Process Globalisation and Standardisation

Process Globalization and Standardization

© 2011 Copyright Genpact. All Rights Reserved.

Charles Hunting

CEO, Genpact Asia

14th Annual Asia Shared Services & Outsourcing WeekSingapore

Sep 7, 2011

Forces Reshaping The Global Economy

21 3

4 5

2

Five forces (crucibles of change) will restructure the world economy

Companies aligning to them will be best poised for shaping it

•Source: Mckinsey Report: “Global forces: An introduction”,

By Peter Bisson, Elizabeth Stephenson, and S. Patrick Viguerie (JUNE 2010 )


Irreversible Trends Continue to Drive Globalization of Services

Demographics

Working Age Population

• Japan

• UK

• US

• Scandinavia

• India

10% �

2% �

7% �

0% =

23% �

Globalization

Services

• Business

• Technology

• Engineering

• R&D

• Standardized,

consistent, value-Add

Talent Supply

Chain

• Virtual Supply

• Cost Pressures

• Partnerships

• Social Networks

• Domain Knowledge

Redefining Core

vs. Non-Core

• New economic realities

• Focus on productivity,preservation of cashand working capital

• Cost control / margin

improvement

• Converting capital to

3


Irreversible

TrendsAccelerating

Momentum

Ecosystems of

Expertise

Increasing

Client

Acceptance+ + =

• India 23% � consistent, value-Add• Converting capital to

operating costs

How Far Can it Go?

Anywhere, Everywhere

44

An Ecosystem of “Centers of Excellence”


What will be the Key Change required ?

…… „Business Process’ Thinking

Traditional

Operations FocusBusiness Process Focus

Organization charts

5

Organization charts

Budgets and P&Ls

Example : PHARMA DEVELOPMENT TO COMMERCIALIZATION

Formed a number of small, customer-focused business units to improve the way

in which the company anticipates and responds to patients‟ needs, and integrated

pharma development to commercialization into the business units …earlier

development and manufacturing were independent functions and cost centres


EF

FE

CT

IVE

NE

SS

What is the Key metric that will Change ?

Imperative to Focus On Operating Effectiveness and

Not Just Efficiency …. Different Roadmaps

Efficiency parameters

Process cost

Scale economies

Automation

Capacity Utilization

6

EF

FE

CT

IVE

NE

SS

Effectiveness Parameters

• Cycle time impact

• Cash Impact

• Revenue and Margin impact

• Flexibility

EFFICIENCYSource: The Hackett Group- Genpact supplier briefing


Strategic Imperatives For Next Gen Outsourcing

2

Interlinked Business Metrics

Think Core – Non Core

1

3

7

Knowledge Worker

Productivity


5

4

Productivity

Near Shoring & Re-badging

Best in Class Global providers

Input Output

1. Interlinked Business Metrics…...SEPSM

• SEPSM - Smart Enterprise Processes

• Appling Science To Managing Business Processes

vs.

Measure

Effectiveness

Approach

Best-in-class

Strategic

Proactive

Me

Benchmark

Competitors

Input Process 1 Process 2 Process 3 Output

Transform

Beyond the Organizational Silos

8

Input Output

vs.

Efficiency

Proactive

Reactive

• Functional optimization results in 10%-20% efficiency gains

• End to End process optimization results in 2-5X higher impact on outcomes

“Its heartening to see an end-to-end approach that promises bottom-line savings,

which is most important to me and my organization” CFO, Leading Wind Power Co.


