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IBM Confidential IBM Confidential © 2007 IBM Corporation© 2007 IBM Corporation

Quick Path to GIE

Managed Business Process Services , 강학동전무IBM Korea

© 2007 IBM Corporation2

The ‘Flat World’ should be embraced


Global integration is becoming reality

“평평해진 세계”에 의해서, 글로벌 교역, 자본, 그리고 정보의 교류가 빠른 속도로

강화됨에 따라, 비즈니스 가치가 발생하는 장소(where)와 발생하는 방법(how)이 급격하게

변화하고 있다.

“The Globally Integrated Enterprise”, Foreign Affairs, June 2006Samuel J. Palmisano, Chairman of the Board and CEO in IBM Corporation

경제의 논리(Economics) : 노동

시장을 포함한잠재적수익

전문적 지식(Expertise) : 새로운 지식, 아이디어와 혁신에대한 접근이 가능

개방형비즈니스 환경

(Open business Environments) : 시스템의 개방 및

표준화 정도

글로벌 통합(Global Integration)을 위한 핵심 원칙- 업무가 통합되는 과정에 대한 3가지 동력


Source: IDC; MGI Labor Database; McKinsey analysis; IBM analysis

India and China have the most cost effective developer pools …

…which will expand 3-fold by 20102005

Globalisation expands the pool of skilled workers

Quantity: Thousands FTE

L.A.

Other A. P.

Russia

E. EuropeCanada

JapanU.K.

Other W.Europe

Germany

U.S.

40

30

20

10

0-1,000 1,000 3,000 5,000 7,000 9,000 11,000 13,000 15,000

Germany40

30

20

10

0-1,000 1,000 3,000 5,000 7,000 9,000 11,000 13,000 15,000

U.S.Other W.Europe

U.K.Japan

CanadaE. Europe

RussiaL.A.

Other A. P.

China

India

Labo

ur c

osts

, $ p

er h

our

Quantity: Thousands FTE

Labo

ur c

osts

, $ p

er h

our

India

China


India will have a 10-20 year median age advantage over its key competitors by the year 2025

Source: U.N. Department of Economic & Social Affairs, Population Division

Years

Med

ian

Age Median Age

1975

Median Age 2000

Median Age 2025

10

20

30

40

50

Japan WestEurope

US China India Japan WestEurope

US China India Japan WestEurope

US China India

10-20 year difference in median age


Global delivery can help generate the savings that fund for Business Transformation that create new business value

Current state Future state

Business Transformation

spending

* Performance improvements relative to sector median.Source: Business Impact of Outsourcing—A Fact-Based Analysis, coauthored by Dr. Marc Bertoneche, Harvard Business School,and Dr. Aleksandra Mojsilović, IBM Research, January 2006

Global delivery’sfinancial impact

15–25% projected average annual savings in operations and maintenance

50–100% potential increase in transformation budget

9.9-point* reduction in S, G & A expenses

11.8-point* increase in earnings growth

8.6-point* increase in return on assets (ROA)

Business Transformation

spending

Process operations spending Process operations

spending


Global network of delivery centers is designed to satisfy GIE enabler

In PlanF&A ProcurementHR CRM Industryspecific

Tokyo

Toronto

Lisbon

Greenock

Okinawa

Lexington

Dallas/Atlanta

Budapest

KrakowCalgary

Bangalore

Costa Rica

Manila

Newcastle

Greenville, SC

Edmonton

Buenos Aires

Nashville

ShanghaiRotterdam

Brisbane

Dalian

Tulsa

Delhi/Mumbai

Houston Bratislava

Dublin

EndicottStockholm

Hortlandia

Pune

ChandigarhKolkata

Athens

Sydney Melbourne

Malaysia

JeonjuSeoul

In PlanF&A ProcurementHR CRM Industryspecific In PlanF&A ProcurementHR CRM Industryspecific

Tokyo

Toronto

Lisbon

Greenock

Okinawa

Lexington

Dallas/Atlanta

Budapest

KrakowCalgary

Bangalore

Costa Rica

Manila

Newcastle

Greenville, SC

Edmonton

Buenos Aires

Nashville

ShanghaiRotterdam

Brisbane

Dalian

Tulsa

Delhi/Mumbai

Houston Bratislava

Dublin

EndicottStockholm

Hortlandia

Pune

ChandigarhKolkata

Athens

Sydney Melbourne

Malaysia

JeonjuSeoul


Case Studies by Sector

Industrial Telco

Dist

Finance Services


1. Web Production Services

Strategy vs. Reality

“High Life Seeker” “Average…”

“Big Variances over Countries”

Pain points on Web Sites


1. Web Production Services

Duplicated spending throughout regions due to lack of centralized adjustment and experience sharing.

