Industrialized Enterprise
Business Process Operations
Global transaction processing and decision support –
a future-proof ...
About Genpact ► Overview

A Global Leader In Business Process Services: Process
Transformation and Outsourcing, Analytics,...
The Challenge

© 2014 Copyright Genpact. All Rights Reserved.

3
Countering volatility with mature enterprise operations
Volatility requires agility of cost and decision-making

• Maintai...
Unprecedented volatility is a challenge and an opportunity –
Operations have a strategic role in both

Need to defend

A s...
Why volatility and surges are here to stay
Demand-side problems vicious cycle – consumer products example

Emerging
Global...
Why volatility and surges are here to stay
Demand-side problems vicious cycle – consumer products example
Alternative
Fuel...
The Solutions

© 2014 Copyright Genpact. All Rights Reserved.

8
Industrialized operations use specialized and advanced process,
people and technology practices

Analyti
cs
driven
proces
...
Industrialized operations use specialized and advanced process,
people and technology practices
Metrics
management(1)

Org...
Industrialized operations as extended enterprise
SIMPLIFIED

Business Partner

Business

• Services that require on-site
p...
Operating models and industrialized operations
Other management

TARGET
OPERATING MODEL

Operations

OUTSOURCED

RETAINED
...
Operating model choice depends on the objectives and the
additional impact of key levers
SIMPLIFIED
Corp
central

GBS
Capt...
Industrialized business process operations are increasingly
adopted and contribute to counter volatility
Strong emergence ...
Significant potential still exists for industrializing operations in
DIRECTIONAL
the Life Sciences* industry
Average # of ...
Significant potential still exists for industrializing operations
DIRECTIONAL
Industrial Manufacturing
Average # of FTEs

...
CPG

Significant potential still exists for industrializing operations
DIRECTIONAL
CPG* industry
Average # of FTEs
9%

R&D...
Software, Internet Services Companies

Significant potential still exists for industrializing operations in
DIRECTIONAL
Hi...
Contact Genpact to Explore
The “Art of the Possible”

© 2014 Copyright Genpact. All Rights Reserved.

19
About Genpact

Genpact Limited (NYSE: G) is a global leader in transforming and running business processes and
operations,...
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Industralized enterprise business process operations

