Everest Group PEAK Matrix for Banking BPO Service · PDF fileChange in TCS’ positioning...
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Everest Group PEAK Matrix TM for Banking BPO Service Providers Focus on TCS November 2014 Copyright © 2014 Everest Global, Inc. This document has been licensed for exclusive use and distribution by TCS EGR-2014-1-E-1306
Transcript of Everest Group PEAK Matrix for Banking BPO Service · PDF fileChange in TCS’ positioning...
Everest Group PEAK MatrixTM for Banking BPO Service
Providers
Focus on TCS
November 2014
Copyright © 2014 Everest Global, Inc.
This document has been licensed for exclusive use and distribution by TCS
EGR-2014-1-E-1306
2Copyright © 2014, Everest Global, Inc.
EGR-2014-1-E-1306
Everest Group recently released its report titled “Banking BPO – Service Provider Landscape with PEAK
MatrixTM Assessment 2014”. This report analyzes the changing dynamics of the banking BPO landscape and
assesses service providers across several key dimensions.
As a part of this report, Everest Group updated its classification of 23 service providers on the Everest Group
Performance | Experience | Ability | Knowledge (PEAK) Matrix for banking BPO into Leaders, Major
Contenders, and Emerging Players. The PEAK Matrix is a framework that provides an objective, data-driven,
and comparative assessment of banking BPO service providers based on their absolute market success and
delivery capability.
Based on the analysis, TCS emerged as a Leader and also a Star Performer. This document focuses on
TCS’ banking BPO experience and capabilities. It includes:
TCS’ position on the Everest Group banking BPO PEAK Matrix
Detailed banking BPO profile of TCS
Buyers can use the PEAK Matrix to identify and evaluate different service providers. It helps them understand
the service providers’ relative strengths and gaps. However, it is also important to note that while the PEAK
Matrix is a useful starting point, the results from the assessment may not be directly prescriptive for each
buyer. Buyers will have to consider their unique situation and requirements, and match them against service
provider capability for an ideal fit.
Introduction and scope
3Copyright © 2014, Everest Global, Inc.
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1 Business-to-Consumer relationships
2 Business-to-Business relationships
Retail financial services
(B2C1)
– Cards
– Retail banking
– Lending
Commercial banking (B2B2)
Banking
Investment banking
Asset management
Custody & fund
administration
Brokerage
Capital markets
Life & pensions
Property & casualty
Reinsurance
Insurance
Banking, Financial Services,
and Insurance (BFSI)
Note: This report covers vertical-specific BPO within the banking space. It does not include coverage of
horizontal business processes such as F&A, HR, procurement, and contact centers
Focus of this document
Everest Group’s definition of BFSI includes the
following three segments
4Copyright © 2014, Everest Global, Inc.
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Everest Group PEAK Matrix – 2014 banking BPO
market standings
Performance | Experience | Ability | Knowledge
1 Service providers scored using Everest Group’s proprietary scoring methodology given on pages 13 and 14 in the Appendix
Note: Analysis for Accenture, HP, and IBM is based on Everest Group estimates
Source: Everest Group (2014)
Leaders
Major Contenders
Emerging Players
Star Performers
Everest Group Performance | Experience | Ability | Knowledge (PEAK) Matrix for banking BPO1
Banking BPO delivery capability
(Scale, scope, technology solutions, delivery footprint, and buyer satisfaction)
Ma
rke
t su
ccess
Low High
Low
High
25
thp
erc
en
tile
75th percentile
75
thp
erc
en
tile
25th percentile
Emerging Players
Leaders
Major Contenders
TCS
Genpact
Accenture
Cognizant
Infosys
Wipro
Sutherland Global ServicesEXLHCL
WNSIGATE
Tech Mahindra
Xchanging
SyntelPolaris
Dell
CSC
Mphasis
Equiniti
Xerox
Serco
IBM HP
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TCS is a banking BPO Star Performer based on strong
forward and upward movement over time on the
Everest Group PEAK Matrix
Change in TCS’ positioning on the Everest Group PEAK Matrix for banking BPO
Market success in 2013
Added ~US$50 million (highest amongst providers) in
revenue
Won four new contracts across various geographies
