Professional Services – Global Trends                         Talent Practice                         Data | Analytics | T...
Introduction                     Professional Services consist of custom services for deploying and seamlessly integrating...
Key Trends in Global Professional Services Sector                           1. Location Strategy                          ...
Mexico City                         2. Virtual Jobs                     Virtual Jobs are generally performed either from a...
BFSI & Manufacturing continue to be the key verticals that SI’s play in today                                             ...
About Zinnov                     Founded in 2002, Zinnov – meaning Zeal in Innovation – provides solutions and advisory se...
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Professional Services - Global Trends

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Professional Services consist of custom services for deploying and seamlessly integrating a product into customer environment. Within services, Professional Services is a high growth, high margin opportunity for product companies owing to its high impact potential. Product companies have set up Global Delivery Centers and started to leverage cost and operational efficiencies. Global distributed delivery centers have evolved from a cost arbitrage focus to value delivery focus over time.

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  1. 1. Professional Services – Global Trends Talent Practice Data | Analytics | Technology | Network No part of this report may be quoted, or reproduced for distribution without prior approval from Zinnov LLC.al Zinnov Confidential http://www.zinnov.com info@zinnov.com
  2. 2. Introduction Professional Services consist of custom services for deploying and seamlessly integrating a product into customer environment. Within services, Professional Services is a high growth, high margin opportunity for product companies owing to its high impact potential. Product companies have set up Global Delivery Centers and started to leverage cost and operational efficiencies. Global distributed delivery centers have evolved from a cost arbitrage focus to value delivery focus over time. Key Drivers for increased Professional Services Globalization 1. Skilled Talent Pool Availability  Global locations have a substantial base of IT services & Systems Integration talent pool  India and China continue to produce a significant number of fresh engineers who are available to work for MNCs both in R&D and Professional Services 2. Evolved Customer Base  Customers of product companies are globalizing rapidly and expect their product vendors to globalize and support them accordingly  Product vendors are targeting Emerging Markets since Developed Markets are getting saturated 3. Tried & Tested Peer Models  Well tested global delivery models used by Software Product vendors as well as global SI’s have paved the way for the maturity of distributed delivery  Even supporting processes such as work selection and transition have grown in maturity 4. Mature Partner Ecosystem  All tier-1 and most tier-2 partners have matured to a great extent over the past decade, with very robust transition and delivery processes  Many partners are also capable enough to be channel partners in addition to delivery 5. Increased Margins  Fully loaded services FTE costs in emerging locations such as Brazil, India and China vary between half and one-third the cost in developed nations, still providing a significant contribution to the marginal Zinnov Confidential http://www.zinnov.com info@zinnov.com
  3. 3. Key Trends in Global Professional Services Sector 1. Location Strategy 2. Virtual Jobs 3. Driving Global SI Partnerships 4. Deputed Workforce Model 1. Location Strategy The selected locations can be categorized into three sub-categories - Predominantly Customer Locations, Purely Backend offices and both. Also, the categorization based on cost shows that Western Europe and USA are high cost regions, whereas Asia - Pacific is a low cost region. AMERICAS EMEA APJ Key Locations (Non-Exhaustive) (Non-Exhaustive) (Non-Exhaustive) Rio de Janeiro Munich Melbourne Predominant Customer Houston Milan Locations Vancouver Stockholm Riyadh Buenos Aires Budapest Kuala Lumpur Pure Back-end Offices Mexico City Moscow Hyderabad Santiago Prague San Jose (Costa Rica) Bucharest Bangalore Sao Paulo Cairo Beijing Both Johannesburg Manila Shanghai High Cost Locations Medium Cost Locations Low Cost Locations (Non-Exhaustive) (Non-Exhaustive) (Non-Exhaustive) Munich Houston Manila Milan Rio de Janeiro Shanghai Stockholm Moscow Kuala Lumpur Melbourne Santiago Beijing Vancouver Johannesburg Cairo Riyadh Sao Paulo Bangalore Prague San Jose (Costa Rica) Bratislava Bucharest Budapest Hyderabad Buenos Airesal Zinnov Confidential http://www.zinnov.com info@zinnov.com
  4. 4. Mexico City 2. Virtual Jobs Virtual Jobs are generally performed either from a home office or from a customer location. Technology companies are increasing utilization of virtual jobs model, as it offers benefits such as:  Reduction in office locations  Tapping high quality regional talent and utilize it wherever required, e.g., a customer far from existing locations of the company Roles Involved:  Global: Global virtual jobs involve working with global teams and therefore one can be assigned various locations depending on requirements. Expected Travel: 0% - 80%  Regional: Regional virtual jobs involve working with regional level teams e.g. Asia Pacific team. Therefore one can be assigned in a location in the region depending on requirements. Expected Travel: 0% - 60%  National: National virtual jobs involve working with national level teams and therefore one can be sent to work within the country. Expected Travel: 0% - 40% 3. Driving Global SI Partnerships Service providers are partnering with the pure play product companies to provide integration services. Large IT service providers are delivering services for global customers from places like India. India is home to 15% of all global software developers. Total India headcount of the Top 20 System Integrators is 886,000. Large SI’s deliver most of their services to the North American and European Markets 6.18% North America 6.00% 5.45% Western Europe 27.45% Asia Pacific Central and Eastern Europe 30.36% Middle East and Africa 24.55% Latin Americaal Zinnov Confidential http://www.zinnov.com info@zinnov.com
  5. 5. BFSI & Manufacturing continue to be the key verticals that SI’s play in today BFSI Manufacturing 15.20% 17.00% Retail Services 12.09% Healthcare 17.35% Transportation 4.15% 13.06% Communication Utilities & Construction 8.09% Government 2.76% 3.25% 7.05% Others 4. Deputed Workforce Model Most of the Service Providers follow the deputed workforce model to build their capabilities in customer geography. The employees are hired in the back offices and sent to the Client locations based on the project requirement.  Most of the companies follow the Deputed Workforce Model and have a dedicated management team in place to organize and streamline the deputation function  The resource is hired in the back office. These employees then travel from back offices to the Client location as per the requirement. The immigration process starts with the client sending the resource requirement to the Onsite Manager or the Business Unit Head.  The size of Deputation Operations team is based on the frequency and volume of employee deputation within a particular organization. The team comprises of personnel handling different functions within the deputation process such as travel, immigration, payroll, administration and coordination.  This team is further divided to manage the deputation for specific locations like the US, UK etc. This size is in turn dependent on immigration formalities required to be fulfilled and frequency of travel to a particular country  The employees are sent to the Client locations for short term or long term duration, depending on the project requirement. Most of the technical support work happens from the back offices.al Zinnov Confidential http://www.zinnov.com info@zinnov.com
  6. 6. About Zinnov Founded in 2002, Zinnov – meaning Zeal in Innovation – provides solutions and advisory services in the area of Talent, Global Sourcing and Emerging Markets Expansion to Fortune 1000 and reputed SMB companies. Zinnov’s Talent Neuron product is a web based tool that provides talent, cost, peer group benchmarking and location data. The insights, analytics and data driven intelligence empowers HR, Engineering, IT, Shared Services and Corporate Executives in developing/executing strategic, operational and transformation initiatives. To request a free trial, visit http://zinnov.com/US/index.htmlal Zinnov Confidential http://www.zinnov.com info@zinnov.com

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