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Global Business Services – Are youmaking a difference by being different?EY Point of ViewThe better the question. The better the answer.The better the world works.

India – #1 GIC DestinationIndia is the No.1 destination for Global In House centres, with over a 1000 centresacross the countryWorld’sfastest growing and 7th largest economyMostHolds aboutOne of theattractive FDIdestinations in the world55% of overall global business servicesYoungest country in the world byBPM exports at2020 with median age of 29Second largest pool of Englishspeakers in the worldmarketUSD 26 billion and growing 8%At least8-10x lower cost BPMservices than source countriesWorld’s largest pool ofemployable graduates slated to rise to more than 45 million by2024Over100 Tier II/III cities poisedfor growth, expected to provide significantfillip to the BPM industrySource: Planning Commission of India, NASSCOM Strategic Review 2017Business Process Management/OutsourcingPage 2November 18Global Business Services – Are you making a difference by being different?

The Indian GIC landscape has been evolving over yearsG I C MARKE T I N I NDI AUSD BillionITBPM GIC set up has accelerated in recentpast. More than 220 firms have setupGICs in India since last 7 years IT and R&D GICs have grown revenuesat 9-10% annually A number of factors have contributed tothis, including Human capital Cost leadership Robust enabling environment Presence of other GICs/SI centers ADM remains the main focus area for ITGICs; However, the scale and scope ofwork managed by GICs is now expandingto support the parent company’s digitalinitiatives R&D GICs are evolving from basicengineering services to providing digitalengineering services (creation of smartproducts and platforms)R&D14.212.911.85.86.24.75.35.7FY1 6FY1 7FY1 8 E5As on 2017R&D# GICs# Talent of GICsITO900 500 380 326,000 350,000 200,000Source: NASSCOM Strategic ReviewPage 3BPM

India – #1 GIC Destination (contd.)Over half of the global GICs are in India, accounting for 79% of global GIC employees AmexRBSMacquireXL CapitalBarclaysHoneywellHewitt Microsoft R&D McKinseyKnowledgeCenter British Airways Mercer G4SBNP ParibasDieboldExperianColgateDeutscheBank Nomura Morgan leads in terms ofemployees with a median size ofStanleyMerrill LynchBarclaysBankKuoniCredit SuisseAvivaBNY MellonVodafoneMaerskEatonHoneywellMetroKolkata AvayaOption oneGlobal LogicFairchildCredit SuisseBarclaysVolkswagenErnst & YoungIBMDell/EMCTescoSiemensAXAFidelity over 850 people HSBC GEMumbaiPune of the global GICs are inIndia, accounting for 79% ofglobal GIC employees BFSIDelhi / NCR 50%TargetNetAppHoneywellCaterpillarJP MorganChaseChennaiproximity to manufacturing, accessto niche or low cost talent, etc. Maersk RBSHapag Lloyd World BankFord SiemensShellStandardChartered World Bank Xerox Paypal GICs exploring Tier II/IIIlocations like Ahmedabad,Coimbatore, Vadodara, due to Polycom Microsoft Bank ofAmerica Wells Fargo GE UBS DuPontHyderabadBengaluru Business models shifting from ‘Costplus' to 'Transaction based’ GICsevolving as Centres ofExcellence (CoEs); India home tomore than100 CoEsSource: Ernst & Young Research, NasscomPage 4November 18Global Business Services – Are you making a difference by being different?

India – #1 GIC Destination (contd.)India is likely to continue to remain the most attractive offshoring location in thecoming yearsOffshoring attractiveness(by dia12.711.512.5523Financial AttractivenessCountry1BangaloreIndia2Manila (NCR)Philippines3MumbaiIndia4Delhi nk1.222.072.75Top offshoring destinations (cities)41.19567People skills & availability8Business EnvironmentSource: 2016 Tholons Top 100 Outsourcing Destinations, A.T. Kearney Global Services Location Index, 2016Page 5November 18Global Business Services – Are you making a difference by being different?

Evolution of GICsThe focus of today’s GICs is ‘value creation’ through increased emphasis on the digitalagenda and right sourcing models Performance“Value Creation”Head of Global Business Services“Efficiency”GLOBALHead of Global Business .Procure.Procure.ITITSalesHead of Multifunctional Shared o it”AmericasEMEIAOrder to CashAPACRecord to ReportServices“Customer Service”FinHRProcurementProcure to PayHire to RetireGlobal Business AnalyticITSales ITGlobal Process OwnersEnd-to-End Process SolutionSalesService Delivery NetworkCore business ProjectsBPO, Hybrid SolutionsValue Added ServicesService ManagementMaturity1. FunctionalShared Services Individual functions managedin discrete country/regionalShared Services centers Each shared center reportingdirectly to a functional orregional lead2. Multifunctional SharedServices Two or more classic functions combinedin regional Shared Services centers Service management frameworkorganized per region and/or function Centers and/or functions reporting intoregion and/or global functional leadsContinuous improvements measured andreported3. Global Business Services(GBS) All functions integrated in one globalservice organization with a globalconsistent service managementframework Focus an cross functional efficiencies Page 6November 184. Advanced Global BusinessServices Wide range of fully integrated value andservices defined the way the enterpriseunderstand them Organized by services/ end-to-endprocesses and not longer by functionsGlobal Process Ownership implemented Extend service scope but servicemanagement still done per functionServices are fully integrated into globalenterprise processes and business Analytical and value added services Head of GBS is a part of or reports directlyto the C suiteFunctional services report into one GBSleaderGlobal Business Services – Are you making a difference by being different?