Incoherent and Inconsistent Brand message from different web strategy and agency experience in each region

Achieve Finance Visibility and Cost Control and by product, business Line and Countries

Business Requirements Estimated Business Value

Reduced number of headcounts on duplicated jobs

Optimized number of Management and Fixed assets

Reduced Unit cost of labor by moving centers to cost efficient place

Strong Buying power & consolidated agency management Specialized web skills will increase the productivity

Consolidation

Labor Arbitrage

Operation Efficiency


1. Web Production Services : Leveraging ibm.com Global Delivery

-3 GMT-5 GMT-7 GMT +1 GMT +5.5 GMT +10 GMT

Buenos Aires, Argentina

White Plains, NYRaleigh, NCBoulder, CO

Sydney

Bangalore

Bratislava, Slovakia

Vienna, Austria

Web Production Locations

Authoring Services Locations

ibm.com/JapanAustin, TX

Rochester, MN Cambridge, MASan Jose, CA

Hursley

Sao Paulo, Brazil

Milan, ItalyDalian, China

Charlotte, NC

4 Web Productions Leaders4 Web project Managers 8 Web Developers69 Web Builders

14 Web Productions Leaders13 Web project Managers 7 Web Developers33 Web Builders 4 Web Productions Leaders

5 Web project Managers 7 Web Developers67 Web Builders

59 Web Productions Leaders7 Web project Managers 16 Web Developers

14 Web Productions Leaders7 Web project Managers 21 Web Developers15 Web Builders


1. IBM On-going Delivery Excellence Programs

Translation Memory - Tradus- United word for translation-Translation productivity improvement -Samsung standard words implementation

6 Sigma Program

-Time & Motion Studies -Production enhancement

Work Flow – PTT*

- Task tracking and management - Analytical reports for delivery

management aligned with rule based billing method..

Quality Assurance - WebKing

−Ensure Samsung.com Standard implementation −Automated error checking

Knowledge Communicator

- Provide common platform for all to collaborate and share / replicate internal & external knowledge relevant

IBM Delivery Excellence

Process Innovation to improve Productivity

Qua

lity

assu

ranc

e an

d C

usto

mer

Sat

isfa

ctio

n

Com

mun

icat

ion

/ Tra

ckin

g

Management Visibility

Real Time Reporting – PTT*

−Live reports of every country and every BU to ensure transparency−Rejection tracking

Issue Tracking Program – PTT*

- Issue status tracking & alert- Root cause analysis

Client Satisfaction Survey

−Effective response tracking of stakeholder satisfaction management


2. Telco – Telstra

Required to seek ways to improve operational efficiencies & reduce costs quickly

Procure to Pay: Lack of visibility to spend, process inconsistency, ineffective controls and enabling technology

Supply Chain Collaboration: Lack of data visibility/ control and process integration

Product Management: Lack of standardized new product governance, process and collaborative infrastructure

Supply Chain Planning: Multiple, disparate planning processes and supporting IT infrastructure across the business

Spare Parts Management & Field Service: Large stock holdings in multiple locations

Asset Management: Multiple disconnected processes and disparate systems

Business Requirements Business Benefit

Realize Savings

Improve Sourcing

Improve Compliance

Tracking of realized savings

Ability for Finance to interlock realized savings to budget review process

Visibility and planning of sourcing events and savings

Better data and tools for Procurement staff to allow for better management of the category and market intelligence

Improved relationships with suppliers due to better forecasting, quicker sourcing cycles and on-time payment

Further centralization of procurement function so that buying from the Business Units is eliminated over time

Increased Process Compliance and Contract Compliance will allow the procurement sourcing benefits to be realized


IBM procurement… from 300 centres to 3 centres in 6 years

Procurement Operation Centres

Budapest, Hungary

Bangalore, India

Shenzhen, China

Major IBM locations around the world

….now driven globally from China

2. Telco – Telstra


2. Telco – Telstra : SSC Service Areas by IBM

Procurement Services : 25M$/year investment in Procurement process!

sourcing teams for each spend categorymanaging IBM spend categories – sourcing strategy, vendor mgmt, savings reviews, contract mgmt (but final contract approvals always with Telstra) always compliant with Telstra policies

Operational Services

catalog development – hosted, punch outvendor master file maintenancecontract data capture“full buyer” requisition ordersemergency order processreportingcompliance measurementsavings tracking

Accounts Payable Services

invoice processinginvoice payment file generationreporting and month end assistancescanninginvoice / PO match issue resolution (pricing, GRN, etc)

IT Services

EmptorisP2P (Procure-to-Pay)Business ToneService Management ToolsHardware – Telstra HubNetwork and User access

