Intern report.docx

Department | 6/17/2014 | © Robert Bosch Engineering and Business Solutions Limited 2014. All rights reserved, also regarding any disposal,
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INDEX
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1. History of Outsourcing
2. Introduction
3. BPO in India
4. Company Overview providing BPO services
5. Procurement Outsourcing
6. BPO business models
7. Business Opportunities in India
8. About BOSCH (RBEI)
9. Report Findings (Suggestions and Approach)
10. Current Trends
11. Future Prospects

1. HISTORY OF OUTSOURCING
3
 Started in 1700s during Industrial revolution.
 Services outsourcing to India started in 1980s.
 To focus on their core competencies.
 PO started in 1997-98.

2. INTRODUCTION
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1. OUTSOURCING
 It is defined as shifting company’s day
to day operations to an external service
provider .
 It is contracting out of business process
to a third party.
 It is the concept of taking internal
company function and paying an
outside firm to handle them.

5
2. OFFSHORING
 Relocation by a company of a business
process from one country to another.
 Operational process, such as
manufacturing, or supporting processes,
such as accounting.
 LOW COST COUNTRY SOURCING.
 Different from Outsourcing.

6
3. BPO
 Subset of outsourcing.
 Contracting of the operations and responsibilities of specific business
functions.
 Can be categorized as back office and front office outsourcing.

3. BPO IN INDIA
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1. GROWTH
 2.8 million people work in outsourcing
sector (2012).
 Annual revenues are around $11 billion,
around 1% of GDP.
 India- world's favored market for BPO
companies.
 A steady rise in GDP from 1.2% to 5.4% - contribution of BPOs.
 1997-98: US$ 4.8 billion.
 2006-07: US$ 47.8 billion .
 Current rate of growth is 28%.

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India is now the world's favored market for BPO companies, among other
competitors, such as, Australia, China, Philippines and Ireland.

9

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2. Phases of BPO
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Bandwagon Phase
(1990-2000)
Big Bang Phase
(1980-1990)
PHASES OF BPO
Barrier less
Organization
2000 onwards
Based on cost cutting.
Transactional
outsourcing, aimed
directly at cutting and
reducing operational
costs.
Cost cutting and
capability
management. primarily
aimed at acquiring
resources that are or
insufficient internally.
Organizational
transformation
organization in to a
more dynamic, efficient
and focused unit.

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3. Types of BPO
 Customer contact (customer relations management)
 Finance/Accounting
 Equipment
 Human resources
 Logistics
 Procurement/Supply chain management
 Security
Some of the most common areas for outsourcing services are
professional services like accounting, purchasing, legal, information
technology support and other specialized services. Other areas being
outsourced is document, utility, insurance, secretariat, consulting,
healthcare, manufacturing, news and media services.

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Services being provided can be vertical or horizontal in nature.
 BPO horizontals are function-specific and could spread across
different industry domains. Payroll processing services, data
processing services and tax solutions are examples of horizontal
BPO.
 Vertical BPO concentrates on functional services in specific industry
domains such as manufacturing, retail, financial services and
healthcare.

4. COMPANY OVERVIEW
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1. INFOSYS
Overall services can be divided in to three category:-
 Business services
 Technology services
 Outsourcing services

Outsourcing services covers the areas such as: -
 Application outsourcing
 Infrastructure outsourcing
 Business process outsourcing
 Sourcing and procurement
 Customer service
 Finance and accounting
 Human resources
Working models like PPM(Process Progression Model) and VRM(
Value Relationship Strategy), and tools like SCCT(supply Chain
Control Tower ) has been in use.

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Sourcing and Procurement practice
It delivers significant business value through strategic sourcing and
spends management to the challenges such as:
 High cost of service delivery
 Paucity of strategic sourcing skills, domain and category expertise
 Lack of measures to deal with economic shocks and market volatility

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They offer end-to-end solutions from pure-play transactional
processes to high-end services such as:
Operational sourcing and tactical buying
A strong mix of onshore, near shore and offshore sourcing support
teams help in day-to-day operational sourcing and tactical buying
services.
Procurement operations and help desk
From scanning and processing invoices, to making proposals, and
ensuring a smooth month-end closing of finances, procurement
operations cover it all.

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Category management and strategic sourcing

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2. COGNIZANT
Different types of services provided by this company are :- analytics,
application services, business process services, consulting, customer
relationship management, digital business services, engineering and
manufacturing services, IT infrastructure services, quality
engineering and supply chain management.
They focus on getting all the services of a company i.e working on
vertical services like Banking, financial, communication, healthcare,
media and entertainment, life sciences, insurance, retail and travel &
hospitality.