Significant increase in contract size with engagement
of leading independent mortgage bankers in the
United States and marginal growth in other accounts
such as
– Citi
– A leading U.S. financial institute
– A leading payment processor and acquirer in
North America
Capability enhancements in 2013
Growth via addition of ~2,000 FTEs, specifically for banking BPO,
helped expand the delivery capabilities significantly
Expanded banking BPO delivery footprint at both offshore and
nearshore locations
Strengthened its capability to deliver judgment-oriented support
(such as analytics, regulatory compliance support, and risk
management) across its onshore, nearshore, and offshore locations
Source: Everest Group (2014)
Ma
rke
t s
uc
ce
ss
Major Contenders
2012
Leaders
TCS
Delivery capability
2013
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TCS is a Leader on the Everest Group PEAK Matrix for banking BPO
TCS (page 1 of 5)
Competitive position and assessment
Market share by region
North
America Europe
South
America Asia Pacific
Middle East &
Africa
17% 16% 59% 24% 48%
Market share by banking BPO line of business
Cards Retail Lending
Commercial
banking
20% 25% 18% 49%
Overall market share
By active contracts By FTEs By revenue
5% 23% 20%
Delivery capability assessment
Dimension Rating Remarks
Scale The largest scale in terms of banking BPO FTEs
Scope Broad-based scope in terms of geographies, LoB1,
and buyer segments
Technology
solutions
Deep technology expertise driven by industry
leading solutions such as BαNCS
Delivery
footprint
High leverage of offshore and nearshore but needs
to increase onshore presence too
Buyer
satisfaction
Enjoys the highest satisfaction ratings across levers
such as process and relationship management
High LowOverall remarks
TCS continues its good run as a Leader on the banking BPO PEAK Matrix and
also emerges as a Star Performer second year in a row, exhibiting strong growth
despite its large size
With consistently high scores across all the dimensions, focused offerings in high
growth areas such as analytics, risk management, and regulatory compliance
underpinned by technology and delivery footprint investments helps it succeed in
the market place
Although North America accounts for the largest portion of the revenue, TCS
also has a substantial presence in other major geographies
While large portion of TCS' capabilities continue to be centered around the
CGSL acquisition of 2008, it has been able to take some of its offerings to the
broader market as well
Smaller buyers, however, remain suspicious about getting the appropriate
attention from a large service provider such as TCS
Going forward, TCS would do well to break this image and, as a result, open
more avenues for sustainable long-term growth1 Line of business
Source: Everest Group (2014)
Banking BPO delivery capability
(Scale, scope, technology solutions, delivery footprint, and buyer satisfaction)
Mark
et
su
ccess
Low High
Low
High
25
thp
erc
en
tile
75th percentile
75
thp
erc
en
tile
25th percentile
Emerging Players
Leaders
Major Contenders TCSGenpact
Accenture
Cognizant
InfosysWipro
Sutherland Global ServicesEXLHCL
WNSIGATE
Tech Mahindra
Xchanging
SyntelPolaris
Dell
CSC
Mphasis
Equiniti
Xerox
Serco
IBM HP
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TCS (page 2 of 5)
Banking BPO overview
Recent acquisitions and partnerships
2012 – TCS and Mitsubishi formed a joint venture to
establish an IT, BPS, and infrastructure services delivery
center in Japan
2012 – TCS BaNCS signed an agreement with Savvis, a
CenturyLink company and global leader in cloud
infrastructure, for hosting and cloud-enabled core
banking, payments, and compliance
SAFE Act licensing for onshored mortgage originations
Recent developments
FORE™: Transformation model for business
Domain Academy for training resources on domain and
process skills, e.g., mortgages and trade
Suite of services
Commercial/wholesale banking
Commercial real estate
Consumer lending
Retail banking and investments / private banking
Cards
Risk management (operational risk, fraud and AML1)
Payment
2011 2012 2013
Revenue (US$ million) 375 400 450
Number of FTEs 13,200 14,200 16,100
Number of clients 11 16 20
Company overview
Tata Consultancy Services (TCS) is an IT services, consulting, and
