key market developments in q32010 quarterly market vista briefing[1]

8/8/2019 Key Market Developments in Q32010 Quarterly Market Vista Briefing[1]

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Proprietary & Confidential. 2010, Everest Global, Inc.1

Todays Webinar is brought t o you by Everest Group

Todays Webinar

Key Market Developments in Q3-2010:Market Vista Report Briefing

Synopsis:Everest research analysts will highlight the findingsof the Q3-2010 Market Vista report. Atul Kunwarfrom Mahindra Satyam will share perspectives onstrategic priorities as the company positions itself for

growth following release of re-stated financials andintegration with TechMahindra.

Upcoming Webinar

Survival of the Differentiated The NewMantra of Success for Tier-2 Service Providers

Date and time:Thursday, November 18, 20108:30 a.m. CDT/9:30 a.m. EDT

Presented by:

Amneet Singh, Everest Group Jimit Arora, Everest Group

About Everest Group

Everest Group is an advisor to business leaders on global services with a worldwide reputation for helpingGlobal 1000 firms dramatically improve their performance by optimizing their back- and middle-office businessservices. With a fact-based approach driving outcomes, Everest Group counsels organizations with complex

challenges related to the use and delivery of global services in their pursuits to balance short-term needs withlong-term goals. Through its practical consulting, original research and industry resource services, EverestGroup helps clients maximize value from internal transformations, shared services, outsourcing and blendedmodel strategies. Established in 1991, Everest Group serves users of global services, providers of services,country organizations and private equity firms, in six continents across all industry categories. For moreinformation, please visit www.everestgrp.com and www.everestresearchinstitute.com.For more information, contact Mark Williamson at [email protected]
mailto:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]


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Q& A

To ask a question during the Q&A session

Click the question mark (Q&A) button located on the floating tool bar in the bottom rightof your screen. This will open the Q&A Panel

Be sure to keep the default set to send to a Panelist

Then, type your question in the rectangular field at the bottom of the Q&A box and clickthe send button to submit


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In t roduc t ions

Atul KunwarPresidentMahindra [email protected]

Anand RameshResearch Director, Global SourcingEverest Group

[email protected]

Salil DaniSenior Research Analyst, Global SourcingEverest [email protected]

Eric SimonsonManaging Principal, ResearchEverest [email protected]
mailto:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]


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K ey Mark et Developm ents in

Q3-2010: Quart er ly Ma rk et

V is t a Br ie f ing

Webinar

November 09, 2010


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Contex t se t t i ng

What will you learn from this Webinar?

Key findings from the Q3 2010 Market Vista report and what they mean for buyers andsuppliers

Highlights of trends across outsourcing and offshoring transactions, captives, locationdynamics, supplier developments, and implications for stakeholders in the globalservices industry

Interview with Atul Kunwar, President Mahindra Satyam, to discuss the organizationsdirection, trajectory and priorities following the release of restated financial statementson Sep 29, 2010


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What i s Marke t V is ta?

Overall sourcing market

Detailed analysis of trends byindustry vertical and geography

Report of transaction volume,size, and momentum

Perspective on events withsignificant industry impact (e.g.,M&A)

Implications of regulatorychanges

Supplier landscape

Updates on suppliermarket share,capabilities, andperformance

Supplier profiles,including data on: Transactions Location footprint M&A activity

Location data and dynamics

Data on market activity inkey offshore geographies Political Macroeconomic Promotion incentives

Trends in wage inflation,attrition, and arbitrage

Processes and models

Process-level trends Captive set ups,

divestures, and overalltrends

Fact-based insights onadoption of emergingpricing models

Data and perspectives onnew opportunity areas

QuarterlyReport

PrimerLocationdatabase

Breakingviewpoint

LocationInsights

e-newsletter

Suppliercapabilityprofiles

Industry trends


7/15Proprietary & Confidential. 2010, Everest Global, Inc.

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Agenda

Key market developments in Q3-2010

Interview with Atul Kunwar, President Mahindra Satyam



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Act iv i t y ac ross ou tsourc ing t ransac t ions and c apt ives

c ont inues t o ind ica t e tha t t he global serv ices marke t

is ho ld ing s teady

1 Includes only data that has been publicly disclosed

2 Announcements include both new set-ups and expansion of existing captive operations

Source: Everest Research Institute Transaction Intelligence Database

Index of outsourcing transactions1

Number

422

498 503

Q3 2009 Q2 2010 Q3 2010

Index of offshore captive health1

Number

Captive announcements2 = Actual Planned+

Captive divestures = Actual Planned+

27

38

25

134

1813

14

20

12

1

2

Q3 2009 Q2 2010 Q3 2010



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Among c apt ives , expans ion o f ex is t ing c enters and

se tup o f new cen te rs c on t inues w i th As ia dominat ing

ot her geographies

India:

10 new captive announcements PricewaterhouseCoopers center in

Kolkata to provide F&A support toall global PwC network firms

Credit Suisse expanded its centerof excellence in Mumbai

Nalco established a technologysupport center in Pune

East Asia:

7 new captive announcements P&G opened its R&D center in Beijing

(China) General Motors plans to set up a

research facility in Shanghai (China) Intel opened a new R&D center in

Shenzhen (China)