Input Process 1 Process 2 Process 3 Output

Cu

stom

er

Cri

tica

l

2. Re-thinking Core/Non Core…

Who Is Best Placed To Drive Effectiveness In Different Areas

Non Core

Core

Retain

On Tap

SpecialistSupport

H

Strategic

Partnership

Smart -

Source

Branding,

Product

Development

& Customer

Retention

Tower

Infrastructure

Customer

Support

IT Software/

Hardware/

Services

Network

and Base

Station

A Leading Global Telecom

9

Cu

stom

er

Cri

tica

l

Core

Non Core

Scale of

ActivityHL

Eliminate/

Outsource

Source

A Leading Global Telecom

Company

Branding,

Product

Design

Distribution,

Sales

A Leading Apparel Company


700+ Manufacturing Partners

45 Countries

Ra

ng

e o

f fi

rm-l

evel

per

form

an

ce

14-6

2%

> 6

2%

< 1

4%

103. Knowledge Worker : Redefined Source of Competitiveness

Variation in firm-level performance

Top

Medical Services – Reduced Patient waiting

time by 50% through better scheduling

performers

Transportation – Improved service levels for

low demand parts from 74% to 90% through

right forecasting

Aviation – Ensured long term profitability and

Ra

ng

e o

f fi

rm

* Source: McKinsey


Bottom

performersPercent of knowledge workers

As the percent of knowledge

workers increases, the gap

between top performing firms

and bottom performing firms gets

wider

Aviation – Ensured long term profitability and

sustained cash flow by pricing 2000 contracts

ranging from $20MM to $5Bn per year

“Through 2012, more than 35 per cent of the

top 5,000 global companies will regularly fail to

make insightful decisions about significant

changes in their business and markets.”

– Gartner

114. Near Shoring & Re-badging

17 Countries | 51 Delivery Centers | 25 Languages | 51,000+ Employees

• Global foot print meets with Client‟s risk mitigation objective of

external outsourcing.

• Objective is to serve clients from locations that best meet their needs

taking into consideration their business Complexity, cultural diversity

and language skills & cost containment strategy

• Corporations divesting operations to a new entity hires these skilled &

experienced workers on its roles

• Drive seamless delivery and a singular service culture across the

global network – strong people practices & strong local management

Serving Clients Across the Globe – meeting their requirements seamlessly

!


Corp. 1

Businesses Global Service ProvidersCustomers

5. Best in Class Global Service providers…

Current Horizontal & Vertical Alignments are Limiting....

Corp. 2

1212

Corp. 3

Emergence of Global Service Providers


5. Best in Class Global Service providers……..

Corporations Will Need to Re-Align...

Businesses

Car Manufacturer 1

Manufacturing

Product Development

Supply Chain

Sales & Marketing

Customer Service

Finance & Accounting

Human Resources

`

Best-In-Class

Global Service Providers

Provider 1

Source-to-Pay

Request-to-Repair

Provider 2

Customer Service

Hire-to-Retire

3

Order-to-Cash

1313

Focusing on Core Capabilities to be BEST-IN-CLASS!

Outsourcing Non-Core to BEST-IN-CLASS Global Service Providers


`Insurance Corp 1

Originations

Underwriting

Risk Management

Policy Administration

Collections

Claims

Order-to-Cash

Record-to-Report

Operator 4

Billing-to-Disposal

Credit / Enterprise Risk

Operator 5

Application-to-Issue

Claims Notification-to-Closure

Redefining Our Industry: Whispers in the Corridors

Products - Sharper, productized offerings from Shared Services/

Outsourcing. Explicit investments in future delivery models. Cloud

enabled IT/BPR hybrid “Business utlility” offerings

Place – Serve clients from locations that best meet their needs.

Near Shoring, with a global delivery platform

Promotion - Moving from enablers to drivers of business outcome.

14

Promotion - Moving from enablers to drivers of business outcome.

Innovation and transformation becoming differentiators

• Price – Cost containment & lower TCO. Move from „headcount‟ to

„Pay per transaction‟ or outcome based overtime

• People - Industry specific competency development. Knowledge

worker with cultural and language skills


Thank You


[email protected]

14th Annual Asia Shared Services & Outsourcing WeekSingapore

Sep 7, 2011

Process Globalisation and Standardisation

Business

Transcript of Process Globalisation and Standardisation