某咨询价值链的提升McKinsey.pptx

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1、ITES/BPO Opportunity to move up the value chain?This report is solely for the use of client personnel. No part of it may be circulated, quoted, or reproduced for distribution outside the client organization without prior written approval from McKinsey & Company. This material was used by McKinsey &

2、Company during an oral presentation; it is not a complete record of the discussion.Source: Gartner; Dataquest; Aberdeen group; McKinsey analysisTelecom costs down by 90% in the last 3 years; world-class reliabilityOver 2.5 million low-cost talented workers in countries such as India and PhilippinesE

3、mergence of a credible vendor community0.00.20.40.60.81.01.21.41.61.82.0199219931994199519961997199819992000200120022003EBPO total revenues- India example*$ billionCONTEXT: BUSINESS PROCESS OFFSHORING HAS EXPLODED IN THE LAST FEW YEARSEncouraging track record of early movers Demanding U.S market env

4、ironmentSuccessful track record of I/T offshoring1030918 Offshoring workshop v2“Tech jobs leave U.S. for India, Russia. Whos to blame?” July 2003“Is your job next?” February 2003BUT HAS ALSO CREATED GREAT ANXIETY IN PRIMARY MARKETS “American legislators are accusing India of stealing jobs” June 2003

5、“Americas pain, Indias gain” January 2003“3.3 million U.S. service jobs to go offshore by 2015” November 2002“Can America Lose These Jobs and Still Prosper?” July 2003U.S. House Sub-business Committee2IN THIS CONTEXT, SEVERAL DOUBTS HAVE ARISEN ABOUT THE FUNDAMENTAL LONGEVITY AND EVOLUTION OF BPO AS

6、 AN INDUSTRYWill the BPO phenomenon plateau out in the next few years?Even if it survives, moving up the value chain will be difficult and will take several years?Value chain moves will be the domain of captives because the trust required is too high?320030520DL-ZXE332(ITES, Board Pres.)(JS)-7IN THI

7、S CONTEXT, SEVERAL DOUBTS HAVE ARISEN ABOUT THE FUNDAMENTAL LONGEVITY AND EVOLUTION OF BPO AS AN INDUSTRYWill the BPO phenomenon plateau out in the next few years?Even if it survives, moving up the value chain will be difficult and will take several years?Value chain moves will be the domain of capt

8、ives because the trust required is too high?420030520DL-ZXE332(ITES, Board Pres.)(JS)-70.33* Estimate based on historical U.S. reemployment trendsSource: McKinsey Global Institute1. OFFSHORING ACTUALLY GENERATES GREATER VALUE FOR THE GLOBAL ECONOMYTaxes ($0.04)Revenues ($0.20)Local suppliers ($0.09)

9、. . . deliversvalue to India . . .0.67Cost savings ($0.58)Goods sold ($0.05)Profits from Indian ventures ($0.04). . . brings returnsto U.S. . . .1.45-1.47. . . and makes the global pie that much bigger0.45-0.47. . . creates new value from re-employing U.S. labor* . . .$1 previouslyspent in U.S.,now

10、offshored to India . . .$1.0050.030.330.100.090.100.01Profits retained in IndiaINDIA CAPTURES 33 CENTS FROM EACH DOLLAR OF SPEND OFFSHORED BY THE U.S.Value accrued from $1 of U.S. spend offshored1Dollars; 2002Central govern-ment3State govern-ment4Total value accrued to IndiaLaborSuppliers2Offshoring

11、 sector1 Estimated using the India offshored services industry case 2 Includes revenue accrued to the supplier industries less sales taxes, income taxes to employees and corporate taxes 3 Includes income tax from labor employed in the offshored services sector and the supplier industries and corpora

12、te tax on the supplier industries4 Includes sales tax on the supplier industries and revenue from the sale of power to offshored service providers Source: McKinsey Global Institute6JOBS OFFSHORED WILL BE A SMALL FRACTION OF THE SHORTAGE IN ELIGIBLE WORKERS Number of workers Millions, 2000-2015 Sourc