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Considering the supply chain services it follows certain steps to provide
satisfactory services :-
 Supply Chain Transformation services

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 Supply Chain Planning Services

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 Supply Chain Execution
Warehouse
management
Logistic
Management
Distr. Order
Management
Inventory
Synchronization
Supply
Collaboration

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3. TCS
TCS’ services currently organized in to following service line:-
 Application development and maintenance (42.80%);
 Asset leverage solutions (2.70%);
 Assurance services (7.70%);
 Business process outsourcing (12.50%);
 Consulting (3.00%);
 Engineering and Industrial services (4.60%);
 Enterprise solutions (15.20%);
 IT infrastructure services (11.50%).

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Talking of the horizontal services it covers areas like: -
 Customer interaction management
 Human resources
 SCM and sourcing & procurement.
Some of the complementary services provided by the company are
supplier quality, spent analysis, compliance audits, supplier
development, supply chain analytics, optimizing sourcing and
procurement etc.

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Considering the SCM and sourcing& procurement the services span
the entire supply chain including the following:-
 Sourcing and procurement
 Spend analytics
 Product development planning
 Order management
 Contract lifecycle management
 Planning
 Manufacturing scheduling and forecasting
 Logistics and customer support
 Vendor relationship management
 Procurement technical help desk
 After market services

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4. GENPACT
 Genpact’s unique Smart Enterprise Processes (SEPSM)
methodology focused on business impact while safeguarding costs
and limiting initial investment .
Several Services it provides under the Automotive sector are as
follows:-
 Supply chain management
 Smart decision services
 IT consulting
 Auto finance services
 Human Resource services

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 Considering the supply chain management services it focuses on
providing the end-to-end procurement and supply chain services
and solutions to both direct and indirect material.
 End-to-end supply chain offerings include Forecasting & Planning,
Sourcing & Procurement, Logistics & Fulfillment and Service
Operations.
 It employs it‘s unique technology SEP to implement best in class
practices across procurement and sourcing organization, and is
supported by Six Sigma based Reengineering, domain expertise,
superior solution design and execution.

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Sourcing and Procurement services consists of :
 Sourcing and category management (Spend Analytics, Negotiation
and Contracting, Sourcing evaluation)
 Direct materials (make or buy decision)
 P2P transaction processing (Requisition to PO issue, Expediting, Ad
Hoc Spot Buys, PO to Receipt to Invoice Reconciliation, and
accounts payable).

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5. ACCENTURE
The different services provided by the company can be divided in to two
category namely:-
 Cross Industry BPO Services
 Marketing
 Supply chain
 Sourcing and Procurement
 Industry Specific Services
 Accelerated R&D
 Credit services
 Health administration
 Health management
 Insurance
 Network
 Utilities

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It has got variety of offerings designed under Sourcing and
Procurement service as follows :
 Closed Loop Spend Management
 Dynamic Supply Management
 Diagnostics and Visibility:
 Sourcing and Category Management
 Supplier Relationship Management
 Risk Management
 Buying Operations/Procure-to-Pay (P2P)
 Workforce Transformation

The Supply Chain Services offering includes:
 Forecasting
 Sales and Operations Planning
 Promotions Planning
 Transportation Planning
 Replenishment and Inventory Management
 Order Execution and Delivery Assurance
 Spare Parts Planning and Management
 Warranty Management
 Predictive Asset Maintenance
 Direct Supply Management
 Supply Chain Control Tower
Procurement Value Measurement (PVM) and Joint Sourcing
Ventures (JSV) are helping them a lot in providing satisfactory
services to the customers.

6. WNS
WNS is a global business process management company offering
services such as Customer care outsourcing, legal services,
Procurement, Shipping and Logistics etc.
It delivers shared back office processes such as Finance and
accounting, customer care, legal, technology solutions and
procurement to industry specific back office and front office
processes. The services provided by them can be divided in to two
groups as:-
 Cross Industry solutions
 Industry specific solutions

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 They are exploring new procurement models, which include widening
the supplier base.
 They are partnering with procurement outsourcing providers in areas
like procurement analytics and procure-to-pay cycles.
 WNS‘ procurement outsourcing solutions include:-
• Supplier research and analysis
• Sourcing support and administration
• Contract management
• Market Intelligence
• Competitive Intelligence
• Procurement analytics(Spend Data Analysis and Management,
Cleansing, Maintaining and Format Conversion, Statistical Analysis
and Report Generation)

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7. HCL
 HCL comprises two publicly listed companies, HCL Technologies
and HCL Infosystems.
 Provides offerings in product engineering, custom & package
applications, BPO, IT infrastructure services, IT hardware, systems
integration, and distribution of information and communications
technology (ICT) products across a wide range of focused industry
verticals.
 Provides services to different Industrial sector such as Aerospace
and Defense, Manufacturing, professional services, Servers and
Storages, Financial services, Automotive, Media and Entertainment,
Retail and Consumer, Travel, Transport and Logistics.

