Rohan Prabhu, University of Canberra & Matt Easdown, Wipro BPO - Lessons from a Global Perspective

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  • 1. Changing Paradigms of Shared Services Operations in an O Outsourced Model – L d M d l Lessons f from a Global Gl b l Perspective •Matt Easdown, CFO, University of Canberra •Rohan Prabhu, General Manager (APAC & ME) , Wipro BPO 1 © 2009 Wipro Ltd - Confidential
  • 2. Wipro Technologies Leading Provider of Information Technology, Business Process Outsourcing & Product Engineering Services Sustained Growth • Revenue of USD 6 Billion Revenue • CAGR of 34% over the last 5 years • Market Capitalization – USD 23.5 Billion • Listed in the NYSE, BSE and NSE, part of the NYSE’s TMT Index, NSE’s Nifty Index & BSE’s Sensex Partner to Industry Leaders Attract the Best Talent ients ees Employe Global Cli • 822 Clients • 102,746 Employees • 31 Clients added in Q3 2009-10 • 57 Nationalities • 191 Fortune 1000 / Global 500 Clients • 15000+ Employees based Onsite Global Presence Industry Expertise • 58 CoEs to develop Technology and Locations rtfolio • 35 countries in the Americas, Europe and Domain Accelerator solutions Asia Pacific regions g • Emerging Areas - Green, Cloud, Open Por • 53 Global Development Centers Source , Mobility, Information • 25 Nearshore Development Centers Management, Collaboration, Social Computing 2 © 2010 Wipro Ltd - Confidential © 2010 Wipro Ltd - Confidential
  • 3. One of the Largest BPO Service Providers Revenue Locations • Revenue: USD 395.33 million (FY 09- 10) • CAGR of 21.7% over the past 5 years • Ability to provide onshore, nearshore, offshore and hybrid delivery options • Operate in 26 centers spread over 11 countries • 25363 employees (31 March 10) • Robust policies to attract, motivate and retain talent • 75 clients (31 March 10) Employees Clients • Domain-driven solutions across industry verticals • Focused on delivering long-term benefits and measurable value through business process re engineering and re-engineering integrating technology with BPO Ranked 4th, Global Outsourcing Leaders 2010 3 © 2010 Wipro Ltd - Confidential
  • 4. University of Canberra Our Experience with Outsourcing & Offshoring 4 © 2009 Wipro Ltd - Confidential
  • 5. The University of Canberra story • Background – A few facts & figures • The Australian Higher Education sector – The Education Revolution – The Bradley Report • UC Challenges – Market challenges – 2007 Financial deficit • Reform Program – Strategic Plan - “the 39 Steps” the Steps “Step 4: Streamline our procedures and cost structures, making full use of information technologies and eliminating paper transactions wherever possible.” – Focus on developing a strong platform that will support growth but inelastic to local support costs
  • 6. AT Kearney’s review • Started as Process Simplification Project which developed into an Outsourcing Initiative g • AT Kearney engaged in to advise on process improvement options/streamlining. • ATK found : – Admin processes are tangled and create significant frustration – There are a large number of fragmented processes which are thinly resources or which lack access to specialist skills – Process inefficiency plus a lack of scale of economies pushes up internal costs
  • 7. Recommendations & actions • ATK recommended: – Outsource some IT and general admin business processes offshore ff h – Consider both onshore and offshore providers • July 08 - Commenced a detailed RFP process inviting local and offshore providers to participate. – 3 responses received – all from Indian providers – Detailed assessment process commenced – 2 trips to India by assessment team in 6 months • January 09 - WIPRO short listed and detailed negotiations commenced – TPI and Gilbert & Tobin engaged as negotiation and legal advisors
  • 8. Due diligence and execution • UC Council approved deal in Feb 09 • WIPRO’s Due Diligence March 09 – 2 weeks on site at UC k i – Agreed on phasing on functions • Contract signed June 09 for 5 years • What we have implemented: – Outsourced core transactional processes p • Finance (AP, AR, reconciliations, expense management) • HR (payroll, super, benefits) • Student Admissions (applications qualifications etc) (applications, – Outsourced core ITC support processes • Helpdesk, desktop support, server & infrastructure support , and applications development & support – Approach was generally “lift, drop and develop”
  • 9. Transition to steady state • T Transition – June 09 - WIPRO team on site for knowledge acquisition and transition management. – WIPRO staff then returned to Chennai and trained colleagues – UC staff visited Chennai to further train and validate processes. – Some UC processes were more complex and transition period extended. • Stabilisation – Wi Wipro responsible f all work, b could seek advice/assistance from ibl for ll k but ld k d i / i f UC as needed. – In some cases (Service Desk) stabilisation process was delayed and extra kknowledge acquisition required. l d iii i d – Stabilisation achieved from August 2009 to February 2010. • Steady State y – Steady State achieved by March 2010. – Wipro now have full responsibility for delivery.