Other Services

call centre – vendor assistance, Telstra user assistance, helpdesk etc


2. Telco – Telstra : GIE Solution leveraging IBM Global Delivery

Bangalore, India

Brisbane, Australia

Melbourne, Australia

Legacy ApplicationsWebsphere

integration, ERP integration

Database: DB2

O/S

Infrastructure LayerBack Office / Contact Centre

Application Layer

IBM Assets and Tools:P2P, Emptoris, Business tone

IBM Data Centre

Process and People Layer

• Business Outcome KPI measurements Tier 1 Business Functions

• FTE Transfer Tier 1 Business Functions• Process Improvement Tier 1 Modules• Consulting / Discovery Tier 2 Modules

ApplicationLayer

3

Process and People Layer

InfrastructureLayer

2

1

Integrated Procurement Solution

Client & supplier contact center supportCentralized invoice / payment status, call tracking and analysis

Centralized procurement’s AP, AR


2. Telco - Telstra : Financial Benefits

Strategic / Tactical Sourcing & Compliance

Realized Savings

Demand Management

Cost Avoidance

Total Procurement

Benefits

Direct

Spend

Total Spend Savings

Vendor Payment Controls Savings

Enterprise Procurement Activity Cost

Savings

Spend in dedicated areas with limited indirect sourcing

savings

Total Spend $2,000,000,000

Direct Spend = 80%

Indirect Spend = 20%

IBM will work with client to increase

compliance levels to 80-90%+

Increased controls and use of discounts

can yield an additional 1-2%

annually

Increased effectiveness and tighter controls can reduce

consumption by as much as 5-10%

End-user procurement activities can be reduced

or eliminated.

Indirect Spend

Potential Financial Benefits


2. Telco – Bharti, Global partnerships for best of breed capabilities to address high-growth opportunities

Bharti, a global telecommunications company, knew that the western model for mobile-phone businesses (building and maintaining huge, expensive cellular networks) would not work for them

The challenge was to expand the business while keeping costs down and providing reliable service. “Bharti has a “radical business model, which outsources everything but marketing and customer management, charges 2 cents a minute for calls, and is adding a million customers a month.”

– Sunil Bharti Mittal, Chairman & Managing Director, Bharti Enterprises

Bharti took a radical approach to outsourcing through global partnerships:Outsourced the entire cellular network to their three existing equipment suppliers Ericsson, Nokia, and Siemens Outsourced their call center operationsCreated an information technology alliance with IBM

Bharti outsources the heart of its operations which freed up its investment capital to pursue growth opportunities.

Bharti is now India’s largest private-sector telecommunications with 22% market shareIncreased revenue by 60% in 2005Subscriber base has grown from around 7 million to around 18 million in the last two years

Global Results

Integrated Approach

Enterprise Challenge

Source: Foreign Affairs, Volume 85, No. 3, May/June 2006; http://www.businessweek.com/magazine/content/06_17/b3981401.htm; http://www.businessweek.com/magazine/content/05_34/b3948440.htm


3. FSS –Major UK Bank (LTSB) Operations at IBM’s Global Delivery Centre in Bangalore

Banking Operations Insurance Subsidiary

Card Collections

Inbound

Outbound

Universal Banking Service

Account opening

Welcome pack generation

Account maintenance

Cash accounts

Excess management

Triggers

General Servicing of policies

Account maintenance

Inbound Personal Loan Service Center

Address and risk band checks

Operation Processes in Bangalore The growth of Global Delivery

• Started the Card Collections, Universal Banking Service May ’03 with agents of 100

• Insurance Process added Dec ’04 (Number of Agents grow to 300)

• Additional processes added (Bank Collections, Card Collections, Payment..)Number of Agents : 650 FTE as of 2007 Jan



% Calls Handled

Analysis of Complaints

% Complaints and Numbers

ONSHORE96%

OFFSHORE4%

Bangalore handles +70% of the calls while accounting for only 4% complaints

% of Book Handled Offshore

15.0%

46.0%

85%

54%

0%

20%

40%

60%

80%

100%

Inbound Outbound

Onshore Offshore

Complaints by Category

0

1

2

3

4

5

Rude Compliance Un-Helpful Process Voice / Accent



Key Deliverables– SLAs being consistently achieved

• Collections – 80% higher than On-shore operations• Data – Quality is consistently at 99.5%

– Collections - 70% of call volumes are now handled at Bangalore– Data – 2 processes are completely managed out of Bangalore– All Compliance and Audit requirements being met - 4 Star Audit rating

Way Forward– Expansion to cover new business areas such as Payments, HR, F&A and Administrative.


국경없는 경쟁…solution should come from GIE

quick path to gie - dbguide.net · – collections - 70% of call volumes are now handled at...

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