13、e: U.S. Census; McKinsey Global Institute 3.315.6Jobs projected to go offshoreDecline in working population due to aging71.170.270.21JOBS OFFSHORED ARE A FRACTION OF ALL MASS LAYOFFS1 Bureau of labor statistics defines mass layoffs as job loss actions leading to the displacement of 50 or more worker

14、s by a given establishment during a 5-week period2 Average 1996-993 Average 1989-20004 Average 2003-13Source: NBER; BLS; Kletzer; McKinsey Global InstituteAverage annual mass layoffs1Millions All mass layoffs2Offshoring projection4Trade-related layoffs38Economic value of off-shoring realOff-shoring

15、creates 40-50% greater value for the global economyIndia captures 33% of every off-shored dollar while the US retains 67% and the incremental 40-50% value creationOff-shored jobs small fraction of expected retirements/lay-offs THEREFORE, BUSINESS LOGIC WOULD INDICATE THAT BPO HERE TO STAY BUT WILL R

16、EQUIRE HANDLING CUSTOMER CONCERNS WITH COMPASSIONNegative emotional impact at the customer equally realReal people and communities are effectedRe-training takes timeManufacturing hang-over still felt920030520DL-ZXE332(ITES, Board Pres.)(JS)-7IN THIS CONTEXT, SEVERAL DOUBTS HAVE ARISEN ABOUT THE FUND

17、AMENTAL LONGEVITY AND EVOLUTION OF BPO AS AN INDUSTRYWill the BPO phenomenon plateau out in the next few years?Even if it survives, moving up the value chain will be difficult and will take several years?Value chain moves will be the domain of captives because the trust required is too high?10200305

18、20DL-ZXE332(ITES, Board Pres.)(JS)-7Completed the first round of off-shoring successfullyBuilt substantial scale in operations in IndiaPenetrated 1-2 businesses in depthStarted capturing labour cost savingsBase A: “Accelerate, extend breadth and depth” Increase breadth and depth of services Strength

19、en and stabilize architectureInsource-outsource, onshore-offshore architectureGlobal hub architectureStrategic outsourcingB: “Re-engineer” Drive towards operational improvementTask level and process level reengineeringConsolidation and aggregation of functions Leverage low cost position to start off

20、ering new services to customers and improve competitive position in home marketsC: “Externalize” Take robust platforms external and create value out of the shared services utilitySpecialized service bureauGeneric third party BPO providerD: Tackle tough (but large) industriesFOUR POSSIBLE VALUE CHAIN

21、 MOVES POSSIBLE1120030520DL-ZXE332(ITES, Board Pres.)(JS)-7Simple, standardized activitiesAdvanced technical skill and some judgment requiredExtensive judgment and analytical skill requiredA. MOVES UP THE VALUE CHAIN ALREADY HAPPENING IN TERMS OF BREADTH AND DEPTH OF PROCESSES OFF-SHOREDAXAInsurance

22、 claims processingCitibankCheck processing, account application processing, loan processing by a subsidiary (e-Serve)HSBCAccount opening and closing, retail loan processing, mortgage processingAmerican ExpressLive brokerage advice from qualified agents through a vendor in the Philippines (eTelecare)

23、Extensive offshoring of credit card services (including risk modeling and credit evaluation)Extensive financial analysesGE Capital Business SolutionsRisk modeling, actuarial services, underwritingCitibankCredit card processing, collection calls, inbound and outbound service centersHSBCInbound custom

24、er service center for mortgageCapital OneInbound customer service center, outbound telemarketing (MSourcE)CitibankFinance and accountingGE CapitalInsurance claims processing Outbound telemarketing, inbound customer serviceMBNAProcessing of online applications (TransWorks)GE CapitalPayroll accounting

