presentazione

© 2007 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice

Technology for better business outcomes

Off shoring – In shoring cosa conviene decentrare?

Giorgio Capellani HP EMEA

2 April 10, 2023

Contents• Business Process Outsourcing• Data Center Transformation

Off shoring: BPO

4 HP Confidential-Subject to use restriction

Background

HP’s Business Process Outsourcing

Service

• Consulting: Strategic Business Assessment, BPO and Shared Service Center assessments and set-ups

• BPO solutions:− Finance & Administration− Order-to-Cash− Procure-to-Pay− Acquire-to-Retire− Record-to-Report− Buy-Sell Services− Decision Support/ Analytics

Heritage/ Background

• Over 10 years F&A outsourcing experience, starting with Strategic Outsourcing

• Over 15 years global shared services experience in F&A

• Commercialized shared service assets

• Strategic outsourcer for various large multinational/global enterprises from multiple industries

Customer Focus

• Large, Global Enterprises• Core industry verticals:

− Consumer Packaged Goods (CPG) / Retail

− Manufacturing / Automotive

− Financial Services− Hi- Tech

Quick Facts

• Global Delivery Operations: − 10 Global Delivery Centers− 56 Regional/ Local Centers

• All operations ISO9000-2001 certified

• World class Operations led by deep domain experts

− Quality: ~100 Black Belts, ~3000 Green Belts

− 22 dedicated Industrial engineers that lead process standardization/re-engineering

− Team of 26 experts that design and monitor Business Continuity & Controls


Integrated Financial Supply Chain

F&A transformation delivered through HP BPO’s transformation drivers

5

Value delivery

4

Technology enablement

3Operational excellence

2

Economies of location 1

Economies of scale

HP BPO Transformati

on Levers

• Lower per unit cost• Subject Matter Specialists• Better Labor Utilization• Investment Amortization

• Co-location• Centralization• Labor Arbitrage• Languages• Disaster Recovery• Talent Pool

• Standardization• Business Process

Reengineering• Six Sigma Plus• Straight through

Processing• Compliance/

Business Controls

• Metrics/KPIs

• Paperless/Digitization• Automation• Self Service• Data communication• Service Oriented

Architecture• Innovative Apps

• Analytics/ Business Intelligence

• Reporting• Business consulting


Our F&A BPO services PortfolioEnd to End Finance & Administration

• Accounts Payable• Accounts Receivable

Order-to-Cash CRM Support

• Travel and Expense Administration

• Fixed Asset Management

• General Ledger• Treasury Accounting• Tax Accounting

• Customer Administration

• Order Processing• Billing• Invoicing

Order-to-CashRevenue Cycle

• Revenue Collections and Dispute Resolution

• Credit Analysis & Approvals

• Cash Application• Reconciliation &

Reporting

Procure-to-PayProcurement

Support• Supplier

Administration• Requisition Creation• PO Processing• P-Card

Administration• Error Correction

Procure-to-PayPayment Cycle

• Master Data Maintenance• Invoice Processing and

Approval Routing• Goods and Services PO

Matching (Two & Three Way)

• Payments Administration• GL Accounts Settlement

Acquire-to-Retire

• Capital Budgeting• Leasing• Purchasing

Administration• Fixed Assets• Physical Inventory• Project Accounting

Record-to-Report• General Ledger• Bank Operations• Treasury Accounting• Consolidations• Inter-Company

Accounting & Oversight• Management Reporting

Buy Sell

• Price masking for strategic commodities

• Adherence to contractual agreements

• Allocation Management during market shortages

• Managing price volatility

Decision Support/ Analytics

• Business research and market intelligence

• Modeling & optimization• Performance analysis

and reporting• Data and design support

C

ore

Serv

ices

En

d-t

o-E

nd

Serv

ice

Exte

nded S

erv

ices


HP BPO Global Delivery Footprint

America Centers [Colorado Springs & Houston]

Global Delivery HubsLow-Cost, Transaction Processing Center[Bangalore (2), Chennai, Costa Rica, Wroclaw]

Global Delivery/ Support CentersSpecialized Language Transaction Processing [Guadalajara, Barcelona, Bucharest, Singapore, Dalian]

Scale of Operations:~10375 professionals

Presence: 10 Global Business Centers56 Regional/Local Centers

Language capabilities: Expertise in 30 languages

LegendsSupport Centers Onshore Centers

Main Global Hub


HP’s Fifteen-Year Shared Services BPO Journey

1990s 1995s 20052000

1990

Decentralized

2005

CommercializationDigitization

1995

RegionalConsolidation

2000

Off-Shore Global Consolidation

Consolidated general accounting processes into country-based shared services

• Consolidated regional service centers into four regional centers

• Focused on improving, standardizing processes

• Focus on improving transaction processing automation and self-service

• Focus on taking expertise to the market

Consolidated regional centers into a global trans-action processing model with centers in low-wage locations


About India• Well functioning , vibrant

democracy; Largest in the world (1.05 bn)

• Second largest pool of scientists and engineers in the world after the U.S.