  • 10. Lessons learnt • More complex work than expected, so additional learning time required. • C Context of the UC environment i essential f success. f h i is i l for Campus visits essential – particularly service desk. • Language/cultural differences ca t be ignored and need regular a guage/cu tu a e e ces cant g oe a ee egu a attention • Scope of Work documents need to be comprehensive • Generic processes transition well (eg: Finance), with more University specialist processes taking longer (Student Admissions) • ICT took longer due to the University IT environment and expectation gaps
  • 11. Conclusion • Working well • Needs consistent and focused management g • Future looking strong
  • 12. Q&A
  • 13. Thank You © 2008 Wipro Ltd - Confidential
  • 14. Wipro SSC Trends & Value Enhancement 14 © 2009 Wipro Ltd - Confidential
  • 15. Shared Services : Optimizing Value Enterprise End-to-End Process Visibility, Governance Transition from Centralization to full Value of Shared Services - Many Service/Cost optimization & organizations stop here leaving value Transparency behind and decreasing the likelihood Our services are targeted to of sustainability and scalability Performance Mgmt. ensure organizations remain NEFITS Metrics, Targets, Scorecards on track to achieve these milestones ANGE OF BEN SLAs Clear 2-way services agreed by customers Benefits of centralization recede RA Re-engineering Lack of Clarity Services, due to lack of shared Simplified, standardized Costs accountability for performance system/process and increase in shadow cost Traditional Culture - Tenure, New Location wages, back-office mentality over time Wage and real estate g arbitrage Exceptions Increase Consolidation Re-organization and de- layering Shadow Cost Increase CENTRALIZATION SHARED SERVICES
  • 16. Voice of the Customer What are YOU looking for? “Transformation” - Can BPO Outcome Managing Complex Vendor Gains beyond mere align to changing Regulatory and Consolidation Cost Savings business climate? Compliance Issues Volume SLAs are Shift in Priority – E.g. Multi Country Global Scale – inadequate & “Growth” in H1 10 to GST/VAT Language, proximity, outdated “Conserving Cash” in local biz needs H2 10 or Better Revenue YoY efficiency Consumer Exp Vs C E V Recognition norms Reduced Governance gains are table Cost of Service under IFRS/GAAP costs with Effective and stakes M&A leading to common dashboard Plethora of business SOX Compliance Will you facilitate apps: E.g. SAP in the Ability to shift work delivery of d li f company but Oracle/ across l ti locations Business Results? JDE in acquired org. Uniform quality Ability to redirect the standards processing engine Nimble Contract to facilitate this change Intelligent Outsourcing – NOT just “My Mess for Less” 16
  • 17. SSC Transformation – Approach Shared Services Transformation Opportunity Analysis Business Processes Applications Process Metrics Key Questions Addressed What are the current process gaps and therefore - opportunities for transformation? What are the short, medium and long term transformation initiatives? What is the projected ROI for the proposed investments? What will be the impact on my operations including people, process and technology aspects during & post transformation? What Change Management elements should be managed during transformation? What is the risk environment and the organization appetite to absorb risks? What are the steps to achieve the transformed state? Key Deliverables Impact Analysis & Transformation Opportunities Right Sourcing Opportunities Benefit Case Application Rationalization, 360 View on unrealized benefits Onsite Delivery v/s Near shore Automation, Benchmarking, from Shared Services Delivery v/s Off shore Delivery ROI & Benefit Summary Transformation Blueprint
