Professional Documents
Culture Documents
Process Outsourcing
1
The BPO Hype Cycle
• Rising investments
• Explosion in # of
new entrants
• Market confusion
• Valuation spikes
• Market CAGR
estimates range
from 50% - 80% for
the next five years
Source: Gartner Group, “The Hype Cycle for IT Services”, June 6, 2003.
2
Long-Term Business Pressures Drive
More Outsourcing
3
Moving Up the Value Chain
Future
Business
Functions
Complex
Simple Processes
Processes
Source: Edelweiss Capital, “Business Process Outsourcing: Coming of Age?”, May 2003
4
The Evolution of BPO Models
Offshore Commodity
Offshore BPO
Transformational
Offshore BPO
Example: GE Capital
(Payroll Services)
Commodity Transformational
Onshore BPO Onshore BPO
5
Approaches to BPO
Source: Cognizant Analysis of Forrester Research Report: “BPO’s Fragmented Future”, August, 2003.
6
Emerging Offshore BPO Opportunities
Banking /
Financial Services Healthcare Insurance Other Verticals
• Transaction • R&D
• Medical billing • Insurance
processing • Equity Research
• Claims application
• Credit Card / processing & processing • Clinical Trials
Check adjudication • Claims • Revenue
processing
• Member processing & Accounting
• Loan processing management adjudication (Airlines)
• Mortgage services • Member • Engineering
processing • Medical management Design
transcription services
• Collections • Architecture
Contact centers, telesales/telemarketing, customer care, web sales and marketing, market analysis
Human Resources
8
Offshoring and Reengineering Can Lead
to Dramatic Performance Improvements
9
Opportunity for Value Creation - FDC
(FORMERLY AMEX INFORMATION SERVICES)
LOB Highlights
Source: FDC annual reports; industry articles; Datamation 10
Cognizant’s Initial Approach
Transformational Outsourcing
• Strategic Outsourcing
Decisions
• Highly Customized Service
Offerings
• Long-term Competitive
Advantage
11
Strategy To Drive BPO Decisions
Feasibility
Scope Discovery Analysis
Assessment
• Inventory key business • Identify root drivers of • Determine cost savings • Determine BPO structure
processes and current process costs and per business process model
SLA parameters inefficiencies based on task • Identify pilot
• Catalog support • Gather transaction migration and • Determine resource
technology platform volume data and improvement requirements
requirements and skill model across • Identify costs of • Identify changes to support
sets of support staff processes process migrations process in
• Map underlying • Identify any key onshore/offshore model
support systems sequencing needs
12
Cognizant Service Offering
Cognizant’s Business Technology Consulting Group in concert with its
vertical practices, works with clients in BPO strategy engagements
These engagements last from 8-12 weeks, depending upon scope typically
deliver:
• An assessment of suitability of select business process outsourcing
based on economics, integration with other processes, systems and
skill requirements