• Third largest investor base in the world

• Well developed economic, capital & legal framework; Over 6000 companies listed on the stock exchange

• Real GDP Growth over 6% for last 4 years

5.7

3.32.7

0.8 0.7 0.4 0.3 0.2 0.2 0.1

0

1

2

3

4

5

6

7

Chin

a

Japan

India

Kore

a

Indonesia

Thaila

nd

Phili

ppin

es

Mala

ysia

Hong

Sin

gapore

PPP Adjusted GDP, US$trillion

9.1

6.2 5.94.6 4.4 3.9

3.22.4 2.1 1.7

0

2

4

6

8

10

12

Chin

a

India

Phili

ppin

es

South

USA

Costa R

ica

UK

Canada

France

Germ

any

Real GDP growth rate

PPP Adjusted GDP (USD trillion)

2004 estimates – SOURCE: CIA World FactBook


Indian Economy – some key numbers • Services, largest component

of GDP and growing• A growing working

population (500 million)− Reduced dependant ratio

− Favorable Urbanization trends; 35% urban population by 2020

− Incomes increasing across the board

• Shift towards younger population− Under 25 will go up as a

percent of total population

Shift in GDP Composition

0% 20% 40% 60% 80% 100%

FY80

FY05E

Agriculture Manufacturing Services

SOURCE: India Economics Report, Citigroup

Demographic Shift

-10%

10%

30%

50%

<10 10-19 20-49 50-69 >69

Age group

SOURCE: Industry Sources


India continues to be an important destination

Factors India China Malaysia Czech Republic

Singapore

Philippines

Financial Structure (Scale: 1-4; 4 is the Best)

Compensation 3.19 3 2.5 2.24 0.91 3.14

Infrastructure cost 0.23 0.23 0.33 0.27 0.22 0.22

Tax and regulatory 0.3 0.09 0.26 0.13 0.34 0.23

Sub Total 3.72 3.32 3.09 2.64 1.47 3.59

People Skills and Availability (Scale: 1-3; 3 is the Best)

BPO experience 1.03 0.48 0.19 0.23 0.61 0.42

Size & availability of labour 0.47 0.6 0.02 0.01 - 0.08

Education 0.25 0.21 0.27 0.33 0.33 0.19

Language 0.21 0.07 0.14 0.17 0.25 0.14

Employee retention 0.13 - 0.11 0.18 0.17 0.11

Sub Total 2.09 1.36 0.73 0.92 1.36 0.94

Business Environment (Scale: 1-3; 3 is the Best)

Country risk 0.83 0.68 1.03 1.06 1.41 0.57

Country infrastructure 0.2 0.15 0.24 0.28 0.4 0.13

Culture adaptability 0.1 - 0.28 0.38 0.43 0.05

Security of Intellectual Property 0.18 0.1 0.22 0.3 0.39 0.17

Sub Total 1.31 0.93 1.77 2.02 2.63 0.92

Total 7.12 5.61 5.59 5.58 5.46 5.45SOUCRE: NASSCOM 2005


Bangalore, Capital of Karnataka

Background

IT / ITES Destination

Infrastructure

With over 33% of the world’s SEI-CMM Level 5 companies having a presence in Bangalore, it has gained the epithet of the ‘Silicon Valley’ of India and was ranked 4th as a global hub of technological innovation by the UN Human Development Report

The presence of top-end technology institutions such as the IISc., IIIT and ISRO, coupled with a pleasing climate, active policy incentives, and manpower availability are the other strengths of Bangalore

Bangalore is located on the southern Deccan Plateau is India’s fifth largest city

The city is famed for its excellent climate with pleasant weather conditions round the year

Well connected by land and air

Strong educational infrastructure with 4 universities, 42 engineering colleges, 64 science colleges, 209 pre-university schools and 1,177 high schools

Among the largest real estate market in the country for office space during with over four million square feet of A-grade office space ready for possession


Chennai, Capital of Tamil Nadu

Background

IT / ITES Destination

Infrastructure

Chennai has about 8.8% of the BPO-ITeS facilities operating in India employing around 30,000 people directly

Based on success of remote IT services (largely for banks) , Chennai has attracted attention for back-office processing support for companies in the financial services, healthcare and consumer goods sector

The government of Tamil Nadu has now identified Chennai as the hub for the IT / ITeS industry in Chennai