  • 18. Wipro BPO Transformation – Story of Last 2 Years • Expanding the Range of Back Office Services Global Multilingual P2P, R2R, O2C Voice Non-Voice Largest 3Rd party provider Securities BO 31% 48% Integrated HRO Solution - Pay Per Drink 69% 52% Pharma Covigilence Marketing Non- Voice Master Data Management Voice LPO • Investing in Technology Innovation and Domain Expertise Acceleration Empowering BackOffice with Effectiveness Base))) Efficiency Transparency Compliance • Global Footprint – added 12 Centers from Adelaide to Curitiba Philippines 1100+ Central Europe 5 Centers in Eastern Europe 900 + Cover all major languages 97% + Local hires People US Australia Brazil Near shore solutions for US and Australia 200+ 200+ 150+ Location Achieving Functional Goals , Not just Process Efficiencies 18
  • 19. Illustration : Value Addition Beyond Just Savings Scenario: 100 strong team for Order Management Function for $ 1 Bn business. Great “Business as Usual” Outsourcing from a low cost location will: Value Add From Wipro BPO $0. 9 Mn Save $ 2.2 Mn on a cost base of $ 6Mn B Improve process accuracy by 10-30% $0.7 Mn Cut backlog of pending orders m $2.5 Mn Move over to “Transformational Outsourcing” to get all the above PLUS: e Cut DSO by 5-15 days - saving $ 2.5 Mn in Cost of Capital Prioritizing Processing for Orders by complexity/lead time to manufacture. Cut WIP and FG inventory by 5% saving $ 0.7 Mn Cutting down inventory Write off by 2-3% $ 0.9Mn g y y Standard BPO Improved adherence to Customer Required Delivery (CRD) lead time – Improved CSAT Ensure high value orders are cleaned and logged in time for predictable revenue $2.2 Mn guidance – priceless!! g p More benefits depending on the customers needs 19
  • 20. Proven and Specific Transformational Initiatives • $3.85 million recovered from Citibank by effective follow—up—stop payments recovery(Leading Semiconductor manufacturer) Impacting Business Metrics • Recovered 100% early payment discounts from vendors , $300K in 6 months - (Leading Process Control Manufacturer) • Bank reconciliation - Open items >45 days worth £ 17.44 million brought down to zero (Large UK based Telecom Service Provider) • Reduction of open items (Employee reimbursement) by 85% (Leading Semiconductor manufacturer) • C ll ti Collections of GBP 904 C ll t d against t f Collected i t target of 540 GBP (UK T l t f Telecom S i Service Provider) • Collections - Annual Saving of 4 MM with HC Reduction from 104 to 58 (UK Telecom Service Provider) • 1M GBP upside in revenue by raising credit note and recovering money billed by partners for ceased circuits Delivering Savings beyond labor • The client had >17M debt of carrier partners in query and Wipro helped resolve arbitrage >95% of debts (Large UK based Telecom Service Provider) • Implemented “Duplicate Payment Check” tool (Large UK based Telecom Service Eliminating work Provider) through automation • Effort reduction in MIS reporting due to base))) implementation. Cost savings worth 100,000 USD approx. (Global Aerospace Giant) Delivering • Supporting upgrades / implementation of New ERP systems with minimal Integrated IT & BPO disruption to services (Leading Oil manufacturing company & Energy and Utilities operations company)
  • 21. Thank You © 2008 Wipro Ltd - Confidential