25、Invoice and payment processingMcKinsey & CompanyResearch and knowledge management for world-wide offices in GurgaonGE CapitalRisk analysis, strategic planning and forecastingFinancial statement analysisExamples of sector-specific (“vertical”) processesExamples of corporate center (“horizontal”) proc

26、essesGEUK auto applications data entry1220030520DL-ZXE332(ITES, Board Pres.)(JS)-7IN FIs, VENDORS AT POINT OF SERVICING THE WHOLE RANGE OF CORE BANKING AND SUPPORT PROCESSESSource: Vendor interviews, literature searches, vendor websites, McKinsey analysisSample processesTelesalesCustomer serviceTech

27、nical support help deskE-mail supportFax responsesLive interaction (chat room customer service)Customerfacing VoiceNon-voice InboundOutboundTelemarketing Collections (bucket one)Business process off-shoring servicesBenefits administrationPayroll processingRetail banking (account maintenance, opening

28、, check processing)Fund administrationReference data managementClaims processingDatabase integration & analytical servicesSecondary researchA/R and A/P managementReconciliationBack office Core businessSupportHR/ AdminConsumer bankingWholesale bankingInsuranceResearchFinance & Acctg. Illustrative ven

29、dors1320030520DL-ZXE332(ITES, Board Pres.)(JS)-7B. REENGINEERING AND PROCESS IMPROVEMENT CAN PROVIDE ADDITIONAL GAINS OF 30-40%100Original costbaseFactorcostsavingsAdditi-onal telecom & manag-ement costs Off-shore location costConsoli-dation, standar-dization & superior skills Taskreengi-neeringEcon

30、o-mies of scaleProcess reengine-eringNew cost base60-6510-1545-558-135-73-51530-35Does notinclude gains from revenue enhancementTask aggregation and process level improvementTask migrationTask levelimprovementFactor cost benefits (45-55% savings)Additional benefits (30-40% savings)1420030520DL-ZXE33

31、2(ITES, Board Pres.)(JS)-7Productivity and process re-engineeringEconomies of scaleAggregated cheque order processing tasks and bought-in cross-trained agents, which has significantly increased staff utilisationDecreased time taken for month-end closing from 5 to 2 days by modifying and eliminating

32、tasksRe-engineering (end-to-end)IN FACT, OVER TIME COMPANIES HAVE CAPTURED ADDITIONAL PRODUCTIVITY GAINSReduced 40 FTEs by digitising the back lining process in the contact centre Technology applicationEfficiencySource: Expert interviews; literature searchesReduced average call centre talk time from

33、 180 to 100 seconds through use of more qualified agentsImproved total customer satisfaction score from 85% to 92% after offshoring call centre services to IndiaBetter talent and trainingEfficiencyIncreased first time resolution rates from US benchmark of 59% to 74% resulting in reduction in repeat

34、support calls and on-site dispatch calls leading to savings of $2 million per annum1520030520DL-ZXE332(ITES, Board Pres.)(JS)-7C. F-1000 INSTITUTIONS HAVE INCREASINGLY BEGUN TO REALISE OPPORTUNITIES FOR REVENUE ENHANCEMENTLive brokerage advice for mass affluent customers from Series 7 qualified agen

35、ts through vendor in the Philippines (eTelecare)50 million/year gained through revenue audits interline, agent, and used ticketsAbility to price insurance policies at significantly below competition leading to 5-7% market share improvement in home marketsResearch platform to service customers for a

36、fee offer customized research for strategic customersDevelop modeling platform to provide fee-based analytical capabilities to SME financial services customers offer customized services to large financial institutionsOffer trade finance services to SME customers that are otherwise uneconomical to se

37、rveOffshore R&D (pharma, chemicals) using collaborationsKnowledge on call services for core clients customized research and analyticsRevenue opportunities created through offshoringPotential ideas for F-1000 institutionsCustomised research for global customers potential to create platform to service

