Bpo

Business Process Outsourcing V K Raman, Global Delivery, BPO Services Analysts Day, 5th Feb 2007

5 February 2007

Experience Certainty.

BPO Services : Agenda •Business Overview •Market Opportunity •Growth Strategy •Case Study

5 February 2007

Business Overview : Revenue by Service Line

Consulting, 3.4% Asset Leverage Solutions, 2.8%

EIS, 5.4%

BPO, 5.8%

+528% Year over Year

Infrastructure, 5.5% Enterprise Solution, 11.8% Business Intelligence, 9.5%

ADM, 53.5% Assurance, 2.3%

Based on Q3 FY2007 Revenue

5 February 2007

Value Delivery Extraction Excellence Approach Shared Services

Transition Task Level Automation

Operations HR- Payroll

Infrastructure Quality

Travel & Hospitality

Bundling IT & BPO

HR

5 February 2007

Merchandising

Customer Analytics

Fare Filing

Loyalty Administration

Statistical Analysis

Health Care Revenue Accounting

Telecom

Clinical Data Mgmt.

Order Provisioning

Manufacturing

Revenue Assurance

Warranty/Spare Parts Management

Sourcing and Logistics Management

Insurance

Sales and Order Management

New Business Servicing

Closed Book Administration

Banking & Fin.Services

Claims Administration

Policy Servicing

Mortgage Processing

Check Processing

Credit Card Operations

Securities Processing

Industry Specific Offerings

Business Overview : Offerings Retail

Finance & Accounting Other HR Processes (e.g. Employee Data Mgmt.)

Supply Chain Management

Customer Interaction Management Knowledge Process Management Utility Services

Administration

Growth Strategy : IT and BPO Synergies Increased bundling of IT and BPO in large outsourcing contracts

Benefits enterprises • In-depth knowledge of systems

IT and BPO 17%

19%

21%

and offerings • Significantly lower transition time because of easier knowledge transfer

IT Services 61% and Software

• Process improvements through task 59%

58%

level automation • Single vendor control • Significantly reduced fixed costs for vendor management

Hardware

22%

2002

22%

2004

21%

2005

• Near zero technology maintenance cost • Utility based offshore delivery model

Bundling of IT and BPO more predominant in mature offshorers Source : McKinsey

5 February 2007

Growth Strategy : Sustainable Competitive Advantages Domain Led Offerings

Platform Based Offerings

• Focus on key Horizontal Offerings and specialized vertical slivers • Work in focused domains • Reutilize TCS’ intellectual property – tools, methodologies & frameworks • Benchmark to best-of-breed industry standards, processes & practices

• Eliminate client fixed technology & service delivery cost by offering completely variable utility / transaction based pricing • Powered by in-house developed platforms

Global Network Delivery Model

Leveraging IT-BPO Synergies

• Deliver 24 X 7 using follow the sun approach. • Deploy local associates to undertake task needed for regulatory and language skill reasons. • Mumbai, Chennai, Bangalore, Budapest, Santiago (Chile), Montevideo (Uruguay), Hangzhou (China), Peterborough (UK), Missoula (US) & TCS IT Delivery Footprint

• Bundling of IT & BPO, process automation and productivity improvements • Significantly lower transition time & risk given indepth knowledge of customer process & IT systems • Effective feedback capture from day-to-day operations for system enhancements

5 February 2007

Case Study : Pearl Deal Company Overview • Over 2 million policyholders • £27 billion of assets. • Closed book insurance policy portfolio

Size of deal • $847 million over 12 years • 950 FTEs

Business Needs: • Reduce cost of operations • Transparency in pricing and joint value discovery to reduce costs ??

Business Solution Offered By TCS: 45% 16% • Comprehensive transformation plan – Migrate 13 platforms to TCS platform (IIMs) – Offshoring from year 2 18% – Process improvements • Investment mindset 11% – Development of proprietary L&P platform – IIMs Process Platform Off-shoring Total – Upfront investments for takeover of operations savings consolioptifrom out• Experienced deal team dation mization sourcing and auto– Practitioners with significant UK L&P business mation – expertise – Dedicated deal team created from TCS! Insurance practice • IT/BPO synergies – Cost savings maximized by bundling ITO and BPO using platform rationalization, process-reengineering and off shoring Business Benefits • 45% total savings to Pearl form outsourcing by process optimization, platform consolidation and automation, offshoring • System rationalization, productivity improvement, selective offshoring and economies of scale via new books • Ability to address large “closed book market” as a third party provider

5 February 2007

Case Study : Large Retail Chain - Chargebacks Company Overview • Fortune 50 large US retail chain with revenues greater than USD 80 B.

Business Needs: • Tracking of Process metrics • To improve Chargeback reversal rate • Movement to paperless operations

Size and Scope of Process • FTE Strength - 20 • Analyse Credit Card Disputes • Fax chargeback notices to the stores • Follow up with stores by making calls • Send complete documents to the bank

Business Solution Offered By TCS: • The process was decided to be moved offshore as “lift and drop” to quicken savings to the customer. • TCS well defined and time tested quality framework was used to understand the existing process and gaps. Added a software system to help in – Better identification of valid chargeback and & potential reversals / invalid chargeback. Eliminate the time spent on ivalid chargeback. – Algorithm based prioritization of potential chargeback reversals by $ value, due date and type of card. Focus on invalid chargeback greater than $1000 • Added a digital Fax solution where the docs are sent and received in form of an image through a Fax server.

