“KPO Sector in India”

Confidential – for internal use only

Prepared byJaspal Singh

Mrinal Agarwal

Contents

Introduction

Indian KPO Industry

Things should be remembered

Information Resources

Examples

Company and Industry Profile

What is KPO (Knowledge Process Outsourcing) ??

46%

26%

26%IT

BPO

KPO

Market Size (2010) CAGR

USD 17 billion

USD 40 billion

USD 57 billion

We are moving up in the value chain in the global outsourcing industry…

• KPO term was coined by Evalueserve’s Chief Operating Officer, Ashish Gupta, in September 2003, in an effort to differentiate between his firm’s services and those of the established BPO firms.

• It is different from a BPO jobs as you need to perform lot of analysis and prepare a project report for the same.

Contents

Introduction

Indian KPO Industry

Things should be remembered

Information Resources

Examples

Company and Industry Profile

4.4

6.3

8.8

11.2

0.26 0.410.72

1.08 1.542.18

3.05

2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11

The KPO Industry – Market Size

Indian KPO Industry – Total Sales, 2000-11(Figures in $ billion)

CAGR

42.4%

CAGR

36.5%

Indian KPO industry is estimated to reach $11.2 billion in revenue by 2010-11, from just $3.0 billion in 2006-07

Source: India’s Knowledge Process Outsourcing (KPO) Sector: Origin, Current State, and Future Directions” by Alok Aggarwal, Chairman, Evalueserve

9 1221

3042

5775

112

155

204

255

2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11

The KPO Industry – FTE (Full Time Employees)

Indian KPO Industry – FTE, 2000-11(Figures in ‘000)

CAGR

42.4%

CAGR

31.6%

Indian KPO industry is forecasted to employ 255,000 individuals by 2010-11, from just 75,000 individuals in 2006-07

Source: India’s Knowledge Process Outsourcing (KPO) Sector: Origin, Current State, and Future Directions” by Alok Aggarwal, Chairman, Evalueserve

The KPO Industry – India’s Share

Global KPO Industry – Total Sales, 2006-07(Figures in Percent)

Global KPO Industry – Total Sales, 2010-11(Figures in Percent)

100% = $16.7 billion100% = $4.4 billion

2006-07 2010-11

India would continue to maintain its leadership position in global KPO industry in the next 3-4 years

Rest of the

world

30%

India

70%

Rest of the

world

33%

India

67%

Source: India’s Knowledge Process Outsourcing (KPO) Sector: Origin, Current State, and Future Directions” by Alok Aggarwal, Chairman, Evalueserve

Service Lines

Market Research• Design, Conduct, Analysis of Surveys

• Experience of more than 15,000 surveys so far

• B2B surveys including

- Spending Decision Criteria

• B2C surveys including

- Consumer Preferences and Behaviour

- Decision Criteria

Intellectual Property• Patentability Assessment Search

• Technology Due-Diligence

• Patent Landscape analysis

• Patent drafting and filing

Data Analytics’ Research• Financial Modeling for Fixed Income and

Hybrid Instruments

• Market Risk Analysis

• Credit Risk analysis

• Asset Liability Management

• Usage Pattern Analysis

Investment Research• Valuation of public and privately-held companies

• Creating/ Updating/ Maintaining/ Auditing Valuation Models

Business Research Market Studies & Segment Analysis Commercialisation and Business Plans Company, Industry Profiles & Analysis Product & Value Chain Analysis Updating Databases & Existing Research Newsletters (outsourcing and off shoring,

telecom, financial services)

Data search, integration & management

29%

Biotech & pharma (contract research organisations, lead

optimisation, manufacturing

processes)18%

Engineering and design12%

Remote education & publishing

12%

R&D12%

Animation & simulation services

8%

Others9%

The 2010 Cake

How KPO Market will look like in 2010(Figures in Percent)

100% = $17.0 billion

Source: NASSCOM

KPO – Sub sectors

Description of Sub-segmentRevenue

(in Millions)No. of

professionalsRevenue

(in Millions)No. of

professionals

2006-07 2006-07 2010-11 (Expected)2010-11

(Expected)

