NASSCOM BPO Strategy Summit 2009 Captive 2.0: Managing Cost and Risk Dinesh Pai

1. NASSCOM BPO Strategy Summit 2009 Captive 2.0: Managing Cost and Risk Dinesh Pai Director – Dell America’s Services & Support and Head, Dell India Contact Centers June 10, 2009

2. “Captive 2.0” • How is this industry evolving ? • What are our experiences so far ? • What are the key risks we need to be cognizant of ? • How does the future look for successful captives ? • How can NASSCOM/Government facilitate this ? 2

3. “How is this industry evolving?” “Cost arbitrageurs are transforming into Value leaders” HIGH BPO Evolution 2015 Laggards Lose to “lean competitors” “Value Leaders” 2010 VALUE DIFFERENTIATION “Cost Arbitrageurs” Laggards Lose to “value creating competitors” 2005 Year 2000 LOW 3 COST DIFFERENTIATION LOW HIGH

4. “How is this industry evolving?” “Cost arbitrageurs are transforming into Value leaders” HIGH “Value differentiation while maintaining leadership position in Cost is critical” BPO Evolution 2015 Laggards Lose to “lean competitors” “Value Leaders” 2010 VALUE DIFFERENTIATION “Cost Arbitrageurs” Laggards Lose to “value creating competitors” 2005 Year 2000 LOW 4 COST DIFFERENTIATION LOW HIGH

5. “Spiralling Costs is the biggest risk to Captives”

6. “What are our experiences so far?” “Managing Costs – Our Experiences” Business Related: People Related: • Focus on value add, not headcount add (question each new headcount) • Longer tenure in jobs and focus on building deep domain capability • Pay for performance – capability and not tenure linked wages • Wage optimization - differentiated increments across levels • Invest in niche capabilities M&A, next generation solution architects • Drive “Bullet Train Initiatives” - utilization of Facilities, Transport & Telecom • Higher managerial spans & better frontline productivity • Effectiveness of support processes like hiring, training, finance • Re-engineer end to end processes leveraging technology and analytics • Variable cost mindset 6

7. “What are the key risks we need to be cognizant of?” “While we focus on delivering value…securing data, assets & people is critical” • Three questions critical for us to answer • Is there enough awareness within our organization? • Do we have the right training delivered at all levels? • How effective is our governance & systems – Audits, Tools, etc…? Example – Driving additional revenue comes with Customer info risk – Credit Cards, etc… 7

8. “How does future look for successful Captives?” “Captives will need to take their own path” • “We are the business” – Captives need to work on this mantra and take full ownership of the P&L • Develop your own value proposition – Cost, Quality & Innovation • Opportunity to drive “Disruptive Innovation” in end to end process • M&A’s to develop new capabilities – Technology & Services • Strong Governance to manage end to end business 8

9. “How can NASSCOM facilitate this?” “Creating forums in specific areas” • Forums in specific “Risk” areas to : • Drive “best practice sharing” • Create / mandate “common minimum requirements” • Areas to consider : • Security – data, assets & people • Cost transformation • People practices 9

10. Thank You 10

11. “What are some of the other risks?” “Geopolitical, Governance, Business Continuity” • Geopolitical – Stable government, No new internal & external threat • Governance – Multiple models available currently – SLA based, Shared Services, Global Teams etc… • Business Continuity – Multiple centers across the globe – Captives & Partners 11