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Supply Chain solutions combine deep strategic and operational
capabilities with experience in implementation-related consulting.
Their services include:-
 Advanced Planning & Scheduling,
 CPFR (Collaborative, Planning, Forecasting and Replenishment),
 Demand Planning/ Forecasting,
 Demand Management,
 Inventory & Prod Planning,
 Replenishment,
 Supply&Distribution Planning,
 Network Planning,
 Segmentation & Strategy.

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CPFR
 A business model that takes a holistic approach to supply chain
management and combines the intelligence of multiple trading
partners in planning and fulfilling customer demand by using
common metrics, language and firm agreements to improve
efficiency for all participants.
 Links Sales and Marketing best practices.
 Category management, supply chain planning and execution
processes to increase availability while reducing inventory,
merchandizing, transportation and logistics costs.

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 The diagram below shows the relationships of the three main players along with
the four phases.

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 In the field of Sourcing and Procurement the solutions it provides
are:-
 Benchmarking against the marketplace,
 Supplier Relationship Management,
 Spend Management
 Product Cost Engineering
 Supplier Cost Engineering
 RFX Management,
 Contracting and Negotiation Solutions,
 Procurement process improvement including e-Sourcing and
Procure-to-Pay solutions.

PO Market Standing
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5. PO- Fastest Growing BPO
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 Procurement Outsourcing was developed at the same time other
BPO’s were introduced but it now only the procurement sector has
shown a massive growth over the years.
 Since 2007, the PO market has maintained an 18% compound
annual growth rate in terms of Total Contract Value (TCV).

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 Healthier growth is expected for the procurement outsourcing
industry in the following five years.
 PO has much higher potential savings than any other BPO functions.
 Studying last few years of trend and growth in Procurement, we will
find that companies are looking at option of outsourcing their different
Procurement functions.
 Order management, Order fulfillment, Compliance management,
Logistics and Spend analyst is also something which companies are
looking to outsource.

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 Now the CAGR has reached at an average of 22% in the area of
Procurement Outsourcing.

6. BPO Business Models
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1. Global Delivery
Network
 Combines onsite, offsite, onshore
and offshore resources.
 To get optimal cost and labor
efficiencies
 A firm works round the clock.
 Also called Blended Outsourcing.

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2. Hybrid Model
 Dual-shore model.
 20% work is done onsite alongside
the clients team.
 80% work is done offshore.

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3. Multisourcing Model
 Hub & Spoke Model.
 Make use of multiple offshore supplier.
 Users of this model typically have their own offshore operations, plus
three or more partner outsourcing vendors with whom they collaborate.

46
4. Build-Operate-Transfer Model
 Based on idea of not outsourcing to third party vendor and starting
their own foreign subsidiaries.
 Contracts with an offshore partner to build a shared services and
operate it for a fixed interim period.
 Logic : the offshore partner can initiate operations and reach
operating stability much faster than it can with an in-house effort.

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5. Global Shared Services Model
 A centralized organisational unit that delivers services to multiple
business Units or functions.
 Consolidate organizations' internal service operations into mega-
service centers.
 Also called Offshore Insourcing or Captive Centers.
 Run as independent businesses with less of the control issues that
third-party BPOs face.
 Sometimes these centers are run with their own budget .

7.Business Opportunities in India
48
While looking at the prospect of doing business in India it would be
prudent to see what options are available to a Non Indian company
to invest in India. There are primarily two ways to approach:
 Having own set up
 Branch office
 100% subsidiary
 Joint Venture Companies
 Acquiring existing Indian Setups
 Outsourcing work to a local company

49
Variation of different business models based on
the geographic locations and the type of
ownership.

8. BOSCH
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1. INTRODUCTION
 Multinational engineering and electronics company headquartered in
Germany.
 more than 350 subsidiaries across over 60 countries
 Core products:-
Automotive components (brakes, controls, electrical drives,
electronics, fuel systems, generators, starter motors and steering
systems),
Industrial products (drives and controls, packaging technology and
consumer goods),
Building products (including household appliances, power tools,
security systems and thermotechnology).