  1. 1. Industrialized Enterprise Business Process Operations Global transaction processing and decision support – a future-proof business model architecture to combat volatility February 2014 Gianni Giacomelli CMO, Genpact www.genpact.com © 2014 Copyright Genpact. All Rights Reserved.
  2. 2. About Genpact ► Overview A Global Leader In Business Process Services: Process Transformation and Outsourcing, Analytics, Technology What we do We help leaders of some of the largest enterprises transform and run their processes and operations, including the very complex and industry-specific How we do it Our impact Unbiased, agile combination of process science, related technology and analytics limiting upfront costs and enhancing future adaptability We help enterprises to be more competitive by becoming more intelligent: adaptive, innovative, globally effective and connected… Right critical mass: we are large (62,000+ global staff) but our solutions appropriately flexible; our top management is directly involved in our client partnerships …by enabling tighter management of costs, risks, regulations, and growth enablement The results: US$22B* of impact for 800+ global clients *US$22B is a cumulative figure since 2006 © 2014 Copyright Genpact. All Rights Reserved. 2
  3. 3. The Challenge © 2014 Copyright Genpact. All Rights Reserved. 3
  4. 4. Countering volatility with mature enterprise operations Volatility requires agility of cost and decision-making • Maintaining cost structure (G&A, COGS) and asset intensity in line • Faster data-driven decisions and related, granular execution (e.g. budgets, S&OP, customer interaction in both developed and developing markets) But existing business process operations were built in less-volatile times, optimized for scale, and struggle with current requirements • Rigid cost structure • Little innovation aimed at supporting effective value chain decision making and execution The rapid rise of Global Business Services (GBS) hints at viable enterprise operation strategies • Industrialization of services: specialized and advanced process, people and technology practices • Decouple and scale operations, yet run end-to-end extended enterprises • Reduce and variabilize cost, increasing business effectiveness • More tasks and processes being in-scope © 2014 Copyright Genpact. All Rights Reserved. 4
  5. 5. Unprecedented volatility is a challenge and an opportunity – Operations have a strategic role in both Need to defend A shift in the “art of possible” will change operations • Developing markets largest new demand – but tricky to serve • “Granularity of growth” – micro verticals in developed markets • Volatility of demand and supply (talent, capital, materials etc.) • Regulations burden increasing (finance, environment) • Need to attack Explosion in structured and unstructured data: analytics savvy players compete better • IT in a flux - ERP, and BI/DW have not always delivered ROI, cloud offers promise but practices still evolving • Collaboration technology and practices inflecting right now • Scientific understanding of GBS operating models and process performance (cost, risk, quality) to serve key functions (finance, supply chain, run-the-bank, sales & marketing) Operations were designed for scale and cost – in today’s volatile environment, enabling the enterprise requires a new operations strategy and robust execution © 2014 Copyright Genpact. All Rights Reserved. 5
  6. 6. Why volatility and surges are here to stay Demand-side problems vicious cycle – consumer products example Emerging Global Middle Class • Global population expected to reach 8 billion by 2030, accompanied by a huge increase in the emerging middle class in economies like China and India • More people with more disposable income demand more energy, food, raw materials and consumer goods, driving prices up Energy • Growth in energy demand is expected to be 60% higher by 2030 • Roughly two times more than the rate of population growth • Supply is not keeping pace © 2014 Copyright Genpact. All Rights Reserved. 6
  7. 7. Why volatility and surges are here to stay Demand-side problems vicious cycle – consumer products example Alternative Fuels • Higher fossil fuel incent diversion of crops to use for gas additives and bio-fuels • E.g. corn for ethanol, soybeans for biodiesel - further increasing pricing for such commodities. Food • More people can afford to eat more, leading to higher long-term food and feedstock prices • Higher prices for grains, seeds, animal feed-stocks and other commodities lead to higher prices in staples like bread, milk, eggs, oils, flour, meats, poultry etc. Consumer Goods • Increased global demand for consumer packaged goods drives higher demand and prices for their commodity and raw material inputs • Higher fuel prices, and related higher transportation and distribution costs © 2014 Copyright Genpact. All Rights Reserved. 7
  8. 8. The Solutions © 2014 Copyright Genpact. All Rights Reserved. 8
  9. 9. Industrialized operations use specialized and advanced process, people and technology practices Analyti cs driven proces ses Optimization Superior metrics management Effectiveness Efficiency Cost Targete d org design and HR practic es Focused Technology © 2014 Copyright Genpact. All Rights Reserved. 9
  10. 10. Industrialized operations use specialized and advanced process, people and technology practices Metrics management(1) Org design and HR practices Labor Effectiveness Scale Technology(2) Efficiency Optimization Cost Analytical process science (1) cost structure, performance ERP wrappers and config, BI and big data, workflow, collaboration, social, mobile © 2014 Copyright Genpact. All Rights Reserved. (2) 10
  11. 11. Industrialized operations as extended enterprise SIMPLIFIED Business Partner Business • Services that require on-site presence or that directly impact the end customer experience Corporate Service Requirements GBS Performance Contracts Provide corporate governance and strategic guidance, establish policies • Processes requiring deep expertise in specific functional disciplines • Highly advisory in nature, may require frequent face to face Internal Partner Run processes efficiently, drive best practices and value • Rules-based processes common across business units • Significant process transaction volumes • Remote interaction with rest of business • Common systems infrastructure Source: Genpact experience © 2014 Copyright Genpact. All Rights Reserved. 11