Chennai is located on the eastern coast of IndiaIt enjoys tropical maritime climate (warm, humid) Chennai city covers 172 sq km and has a population of over 6.4 million

Chennai has a population of approximately 6.4 million with over 100 colleges

According to the UNIDO, Chennai has the highest density of software professionals in India

Chennai has a large concentration of Chartered Accountants required for high-end finance and accounting work


HP’s Presence in India

*Source: NDTV Profit Leadership Awards, Business Today and Hewitt Associates Survey

HP leverages over 28,000 people in India

• •India is HP’s 2nd

largest employee base

in the world

•HP voted the

number 1 IT Company

in India*

•HP ranked as 3rd Best

Employer in India*

Domestic

Global Services

Others9,200

HP India1,500+

Product Engineering

Services 2,500

IT Services 18,500

BPO 6,000+


Overview of HP BPO in IndiaWind Tunnel Center, Bangalore

HP Prime, Bangalore

Business Center, Chennai

Processes delivered – HR services, Supply chain management, Sales & marketing operations

Key characteristics−Houses HR Services−Language Center of Excellence

Processes delivered - supply chain management, sales & marketing operations

Key characteristics

−Handling business critical processes directly impacting company revenue

−Houses the Language Center of Excellence

Processes delivered – finance & administration Key characteristics

− Main finance & accounting processing center; end to end finance & accounting processes

− Key commercial client delivery center in India

− First center to be BS7799 certified

1862

2005

2221


Size and Scale of Operations

Purchase Order Administration

Claims mgmt

Rebates mgmt

Contract Admin

Order Fulfillment

Channel Partner Operations

TreasuryAccounting

AccountsPayable

Fixed AssetsInventory & Revenue

Accounting

Account Receivables

Customer ResponseCenter

Master Data Maintenance

Intra CompanyAccounting

7.5 M invoices processed $56.2 B

payout

Asset Base - $6 B 1.8M invoices processed

$50.4 B applied

487K queries handled

150K accounts/locations updated

360 K transactions annually

Orders entered - $30 B

$600M rebates paid to channel partners

$69B applied to Netting entries

$ 6 B of claims processed

Maintain 32000 partner contracts

and profiles

POs for 244,500 orders

Payroll /HR

Lead Gen.

96,000 pay-slips per annum

Global Business Centers India

4M work units per annum

$ 210M of lead value


Talentrecruitme

nt90% of hires have recent

accounting or finance degrees

HP culture orientation

Fun @ WorkMotivated Workplace

Learning & Development

Personal Growth

AndA Learning

Organization

Performance Driven CultureRewards & Recognition

Perf. IncentivesLeadership

Advancement Program

Solution

Result More than 100% growth every year,

lowest attrition rate in the

industry – 20%

New Employee Orientation

“Metamorphosis”

Buddy SystemSocial

Committee

E-LearningStretch

assignmentsBPO University

Key employee attrition rate is less than

5%

Our people - “ Making a Difference”


BPO is a strategic component of the Adaptive Enterprise vision

Driv

ing b

usin

ess p

roce

ss innovatio

n

Adaptive Enterprise

Infrastructure

Applications

Transformation Strategy

Business Processes

Finance &

Admin

HumanResources

Demand Mgmt

Supply Mgmt

Dri

vin

g o

pera

tional effi

cienci

es

Network

Rationale

• Customers who want to optimize

business processes require

increasingly tight integration with

applications and infrastructure

• Leverage all of HP’s capabilities,

from infrastructure through

transformation strategy

• Business process level serves as

strategic control point for

applications and infrastructure

levels


Information Security & Privacy

Business Continuity

World class operations

Quality

(1) National Institute of Quality & Reliability, India: “Best Six Sigma Project Award” in 2002, 2003; International Quality & Productivity Center: “European Six Sigma Excellence Award” in 2004

• All Global Business Centers ISO certified

• Six Sigma philosophy fully embraced (in most centers 75%+ employees are trained in Six Sigma)

–4 out of 5 managers quality trained

–Black belt trained and certified - 110, Green belt trained and certified - 3882

• Recipient of several quality awards(1)

• Over $20 M USD in preventive savings

• ~99% first pass accuracy

• Confidentiality agreements to protect information

• Dedicated area with separate access control

• Dedicated IT network with firewall

• Regular 3rd party audit• Dedicated resources to

maintain and update

• Industry standard, tested BCPs

• Strategies plan for different risks (fire, war, SARS, earthquake, computer viruses, etc.)