38、 other banks1620030520DL-ZXE332(ITES, Board Pres.)(JS)-7Columbia Bank & Trust (later Synovus) transitions internal credit-card processing business into third-party company (1982)CB&T sells 19% of company in IPO (1983)TSYS grows to become the second largest processor in the worldSIGNIFICANT VALUE CAN

39、 BE CAPTURED BY TRANSFORMING INTERNAL CAPABILITIES INTO THIRD-PARTY BUSINESSESAmEx transitions internal processing unit into third-party company (FDR) and sells off majority ownership stake (1992)FDR merges with largest competitor and grows to become global leader in transaction processingParentNew

40、businessTransition* March 1, 2002Sources: Hoovers; analyst reports; McKinsey analysisManagement buyout of Midland Bank processing unit following merger with First Bank System (1984)IPO in 1986Grown to become leading provider of technology and processing services for financial institutionsMidland Ban

41、k$5 billion in market cap*, growing at 5% CAGR in the last 5 years$8 billion in market cap*, growing at 31% CAGR in the last 5 years$17 billion in market cap*, growing at 26% CAGR in the last 5 yearsValue creation U.S. $ billion1720030520DL-ZXE332(ITES, Board Pres.)(JS)-7D. NEW INDUSTRIES THAT HAVE

42、PLAYED “WAIT AND WATCH” GAME TRADITIONALLY NOW ACTIVELY EXPLORING AND COMMENCING OFFSHORING PHARMACEUTICAL EXAMPLEArea IT offshoringSupport functionsAttitude towards outsourcing/offshoringKey factors driving increasing momentum“Wait and watch” towards offshoring until late 2001Significantly higher a

43、cceptance in 2002“Triggers pulled” in 2003 by several players including BMS, Novartis, AbbottMainstreaming of IT offshoring and emergence of credible success stories on cost and quality improvementsSolid vendor base (e.g., Infosys, Satyam, TCS) with proven track recordObserved actions of competing p

44、layers!“Wait and watch” towards outsourcing of business process through 2002 and early 2003Numerous ongoing discussions in 2003 with vendors on finance & accounting and HR offshoringIncreasing focus on rationalizing support function costsEmergence of credible success stories and vendors for F&A and

45、HR Observed actions of competing playersMany companies articulating “overall aspiration” cutting across numerous opportunities such as IT, BPO, R&DR&DConcerns around IP and quality of medical infrastructurePositive experience of first movers in addressing concerns and benefiting significantly e.g.,

46、AZ and BMS in R&D; Pfizer & Eli Lily in clinical development; Novartis & Pfizer in data management Improved medical infrastructure and favorable regulatory environment1820030520DL-ZXE332(ITES, Board Pres.)(JS)-7OPPORTUNITIES FOR OFFSHORING EXIST ACROSS THE PHARMACEUTICAL VALUE CHAIN R&DSupport Funct

47、ionsIndustrial OperationsStrategic and commercial busi-ness planning (pre-launch)Product development and life cycle managementPricing and health economicsMarket a product (new and legacy)Customer relationship managementCustomer and consumer servicesSales managementLogistics & distributionAfter sales

48、 servicesFinance & AccountingInformation TechnologyHuman resourcesLegal Legal counseling advocacy and litigation Intellectual property counselingSales force supportTarget identification & validationLead generation & optimizationPreclinical/ ToxicologyClinical Development & TrialsData ManagementNew p

49、roduction developmentProcurementPlanning and manufacturing Plant maintenance Quality management Process controlSupply chain managementPerformance monitoring and controlCommercial OperationsSource: Interviews; McKinsey analysisFocus of documentOffshore potential19Business process modelRECENT ACTIVITY

50、 POINTS TO GROWING INTEREST OF PHARMACOS IN OFFSHORING DATA MANAGEMENT EXAMPLESource: InterviewsGlobal statistical operations business systemSavings of around 40-60% vis-vis global CROs within first yearTargeting 80-100 global trials in 2003Plans to start related areas of filing and report writing,