Note: All references to captives include only offshore captives

Source: Everest Research Institute analysis

Europe:

6 new captive announcements Eli Lilly plans to establish a European

Financial Services center in Cork (Ireland) Nestle plans to set up a shared-services

center in Lviv (Ukraine)

Latin America:1 new captive

announcement Microsoft plans to build

a data center in Brazil

Africa:1 new captiveannouncement Amazon plans to open a

customer service center inCape Town (South Africa)



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Transaction signings by geographyQ3-2010

Change in BPO transaction volume by process

36% 36% 34%

17% 12% 13%

20% 28%

24% 15% 19%

30%2%

1%2%

5%1% 4%

Q3 2009 Q2 2010 Q3 2010

Notab le ins ights : T ransac t ion vo lumes in Nor th

Am er ic a and Europe s t ab le ; ITO s t ronger in Q3 t han

BPO

Transaction volumes in North America and Europe stayed

stable relative to Q2

North America witnessed a slight reduction and Europestayed similar

Concerns around economic softening did not impacttransaction volumes in North America

Consistent with overall market trends, companies in both ofthese key geographies continue to approach outsourcingand offshoring with caution

Most BPO processes are seeing higher activity thanQ3-2009 but lower than Q2-2010

Transaction volumes in FAO, HRO, Customer Care andIndustry specific processes are higher than Q3-2009

However, compared to Q2-2010, BPO transaction volumesare lower in Q3-2010 We expect to see stabilization and growth in BPO

transaction volumes on an overall basis. However, the Q-o-Qtrend is likely to be erratic

UK

ROW

North America

Others

Rest of Europe

Japan

498 503422100% =

Customer care

Industry-level trending analysis included in the Market Vista Industry Trends reports

Q3 09 to Q3 10 Q2 10 to Q3 10

HRO

FAO

PO

Industry specific



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Offshore loca t ion ac t iv i t y w as c omparab le to Q3-2009

w i th a s l ight b ias tow ards T ie r -2 c i t ies

23

13

161817

15

Tier-1 Tier-2

21

10

5

21

76

18

86

Asia Europe and Africa Latin America

Market activity across geographies

Number of service delivery centers set up

Market activity across Tier-1 and Tier-2

locationsNumber of service delivery centers set up

Source: Everest Research Institute analysis

Q3 2010

Q3 2009

2009 Quarterly average



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Share of revenue from public sector

2009, Percentage

Increase in wage inflation rate: 2009 to 2010Percentage points

Not able ins ights : Regula tory developm ent s in t he U.S.

need mon i to r ing ; w age in fla t ion and a t t r i t ion ra tes

c reeping up

Regulatory developments are causing some concern

and need careful monitoring Ohio banned offshore delivery of government projects

and the border security bill increases visa costs Other emerging moves around proposed tax

amendments and visa regulations are adding to theconcern

Global suppliers likely more impacted. However, thesedevelopments may create additional impetus for

offshore suppliers to expand delivery presence in theU.S.

Wage inflation rates in offshore locations arecreeping up as competition for talent increases Greater predictability in pipeline is leading suppliers to

restore hiring rates to pre-2009 levels

Several large captives are also expanding rapidly Labor market pressures are increasing, most notably in

India but also across other offshore locations Expect to see further pressures during the next few

quarters


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Agenda

Key market developments in Q3-2010

Interview with Atul Kunwar, President Mahindra Satyam


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Snapshot o f k ey messages f rom Everest s Break ing

View po int : A New Mah indra Satyam ?

The combined Mahindra Satyam Tech Mahindraentity is positioned among the Tier-1 Indian ITservices providers

To recapture a growth trajectory, Mahindra Satyamwill be best able to differentiate using fourfoundations of growth

Mahindra Satyams recovery and integration with Tech Mahindra highlights some key implications for

the industry: Buyers need to implement holistic risk management across all aspects of global services portfolio Buyers will benefit from re-introduction of major offshore IT services provider

Suppliers will see increased competitive intensity as the combined entity aggressively pursues growth Mahindra Satyam will need to reinforce industry confidence by backing promises with strong performance,

ensuring smooth integration, maintaining strategic differentiation, and continued investments towardscapability development and growth


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Q& A

Attendees will receive an email enabling them to download todays webinar presentation. To access

a recorded audio version of this webinar, please contact Mark Williamson,[email protected]

For advice or research on outsourcing and offshoring, please contact: Anand Ramesh, [email protected] Salil Dani, [email protected]

For background information on Everest, please visit: www.everestgrp.com www.everstresearchinstitute.com

Thank you for attending today

To ask a question during the Q&A session

Click the question mark (Q&A) button located on the floating tool bar in the bottom right of yourscreen. This will open the Q&A Panel

Be sure to keep the default set to send to a Panelist

Then, type your question in the rectangular field at the bottom of the Q&A box and click the sendbutton to submit
mailto:[email protected]:[email protected]:[email protected]://www.everestgrp.com/http://www.everstresearchinstitute.com/http://www.everstresearchinstitute.com/http://www.everestgrp.com/mailto:[email protected]:[email protected]:[email protected]

key market developments in q32010 quarterly market vista briefing[1]

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