• Maximum allowable downtimes

• Maintain business critical operations during crisis

• ISO 17779 Certification

Statutory Compliance Intellectual Property Fortified Infrastructure

Operational Excellence Program

5

Value added service

5

Value added service

4


4


3Operational effectiveness


2

Economies of location

2


Economies of scale

1

Economies of scale

HP BPOTransformation

Levers

Operations Excellence…


World class operations

Business Controls & Compliance Industrial Engineering

• Manage operational, branding and financial risks due to both external & internal factors

• External regulatory requirements – Sarbanes-Oxley– Basel II– SAS 70 certification

• Internal process standards requirements

– Business ethics– Periodic audits and reviews– Self assessments

• Optimal scheduling of resources to standardize processes & optimize costs

– Over USD 2 million annualized saving

• Uses various techniques like process mapping, volumetric studies, efficiency and utilization tracking etc.

– Covered over 80% processes within BPO

• Experienced team of industrial engineers at each center

– 24 dedicated Industrial engineers across delivery centers

Minimized Risk Business Agility

Operational Excellence Program

5

Value added service

5

Value added service

4


4




2

Economies of location

2


Economies of scale

1

Economies of scale

HP BPOTransformation

Levers

Operations Excellence…

In shoring: Data Center Transformation

22 April 10, 2023

The IT Challenge

32 Million2006 worldwide IT labor force

65%of IT budgets to operations

Not enough investment in innovation ; too much in maintaining legacy infrastructure

23 April 10, 2023

The HP IT mission• Provide good information to

enable better business decisions• Significantly reduce the cost of

IT while delivering more to the business

• Lower risk to the enterprise with better control of the infrastructure

• Be a showcase for enterprise customers

24 April 10, 2023

HP IT 2005: Large scale and scattered

IT 4+% IT 4+% of of

revenuerevenue

<50% of <50% of resources resources

time time dedicated dedicated

to to innovationinnovation

750+ 750+ data data

martsmarts

100+ HP 100+ HP IT sites IT sites

in 53 in 53 countriecountrie

ss

5,7005,700applicatioapplicatio

nsns

85+ 85+ data data

centers centers in 29 in 29

countriecountriess

Under-Under-managed managed networknetwork

>1,240 >1,240 active IT active IT projectsprojects

30% IT 30% IT managmanaged by ITed by IT

~19,000 IT ~19,000 IT professionaprofessiona

lslsincluding including

contingent contingent workforceworkforce

25 April 10, 2023

HP top 5 IT initiatives

DataCenters

PortfolioManagement

World-ClassIT

ITWorkforce

Effectiveness

Enterprise Data

Warehouse

26 April 10, 2023

HP data center transformation strategy• Enable IT to be more nimble and provide better information • Provide more dependable, simplified operations• Enable faster delivery of new technologies, services, and

information• Accommodate growth • Provide for improved business continuity• Significantly reduce IT costs

27 April 10, 2023

HP data center transformation includes…

• Technology refresh• Standardized technology

environment• Retirement of legacy

applications • Next-generation data center

build out −State-of-the-art infrastructure

for today and tomorrow

−Automated monitoring and control

• HP Dynamic Smart Cooling• Real business

continuity/disaster recovery

28 April 10, 2023

HP IT mission: Streamlined and focused

~500 active ~500 active business business

projects at any projects at any given timegiven time

90% HP 90% HP employeesemployees

10% CWF10% CWF

~1500~1500applicationapplication

ss

< 30 HP IT core < 30 HP IT core collaboration collaboration

sites WW sites WW

80% of 80% of resources’ resources’

time time dedicated dedicated

to to innovationinnovation

Optimized,Optimized,cost-cost-

effective & effective & secure secure

networknetwork

% of % of revenue revenue

cut in halfcut in half

6 NGDCs in 6 NGDCs in 3 zones3 zones

1 EDW1 EDW100% IT 100% IT

managed managed by ITby IT

29 April 10, 2023

HP IT steps to success• Simplify through standardization: Standard & consistent data

center architecture and design; standard hardware, tools, and infrastructure

• Establish PMO for governance: Provides framework for how effort will be structured, who will make decisions

• Go modular: Allows for fast build, flexibility, scalability, and efficiencies; isolates and separates risk

• Break plan into bite-size chunks: Divide into cycles, engage proper expertise, identify clear goals & deliverables by quarter

• Synchronize—timing is everything: Facilities must be ready to receive servers; servers must be ready to receive applications

• Define one set of processes: A properly documented single set of processes aligned to ITIL V3 model ensures desired outcomes, allows for automation

• Actively manage and communicate change: Change management and well-executed communication strategy critical for success

30 April 10, 2023

Can HP’s experiences help you?• What percentage of your resources are spent on

innovation vs. support?• How many IT sites and data centers do you have? • How many next generation switches are you running?• How many applications do you support?• What is the availability of your business critical

applications?• Are your IT sites VOIP-enabled?• How much does your IT cost?

We can help. Let’s get started.

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