business solutions organization. TCS’ extensive experience with diverse
BFS organizations has helped it to develop in-depth domain expertise
across all banking subproducts.The offerings span consumer banking and
corporate business including retail banking, cards, loans, trade services,
cash management, and capitals markets (includes wealth & asset
management and investment banking). TCS also offers platform solutions
for specific business functions
Key leaders
Abid Ali, Global Head, Business Process Services
Dinanath Kholkar, Head, BFS & INS, BPS
R. Ramakrishnan, Head, Banking, BPS
Headquarter: Mumbai, India
Website: www.tcs.com
1 Anti-money laundering
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35%
23%
23%
19%
TCS (page 3 of 5)
Banking BPO – capabilities and key clients
Key banking BPO engagements
Client name LoB Region Client since
United Arab Bank Cards, retail banking, and commercial banking MEA 2010
Bajaj Financial Services Ltd Retail banking APAC 2010
Citi Cards, retail banking, lending, and commercial banking Global 2008
Banco Pichincha Retail banking and lending South America 2007
Commercial banking
South
America
APAC
Banking BPO FTE mix by
segment
FTEs in numbers
Banking BPO revenue mix by
geography
Revenue in US$ million
Banking BPO FTE split by
delivery location
FTEs in numbers
Retail
banking Offshore
100% = 16,100
Cards
Lending
Onshore
Nearshore
MEA
North
America
Banking BPO number of
contracts by buyer size1
Number of active contracts
Medium
82%
16%2%
55%
16%
12%
12%5%
47%
29%
24%
Europe
100% = 450 100% = 16,100 100% = 20
1 Buyer size is defined as large (>US$10 billion in revenue), medium (US$5-10 billion in revenue), and small (<US$5 billion in revenue)
Note: Based on contractual and operational information as on December 2013
Source: Everest Group (2014)
Small
Large
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TCS (page 4 of 5)
Banking BPO technology solutions/tools
Business process modelling / simulation / process
optimization using software of major enterprise architecture
provider
Workflow imaging leveraging a leading big data solution
partner
Desktop automation & workflow optimization using
OpenSpan
Fraud management solution leveraging third-party Complex
Event Processing (CEP) solution
Risk analytics: Fraud analytics, anti-money laundering
analytics, default / NPA / portfolio risk, and credit loss
strategy
Financial insights: Acquisition / divestiture strategy and
hedge fund analytics
Customer insights: Channel & sales strategy
Market insights
Spend analytics
Business process management, current state & gap
analytics
TCS BαNCS financial services product across BFSI
Reconciliation platform (BPaaS) across BFSI
Payments platform (BPaaS) and payments collections
Platform (BPaaS), retail banking, and cards
Social media
– Insight solutions
– Customer intimacy solutions
– Collaborative solutions
– Enterprise integrations
Mobility
– Strategy consulting
– User experience design and testing
– Application development and security
– Integration with advertisement network
Banking-specific solutions/tools Analytics
Platform/cloud Social media and mobility
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TCS (page 5 of 5)
Banking BPO location landscape
Cincinnati
Guadalajara
Quito
Santiago
Gurgaon
MumbaiBangalore Chennai Manila
Kolkata
Gandhinagar
PuneDoha
Medellin
Source: Everest Group (2014)
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Appendix
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Top Quartile performance
across market success
and capability2nd or 3rd quartile
performance across market
success and capability
4th quartile performance
across market success
and capability
High
Low
25
thp
erc
en
tile
75
thp
erc
en
tile
75th percentile
Ma
rke
t s
uc
ce
ss
(Ba
nkin
g B
PO
reve
nu
e a
nd
clie
nts
)Everest Group Performance | Experience | Ability | Knowledge (PEAK) Matrix1
Emerging Players
Leaders
Major Contenders
Banking delivery capability
(Scale, scope, technology solutions, delivery footprint, and buyer satisfaction)
Low High25th percentile
Everest Group classifies the banking BPO service provider
landscape into Leaders, Major Contenders, and Emerging
Players on the Everest Group PEAK Matrix
1 Service providers scored using Everest Group’s proprietary scoring methodology
13Copyright © 2014, Everest Global, Inc.