Banking, Securities & Insurance Research $175 3,500 $600 12,000

Data Management, searching, & analytics $590 15,000 $2,500 60,000

Business & Consulting Research $125 3,200 $450 11,000

Human Resources - Research & Analytics $25 600 $120 2,500

Market Research & Comp. Intelligence $175 4,500 $460 12,000

Eng. Design & Architecture, CAD $315 8,000 $950 21,000

Game-design & Animation services $245 7,000 $900 22,500

Legal, Paralegal & Intellectual Property $95 2,500 $500 12,000

Scientific & Medical Content Publishing $165 400 $1000 2,000

Remote Education. Publishing, Tech. Writing $300 9,000 $1,000 25,000

Contract Res. Orgs, Biotech services $580 15,000 $2,500 50,000

Translation and Localisation $75 2,000 $360 9,000

Marketing & Sales Support, Answering RFPs $20 500 $150 3,000

Remote Logistic services & Procurement $40 1,100 $160 4,000

Network Optimisation & Analytics $125 3,100 $450 9,000

TOTAL $3,050 75,400 $11,200 255,000

Source: India’s Knowledge Process Outsourcing (KPO) Sector: Origin, Current State, and Future Directions” by Alok Aggarwal, Chairman, Evalueserve

The KPO Industry – Hot Destinations

Philippines

Chile

India

China

RussiaIreland

Poland

Hungary

The Czech Republic

Israel

The domestic KPO industry is facing stiff competition from countries like the Philippines, Russia, China, Poland and Hungary as these have qualified KPO professionals, low-cost, domain expertise, location advantage, sales and marketing capabilities and data compliance.

Strength Weakness

ThreatOpportunities

Domain Expertise

Small & Medium Enterprises in the US

Lack of human force in the US and UK

Large Talent Pool

Low Labour Costs

Success of BPOs

Quality Standards

Data Security

Rising Wages

Lack of infrastructure

IPR Act, 2005

High attrition rate

Supply gap

Qualified workforce

The KPO Industry - SWOT

SWOT

Major Competitors

0

2

4

6

8

10

12

0 2 4 6 8 10 12

Grail Research

Pipal Research

Adventity Knowledge Services

EvalueServe (EVS)

WNS Knowledge Services

Each KPO is uniquely positioned, offering different kinds of services as per their business model

Employees’ Compensation

Type

s of

Res

earc

h

The Smart Cube

Contents

Introduction

Indian KPO Industry

Things should be remembered

Information Resources

Examples

Company and Industry Profile

Things should be remembered

• You should have:

- Good knowledge of Microsoft Office

- Google searching techniques

- Report writing skills

- Creative and logical mind

- Curiosity to learn about new things

- Good reading skills

- Good knowledge of strategic management

- Good knowledge of marketing

- Good knowledge of financial ratios

- Knowledge to read a typical annual report

Contents

Introduction

Indian KPO Industry

Things should be remembered

Information Resources

Examples

Company and Industry Profile

Few examples of information resources for US market

Contents

Introduction

Indian KPO Industry

Things should be remembered

Information Resources

Examples

Company and Industry Profile

Company Profile

• Industry background and trends - Size and growth

- Key trends and developments

- Porter analysis (Five forces models)

• Business description and overview of operations- Company background

- Era analysis (time chart)

- Product description

• Strategy and assessment- Current strategy

- Future strategy

- SWOT

• Governance and management- Organization structure

- Brief bios

• Financial and market performance- Revenue, Operating profit and total assets

- Stock chart analysis

- Peer analysis

A company profile includes:

Industry Profile

• Industry background- Total industry size

- Key sub-sector

- Size and growth

• Key trends and developments

• PESTLE analysis- Political factors

- Economic factors

- Social factors

- Technological factors

- Legal factors

- Environmental factors

• Porter analysis (Five forces models)

• Key players- Top 10 players

- Brief profile

An Industry profile includes:

• HIGHEST PAYING KPO FIRMS

• Gold mans sachs bangaloreDeutsche bank bombayUBS hyderabadSBI capitalJP morgan chase bombayKotak bank bombayICICI bombayEvalueserve delhiGenpactWNSCopal partnersLehman brothers bombayLozenge Consultancy ServicesPatni Computer SystemsHutchison EssarHector & Streak