NASSCOM – BPO Strategy Summit 2009 Aligning BPO opportunities in the domestic market

1. NASSCOM – BPO Strategy Summit 2009 Aligning BPO opportunities in the domestic market Rajiv Prakash Director – Business Services & Strategy Future Knowledge Services – Future Group

2. 800 + Stores, 50 + Distribution Centres 70 + cities 40 Supply chains 3 million + articles 15 + Formats, 10 Categories FY05  FY08 6X revenue growth 25,000 + vendors 30,000 + employees Future Group’s Consumption Business Modern retail - still at a nascent stage in India

3. Future Knowledge Services (FKS) – created as a shared network of business and technology services for the group Resultant FKS design principles Retail Business’ Needs • Long term, sustainable low cost model • Capability to create capabilities • Group sourcing hub • Open delivery model – captive or outsource agnostic • Leverage low legacy • Architecture: Process – Technology Integration, Open source, network centric • Avoid mainstream locations – Ahmedabad hub • Provide talent the opportunity and environment to create an unique and valuable business Costs & Capex Controls & Compliance Consumer Experience & Revenues Scale To create and deliver solutions that will shape the consumption sector

4. Organisation Profile • Established in 2007 • Leadership: deep experience in international and India retail technology & business services and consulting – TESCO, KPMG, A S Watson and Cisco • Organisation: 600+ members combining business services, technology services and consulting – deep domain skills • Partnerships: SAP, Sun, Cisco, Wipro, Reflexis, JDA, Wincor, Greenplum, Newgen • Delivery hub: Ahmedabad – over 60% of team. Centre located in the midst of a 10 acre mall covering all key retail formats – a live training centre and lab • Governance: Business – FKS Governance Council

5. This model has helped in the creation and delivery of significant business capabilities across the value chain Retail Business PLAN BUY MOVE SELL SERVICE SUPPORT FKS Delivery to Retail Controls Consumer Experience / Revenues Scale Business Benefits Targeted Costs / Investments Key FKS Retail Business Services and Technology Initiatives since 2008 • Finance & Accounting Shared Services • Master Data Management Services • Inventory Audit Services • Space Optimisation Services • Reporting & MIS Services • Merchandise and Assortment Planning • Promotions Management • Time & Attendance Services • Payroll Management Services • Vendor Relationship Management Platform • Consumer Loyalty Programs • Enterprise-wide Point of Sale Replacement • SAP Platform ECC6 • Warehouse Management • Store Management Platform • Data Centre and Network Optimisation • Open Source Office Applications • Business as usual Technology Design Application Development Maintenance Technology Infrastructure Management Program Management Business Process Delivery Business Consulting FKS Capabilities + + + + +

6. Our Business Services profile Capability to deliver a complete business process as a service with accountability for outcomes • A full business capability as a service • Integrates different capability components: • Business solution and process design • People • Software application • Infrastructure • Integrates different service types: • Transaction processing (Rule and decision based) • Knowledge Services • Contact management • Audit and monitoring • Processes can be digitised and/or physical, centralised and/or decentralised

7. Capability 1 - Finance & Accounts Shared Services • 300 + person delivery centre in Ahmedabad serving Future Retail • 10 + end to end Processes – Accounts Payable incl Payments, Accounts Receivable, Reconciliations and Reporting • 2 million + transactions annually Scope & Scale: • Not lift and drop but migration to a to-be, standardised process model • Full country transition from 200+ stores, warehouses and zones in 3 months • No workflow, physical mail-room as an interim solution • Transition managed by ex-finance department personnel • Talent model – local graduates, 60+ finance dept staff migrated to Ahmedabad, select supervisory hires sourced nationally • Co-location of F&A Shared Services and Technology – SAP & Development teams Model: Platform creation: • Cash management reporting and reconciliation • Petty cash automation • Invoice creation application on vendor collaboration platform Benefits: Stronger controls, Better compliance, Cost Reduction

8. Capability 2 : Inventory Audit Service Scope: • End to end delivery of physical stock-take process at the stores and warehouses • Computation of variances vis-à-vis book stocks, reconciliation and posting • Shrinkage analytics and loss prevention advisory • 250 + stores, frequency - 3 times a year, night-shifts • 150+ people on rolls, 200+ FTE sourced from stores Scale: • Organised as 7 national hubs serving 60+ locations • An example of technology, process, infrastructure and talent integration • FKS designed business and technology solution, process architecture and SOPs • Team built through internal transfers – specialists and others • Technology integration: Inventory Audit Application created, SAP integration achieved, HandHeld Terminal deployed for the first time Model: Benefits: Accuracy, detection of frauds and defects, independence, stronger controls

9. Capability 3 – Master Data Management Services • Employee, Customer, Article (Product) and Vendor masters • Initial focus on Article (Product) Master – 3 million articles, annual creation 500,000+ articles • Services: • - Article Lifecycle Management – Creation, Maintenance & Archival • - Meta-master management • - Legacy article cleanup • - Dimension and image capture • - Merchandise Hierarchy Mgmt Scope & Scale: Model: • FKS designed - Business and Technology Solution, Process architecture and • SOPs • In-house designed MDM application with SAP integration – extensible across multiple categories • Specialised skills – for exception mgmt and other services • Product dimension capture – a physical process Benefits: Clean, consistent, complete and rich master data and lighter database

10. Domestic services – some learnings & observations • A different customer world – growth rates, scale, complexity, economics and ambiguity • Sourcing drivers differ from offshoring – operating model, controls, cost model • Not just process migration but often process creation and engineering • No significant cost arbitrage – demonstrating value demands innovation • No piecemeal solutions, demand for delivery of outcomes - hence technology + process + skill integration often a must • The immense value of low legacy • A sandbox – innovate locally, scale globally • Need for a domestic ecosystem – need to create and support an Indian business services and platform product provider base • Smaller and specialised partners are better • The extra-ordinary potential of “ordinary people” • Incentives for domestic services needed – significant employment creation potential

11. Namaste