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Measures success achieved in
the market. Captured through
banking BPO revenue and
number of clients
Service providers are positioned on PEAK Matrix based
on evaluation across two key dimensions
Emerging Players
Leaders
Major Contenders
Ma
rke
t s
uc
ce
ss
Measures the scope of
services provided across
buyer size, LoB, and
geographies
Measures the capability
and investment in tools
and technologies that
help deliver better
services
Measures the delivery
footprint across regions
and the global sourcing
mix
Measures ability to deliver services successfully
Captured through five subdimensions
Measures the scale of
operations (overall
company revenue,
number of FTEs, etc.)
Scale Scope Technology Delivery footprint
Delivery capability
Measures the satisfaction
levels1 of buyers across:
Business driver
Implementation
Process expertise
Relationship
management
Buyer satisfaction
1 Measured through responses from referenced buyers for each service provider
Source: Everest Group (2014)
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Additionally, Everest Group confers the “Star Performers”
title to providers that demonstrate the strongest forward
movement over time on the PEAK Matrix
2014 banking BPO
Star Performers
Year 1
Year 0
Service
provider
Ma
rke
t s
uc
ce
ss
Delivery capability
Methodology
Everest Group selects Star Performers based on the relative YoY movement of each service provider
on the PEAK Matrix
Market success dimension
In order to assess advancements on market
success, we evaluate the performance of
each service provider on the PEAK Matrix
across a number of parameters including:
Yearly ACV growth
Number of new contract signings
Value of new contract signings
Delivery capability dimension
In order to assess advancements on
capability, we evaluate the performance of
each service provider on the PEAK Matrix
across a number of parameters including:
Annual growth in scale
Increase in scope of services
Expansion of delivery footprint
Technology- / domain-specific investments
The Top Quartile performers on each of the
specified parameters are identified and the
“Star Performer” rating is awarded to the
service providers with:
The maximum number of Top Quartile
performances across all of the above
parameters and
At least one area of Top Quartile
performance advancement in either of
the dimensions
The “Star Performers” designation relates to YoY performance for a given service provider and
does not reflect the overall market leadership position. Those identified as “Star Performers” may
include “Leaders”, “Major Contenders”, or “Emerging Players”
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Does the PEAK Matrix assessment incorporate any subjective criteria?
The Everest Group’s PEAK Matrix assessment adopts an objective and fact-based approach (leveraging service
provider RFIs and the Everest Group’s proprietary databases containing providers’ deals and operational capability
information). In addition, these results are validated / fine-tuned based on our market experience, buyer interaction,
and provider briefings
Is being a “Major Contender” or “Emerging Player” on the PEAK Matrix an unfavorable outcome?
No. PEAK Matrix highlights and positions only the best-in-class service providers in a particular functional/vertical.
There are a number of providers from the broader universe that are assessed and do not make it to the PEAK
Matrix at all. Therefore, being represented on the PEAK Matrix is in itself a favorable recognition
What other aspects of the PEAK Matrix assessment are relevant to buyers and providers besides the “PEAK
Matrix position”?
The PEAK Matrix position is only one aspect of the Everest Group’s overall assessment. In addition to assigning a
“Leader”, “Major Contender” or “Emerging Player” title, Everest Group highlights the distinctive capabilities and
unique attributes of all the PEAK Matrix providers assessed in its report. The detailed metric level assessment and
associated commentary is helpful to the buyers in selecting particular providers for their specific requirements. It
also helps providers showcase their strengths in specific areas
What are the incentives for buyers and providers to participate / provide input to the PEAK Matrix research?
Participation incentives for buyers include a summary of key findings from the PEAK Matrix assessment
Participation incentives for providers include adequate representation and recognition of their capabilities/success in
the market place, and a copy of their own “profile” that is published by Everest Group as part of the “compendium of
PEAK Matrix providers” profiles
FAQs (page 1 of 2)
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What is the process for a service provider to leverage their PEAK Matrix positioning status ?
Providers can use their PEAK Matrix positioning in multiple ways including:
– Issue a press release declaring their positioning/rating
– Customized PEAK Matrix profile for circulation (with clients, prospects, etc.)
– Quotes from the Everest Group’s analysts could be disseminated to the media
– Leverage the PEAK Matrix branding across communications (e-mail signatures, marketing brochures, credential
packs, client presentations, etc.)
The provider must obtain the requisite licensing and distribution rights for the above activities through an
agreement with the designated PoC at Everest Group
FAQs (page 2 of 2)
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