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2. RBEI
 100% owned subsidiary of Robert Bosch GmbH.
 The services provided by RBEI to the Robert Bosch GmbH are as
follows: -
 Finance and Accounting
 Supply Chain
 E learning and animation
 Translation services
 Documentation and Technical writing
 Information Security

52
Procurement Outsourcing
Services for Procurement are divided in to two groups based on the
types of materials they are dealing with:
 Direct Procurement
Forecasting and Planning
Sourcing and Procurement
Logistics and Fulfillment
Supplier Governance
Aftermarket
 Indirect procurement
Order Management
Spend Cube
Category Management
Discount Calling

9. Report Findings
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Suggestions
1. Multifunction Provider (but good at procurement services).
2. Strengthening the Global Delivery Model and building out Delivery
Capabilities.
3. A company new to outsource its activities generally fragments its
activities in three areas to be focused
* Market and Business
*Product Architecture and Design
*Supply chain
In this case we may have two options
a.) Tie up with leading service provider.
b.) Tie up with other evolving service provider.

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4. A company new to outsource its activities generally goes for
Multisourcing provider (in 95% cases).
5. Make the client realize their savings in business areas (3 major
business areas)
 Sourcing and Category management
 Procurement (Source to pay) i.e working on
transactional savings
 Accounts Payable

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6. We may consider the research studies which highlights five of the best practices,
which enable world class procurement performance. They are:
 Strategic Alignment:- Coordinate with other functional areas of the business.
 Cross Functional Partnering:- High quality partnering initiatives are the key to
the development of the supplier base and the achievement of common goals,
such as enterprise level planning and the budgeting process.
 Complexity Reduction:- Reducing the complexity of supply bases, internal
processes and technology environments.
 Technology Enablement:- Improved IT enablement.
 Business Process Sourcing:- Use of best Procurement processes.

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7. Expanding and deepening the scope of spend influence as well as
supporting supplier- led product innovation and Supply Market
Analysis .
8. More focus on providing the services in the Indirect Spend category.
Companies engage themselves with the direct spend as they don’t
want to outsource any strategic elements with all strategy formed
internally.
9. Changing the PO Model can generate additional benefits and
possibilities of savings delivered in new environment. 83% 0f the
mature companies have recently changed the POM and are tending
towards a Center-led model.

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Savings are almost same it only differs with the maturity of the organization.
0%
5%
10%
Series 1
Savings
Series 1
De-centralized 6%
Centralized 5%
Centre-led 6%
Hybrid 6%
Chart Title

59

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How to approach?
 If a firm is going for New Product Design (NPD).
 If a firm is establishing its new plant at different location.
 At the time of renewal of budget (check for company following Zero
Based Budgeting).
 While approaching a client consider the “HALO Effect”
 Look for small clients at the starting.
 Take help of BEBS.

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 From the firm’s point of view, while they are looking for service
provider they generally check following points to approach a service
provider
 Past experience with the firm
 Personal contacts and recommendations
 Reputation in specific areas and functions
 Length of time the provider has been in the
community
 Advertising sample of work and references
 Price efficiency
 Understanding the needs and problems of the
clients.

10. Current Trends
62
 Current market analysis shows a
very little share of procurement
outsourcing.
 Today 70% of the BPO services
falls under the category of
Horizontal services.

11. Future Trends
63
 SCM BPO is expected to grow at CAGR of 12.5% over the next five years.
 Domestic BPM market is predicted to reach $2.47 billion by 2014.
 Rise in the vertical market (retail, shopping, shipping, healthcare etc.) as
compared to the horizontal services.
 More focus of the companies is for getting the vendors who can provide them
End-to-End processes .

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 Future growth of Procurement Outsourcing is expected to follow the following
trends:-
* Client relationship onshore will drive success.
* Procurement consulting firms will be challenged. Expectations are for
the consulting market to evolve as buyers will seek benchmarking
effectiveness rather than process or transformative consulting.
* Greater adoption of spread-technology in procurement outsourcing.
Technologies, such as Infosys’s client-developed platform and Capgemini’s
IBX platforms, look to transform procurement by providing a complete end-
to-end solution.
* Nearshore goes mainstream. Companies with strong offshore presence
are now actively placing some of their sourcing assets in Nearshore
locations.
* Domestic Sourcing becomes a Reality. Companies are bringing back
critical services and processes to their captive centers or onshore service
providers.

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 Shift towards BPM. The outsourcing industry is evolving from task oriented
BPO services to a platform-centric and outcome-linked BPM (Business
Process Management) model.
 Increased Services Transformation to MSM (Managed Service model).
Evolution of relationships with service providers beyond the traditional client-
vendor relationship to that of a business partnership as firms matures their
outsourcing activities.

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