Trends in GICsTomorrow’s GICs, will focus on optimizing service delivery, leveraging digital &automation, data analytics & reporting, customer service and evolving talent & skillsCore BusinessThe future of GBS is a .1multi-functional organizationwith a diverse set of serviceofferings – or even solutions 2 managed through a globalgovernance structure 34 leveraging a mix of deliverymodel options enabled by latest “state-ofthe-art” technology Global GovernanceValue CreationSLAsGBS OrganizationMulti-functional Service FrameworkGrowDeliverSupportCustomer Acquisition toRetentionProduce to DeliverAsset Acquisition toRetirementInnovation to TransformationOrder to CashHire to RetireData to Business InsightProcure to PayCompliance to SocialResponsibilityRecord to ReportValue ChainValue frominnovation5 in order to become a trustedpartner of the enterprise Delivery Model6 and drive value to theorganization.Technology EnablementPage 7November 18Financial ContributionCenter of ExcellenceInfrastructureCost savings fromcommoditizationShared Service CenterBusiness ProcessOutsourcingApplicationDataGlobal Business Services – Are you making a difference by being different?

High level operating model of an IT GICCorporate ntInternalCustomersCenter StrategyOperations (CoreService and ProjectDelivery)ENABLER FUNCTIONSProcurement/FinanceOutsourcingVendorsPage 8KEY PROJECTSDigital & CloudService MgmtAutomationApp. Portfolio Mgmt.QualityManagement

Seven majortrends playingout in IT GICsPage 9

1COMPETENCIESPMO/TransitionRevisit the centerstrategy and align withbroader changes inglobal IT driven byDigital and other forcesCenter StrategyOperations (CoreService and ProjectDelivery)CoEInnovationKEY PROJECTSDigital & Cloud Service MgmtAutomationApp. Portfolio Mgmt.ENABLER tyManagement Page 10Major changes in technology,regulations, competitive landscape andbroader economy are creating constantflux in the overall strategy of theorganizationThis is leading to high volatility in theglobal IT functionThe IT GICs are continuously fine-tuningtheir strategy to remain relevant in thenew environment

2COMPETENCIESPMO/TransitionBuild competencies andcapacity around new agesolutions/technologiesand position as driver ofchangeCenter StrategyOperations (CoreService and ProjectDelivery)CoEInnovationKEY PROJECTSDigital & Cloud Service MgmtAutomationApp. Portfolio Mgmt.ENABLER tyManagement Page 11Global organizations are focusing ontransforming the Enterprise IT withvarious types of projects in areas suchas Digital, Cloud, Software DefinedInfrastructure, Automation andApplication Portfolio ManagementIT GICs are proactively building skills,PoC and thought leadership to lead (orat least be part of) these transformationprojects

3COMPETENCIESPMO/TransitionStreamline the coreactivities and harmonisethe operationsCenter StrategyOperations (CoreService and ProjectDelivery)CoEInnovationKEY PROJECTSDigital & Cloud Service MgmtAutomationApp. Portfolio Mgmt.ENABLER FUNCTIONSTalentFinancePage 12Procurement/OutsourcingQualityManagement Due to the boot strapping nature of theway GICs evolved, the core operations ofthe centers remain disparate andinharmoniousGICs are now looking at streamlining theoperations, focusing on servicemanagement (e.g. defining the servicecatalogues) and preparing the groundwork for Automation

4COMPETENCIESPMO/TransitionBuild in-housecapabilities forAutomation with focuson service improvementand capability buildCenter StrategyOperations (CoreService and ProjectDelivery)CoEInnovationKEY PROJECTSDigital & Cloud Service MgmtAutomationApp. Portfolio Mgmt.ENABLER tyManagement Page 13In partnership with service providers,GICs are actively deploying RPA andITPA technologiesThey are also enabling cross-functionalautomation in partnership with otherfunctions (e.g. HR on-boarding leadingto access right authorization)The main objective for automation inGICs is service improvement andcapability building (and not cost)

5COMPETENCIESPMO/TransitionPartner with externaleco-system to innovateand improve the valuedeliveryCenter StrategyOperations (CoreService and ProjectDelivery)CoEInnovationKEY PROJECTSDigital & Cloud Service MgmtAutomationApp. Portfolio Mgmt.ENABLER tyManagement Page 14There is a major attempt to repositionthe GICs from capacity oriented hubs toinnovation hubsTo drive the innovations, the GICs arepartnering with the external ecosystemconsisting of start-ups, universities andresearch organizationsThe next frontier is to monetize theinnovation attempts into more tangibleoutcomes

6COMPETENCIESPMO/TransitionFocus on transformingthe skill sets of thetalent base andimproving people supplychainCenter StrategyOperations (CoreService and ProjectDelivery)CoEInnovationKEY PROJECTSDigital & Cloud Service MgmtAutomationApp. Portfolio Mgmt.ENABLER tyManagement Page 15In many cases, the GICs have not beenable to fully service the parentorganization due to lack of (or delay inhiring) the right talentLeading GICs are focusing on specialtraining programs for new agecompetencies such as Analytics, cloud,Big data and IoTThey are also focusing on improvingtheir overall people supply chain

7COMPETENCIESPMO/TransitionBuilding strongcapabilities aroundprocurement and vendormanagementCenter StrategyOperations (CoreService and ProjectDelivery)CoEInnovationKEY PROJECTS Digital & CloudService MgmtAutomationApp. Portfolio Mgmt.ENABLER tyManagement Page 16IT service providers bring capabilities(like scale, platforms and deep technicalknowledge) that GICs will find difficult toreplicateThe best GICs find the right balancebetween internal and externalcapabilitiesGICs are focusing on how best they canact as procurement specialist for globalIT and manage the vendor relationshipafter the contracts are in place