps deliver core business processing across industries, analytics and insights, and support processes such as accounting, HR and supply chain management. TCS partners with customer to accelerate co-transformation, and generates business value for customers through delivery excellence, risk management and innovative models such as Platform BPO which delivers process as a service. With annual BPO revenues of greater than US$ 1 billion, TCS is one of the largest BPO providers with 35,000+ employees servicing 175+ customers across the globe. Contact For feedback on this article and more information, please contact us at: bpo.imo@tcs.com Subscribe to TCS White Papers TCS.com RSS: Feedburner: About Tata Consultancy Services Ltd (TCS) Tata Consultancy Services is an IT services, consulting and business solutions organization that delivers real results to global business, ensuring a level of certainty no other firm can match. TCS offers a consulting-led, integrated portfolio of IT and IT-enabled infrastructure, engineering TM and assurance services. This is delivered through its unique Global Network Delivery Model, recognized as the benchmark of excellence in software development. A part of the Tata Group, India s largest industrial conglomerate, TCS has a global footprint and is listed on the National Stock Exchange and Bombay Stock Exchange in India. For more information, visit us at IT Services Business Solutions Outsourcing All content / information present here is the exclusive property of Tata Consultancy Services Limited (TCS). The content / information contained here is correct at the time of publishing. No material from here may be copied, modified, reproduced, republished, uploaded, transmitted, posted or distributed in any form without prior written permission from TCS. Unauthorized use of the content / information appearing here may violate copyright, trademark and other applicable laws, and could result in criminal or civil penalties. Copyright 2012 Tata Consultancy Services Limited TCS Design Services I M I 05 I 12