  12. 12. Operating models and industrialized operations Other management TARGET OPERATING MODEL Operations OUTSOURCED RETAINED INDUSTRIALIZED OPERATION IN-HOUSE FINANCE FUNCTION GBS IN-HOUSE SUPPLY CHAIN FUNCTION REGION 1 REGION 2 CAPTIVE © 2014 Copyright Genpact. All Rights Reserved. OUTSOURCED 12
  13. 13. Operating model choice depends on the objectives and the additional impact of key levers SIMPLIFIED Corp central GBS Captive Labor arbitrage* BPO Limited Levers Business partner Process optimization Significant Absolute (FTE related, Infra, IT, G&A) Variability High-volume process Typical benefits Process effectiven. Cost benefits Economies of scale Custom, location & context dependent proc. Standardization Other benefits Ease of setup, management IP and business integration Compliance and control Market entry, scalability © 2014 Copyright Genpact. All Rights Reserved. *includes cost arbitrage, and availability of skills 13
  14. 14. Industrialized business process operations are increasingly adopted and contribute to counter volatility Strong emergence of GBS model… From F&A and IT, to multiple functions including decision and compliance support Beyond traditional lift-and-shift cost focus ….enables resilience Efficiency • Cost structure: leaner, more predictable, and easier to flex • Decoupling and global delivery of “industrializable” components • Better timeliness, accuracy, consistency • Stronger process and organizational metrics linked to business outcomes Effectiveness • Data-to-insight embedded into process • Finance ops (O2C, S2P, R2R) - best practices applied consistently globally, better scalability • Advanced use of collaboration technologies and practices • Sales & Marketing, supply chain data – transactional and analytics heavy lifting • In-house and outsourced mix continues to evolve • Across functions, ability to scale up and down geographies, accommodate M&A Benefits from • Scale (10X = 50% less cost per transaction) • Optimization (10-70% improvements) • Cost arbitrage (up to -70%) © 2014 Copyright Genpact. All Rights Reserved. 14
  15. 15. Significant potential still exists for industrializing operations in DIRECTIONAL the Life Sciences* industry Average # of FTEs % already industrialized % industrialization potential R&D 20% 15% 30% Procurement 40% Sourcing and procurement support 100% 10% Inventory and demand forecasting Product cost accounting 20% 50% 20% 5% 70% 25% 75% 50% 30% Back-office Support General Management Research support 65% 30% Manufacturing Distribution Customer Care Marketing & Sales % not applicable 4% 1% © 2014 Copyright Genpact. All Rights Reserved. 95% Industrialized Enterprise Ops Scope and Impact Logistics optimization 25% Contact center support Sales and Marketing ops and analytics support 20% All G&A support Decision and transformation support Source: Genpact Analysis, BLS *includes Pharmaceuticals and medicine manufacturers 15
  16. 16. Significant potential still exists for industrializing operations DIRECTIONAL Industrial Manufacturing Average # of FTEs % already industrialized % industrialization potential R&D 9% 1% % not applicable 90% 30% Procurement Industrialized Enterprise Ops Scope and Impact 10% Manufacturing 0% Research support, engineering services 60% Sourcing and procurement support 100% 0% Inventory and demand forecasting Product cost accounting Engineering Services Logistics optimization 25% Distribution Customer Care Marketing & Sales Back-office Support General Management Contact center support 5% 30% 25% 5% 70% 30% 70% 50% 4% 30% 95% 40% Sales and Marketing ops and analytics support 20% All G&A support Decision and transformation support 1% Source: McKinsey Research Institute, Genpact Analysis © 2014 Copyright Genpact. All Rights Reserved. 16
  17. 17. CPG Significant potential still exists for industrializing operations DIRECTIONAL CPG* industry Average # of FTEs 9% R&D Procurement 1% 30% 90% 10% Manufacturing 0% 60% 100% 0% 25% Distribution Customer Care Marketing & Sales Back-office Support General Management 5% 30% 25% 70% 30% 40% 5% 70% 50% 4% 1% % industrialization potential © 2014 Copyright Genpact. All Rights Reserved. 30% 95% % already industrialized 20% Source: McKinsey Research Institute, Genpact Analysis % business as usual 17 * includes metal products, rubber and plastics, printing and publishing
  18. 18. Software, Internet Services Companies Significant potential still exists for industrializing operations in DIRECTIONAL High Tech Companies* Average # of FTEs R&D 9% Procurement 1% 90% 30% 10% 60% Manufacturing 0% 100% 0% 25% Distribution Customer Care Marketing & Sales Back-office Support General Management 5% 30% 25% 5% 70% 30% 70% 50% 4% 1% % industrialization potential © 2014 Copyright Genpact. All Rights Reserved. 30% 95% % already industrialized 40% 20% Source: McKinsey Quarterly, Genpact Analysis % business as usual 18 * computers and office machinery, semiconductors and electronics
  19. 19. Contact Genpact to Explore The “Art of the Possible” © 2014 Copyright Genpact. All Rights Reserved. 19
  20. 20. About Genpact Genpact Limited (NYSE: G) is a global leader in transforming and running business processes and operations, including those that are complex and industry-specific. Our mission is to help clients become more competitive by making their enterprises more intelligent through becoming more adaptive, innovative, globally effective and connected to their own clients. Genpact stands for Generating Impact – visible in tighter cost management as well as better management of risk, regulations and growth for hundreds of long-term clients including more than 100 of the Fortune Global 500. Our approach is distinctive – we offer an unbiased, agile combination of smarter processes, crystallized in our Smart Enterprise Processes (SEPSM) proprietary framework, along with analytics and technology, which limits upfront investments and enhances future adaptability. We have global critical mass – 62,000+ employees in 24 countries with key management and corporate offices in New York City – while remaining flexible and collaborative, and a management team that drives client partnerships personally. Our history is unique – behind our single-minded passion for process and operational excellence is the Lean and Six Sigma heritage of a former General Electric division that has served GE businesses for more than 15 years. For more information, visit www.genpact.com. Follow Genpact on Twitter, Facebook, and LinkedIn. © 2014 Copyright Genpact. All Rights Reserved. 20

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