Systems Used: • IBM • MS Access Database • Receipt Look Up

Business Benefits: • The reversal rate was improved from 45% to 70%. • The bottom line was increased by $ 1 Million USD per month. Projected savings in one year $ 15 million USD • The customer is able to strategically focus on the valid chargeback which in turn prevent the recurrence of those transactions and improve their bottomline. Key Learning & Findings: • IT – BPO Synergy

5 February 2007

Case Study : Global Publishing & Media Co. Company Overview • A large Global publishing, financial, information and media services Company

Business Needs: • Inefficiencies in processes onshore, resulting in poor performance on metrics • High cost of providing service in a non-revenue center • Inability to improve process efficiency due to Physical work flow tracking and reporting system

Size and Scope of Process • Accounts Receivable / Cash Application Process • 19 TM, 1 TL & 1 PM

Business Solution Offered By TCS: • Offshore processed 100% of the volumes two weeks ahead of schedule, a reflection of the smooth knowledge transfer • The project became SAS Type 1 compliant within 3 months of BAU and there were no nonconformances • The client is billed for 21 FTEs in the first year and in the subsequent 2 years TCS is expected to reduce billing to 19 FTEs • A Web Tool was developed to enable onshore to track the process and view reports at any point of time

Systems Used: • Oracle and Lawson based AR System

Business Benefits: • FTE Cost arbitrage of approx. $ 80,000 / month. • Increased first day applications rates by 5 % , thereby reducing follow ups with customers resulting in operational savings.

Key Learning & Findings: • Implementation of Web based Tool to ensure real time communication with Onshore team , this leads to faster transaction response times.

5 February 2007

Case Study : Large US Retailer Company Overview • Fortune 100 Retail chain with annual revenues greater than $80 B. • Targets the home improvement market Size and Scope of Process • Finance & Accounting (150) • Technical Helpdesk (80) • Email Support (100) • CC Chargeback (40) • Merchandizing (15) • Price Change • SKU Count Mgmt & status update. • Suspense Purchase Order (PO) deletion and status change • Customer Interaction ( 30) • Voice / Email Helpdesk • Services (45) Systems Used: • IBM Mainframes • Access Database • Microsoft Outlook

Business Needs: • Consolidate processes to deliver from single location providing a standardize & unified experience. Removal of redundant and manual activities • Reduction of Backlogs • Prevent $0.5m revenue leakage due to excess payment made to vendor every month Business Solution: • Lift & Drop Approach to transition. Phased transition by process • Developed the workflow applications for easy tracking and effective monitoring • Web Portal developed to provide the clients with online reports • Developed an utility to prioritize activities – Chargeback reversals prioritized by date and value • Digitized some of the activities – Added a digital Fax solution

Business Benefits: • BPR drives savings worth 18 million dollars annually – Identified the top 20 accounts for the companies & resolved In the past 7 months $3.6m overpayment by adjusting open credit notes to over due invoices – Created visibility on warranty invoices and saved more than $1m in past 7 months – Introduced system changes in the billing software leading to reduction in incorrect billing and resulting in $1MM (Approx) saved every month • 24 hours assured cycle time on retail price change adds to the Competitive Advantage by allowing implementation of new promotions in a very short time • Credit Card Chargeback reversal rate increased from 40 % to 75% resulting in increased savings of $1 MM a month.

5 February 2007

Case Study : A leading Global Investment Bank Company Overview • Large Global Investment Bank with over € 1,097 billion in assets across 138 nations

Size and Scope of Process • Revaluation- Timely and accurate generation of Client revaluation statements for FX, OTC derivative, Commodities products and securities for the bank’s clients (33) • KYC - Revalidation of clients from Global Banking & Global Markets -The Risk Capital Management (RCM) division of DB • Classifying the client in various risk buckets • 100 FTE Avg/ month • Credit Risk – Supporting 7 Credit Risk Management processes (75) • Static Data - Static data set up (A/c opening/maintenance& SSI) for various products like equities, fixed income, OTC and MM products across different geographies (132) • Systems Used: DB’s Systems and • applications

Business Needs: • To reduce Cost of Operations and Improve productivity • Client data validation and system integration to enable efficient reporting system • Centralised operations to support multiple regions • Dedicated team for each process Business Solution Offered By TCS: • Transition Approach - Structured transition methodology adopted with focus of Process documentation, knowledge curve, efficiency & Quality output to run the bank activities. • Team Mix- Team consisting of Team members, Team Leaders and Ops Manager with a right mix up of graduates and post graduates with specialization in Finance. • IT Leverage – Strong synergy on the IT application side between the TCS teams on IT and BPO. Frequent interactions with IT team, that handles Deutsche Bank’s credit risk repository

Business Benefits: • Generation of accurate valuation statements in a timely manner • 22/5 coverage to provide a wide range of services to customers • Cross training imparted to curb team member dependency • Savings of approximately US$ 1Mn due to productivity improvements

Key Learning & Findings: • Expertise in application systems developed over a period of time • Process Improvements suggested

5 February 2007

Thank You

5 February 2007

Experience Certainty.