Celebrating 20 years of NASSCOM

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IS IT COST OR QUALITY OR INNOVATION?
SID PAI, MANAGING DIRECTOR, TPI
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OUTSOURCING IN 2007 A LOOK BACK AT THE DYNAMICS
A maturing industry with a lot of moving pieces
reinforced common questions among prospective
adopters of outsourcing.
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MOVING FROM THE ERA OF COST REDUCTION TO BUSINESS
VALUE ADDITION
3C will have a distinct orientation around
business processes that unite technology and
operations yielding direct and indirect
benefits for their Clients
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MOVING FROM THE ERA OF COST REDUCTION TO BUSINESS
VALUE ADDITION contd.
A more balanced emphasis internally and/or
through expert third-party service providers,
value creation comes through balanced application
of the 3C characteristics to achieve leverage
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WHAT SORT OF RELATIONSHIP IS ENVISIONED?
The Innovation challenge where is a client
wanting to go on the spectrum of cost, capacity
and/or capability objectives.
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INNOVATION IN OUTSOURCING UNMET EXPECTATIONS
The term innovation has become a lightning rod
for criticism regarding the outsourcing business
model.

• Innovation
• Has been a gray concept in most outsourced
  relationships
• Has been generally not clearly defined or
  understood by the parties
• Has been something most clients believe they
  should receive through the relationship
• Has been promised by most service providers as
  part of the sales process
• The Innovation Gap Missed Expectations
• Misalignment upfront

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DEFINING INNOVATION
Innovation is the object of value and the means
of identifying and introducing improvements that
result in an elevated level of business
execution.
Execute Managing Innovation
Assess Need to Innovate
Change Ability to Innovate
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ENABLING INNOVATION
People, Process and the Desire to Innovate are at
the heart of crafting a successful innovation
program.

• Assessing
• Culture
• Business Drivers
• Defining
• Change Program
• Governance Model
• Vision Outcomes
• Managing
• Investment / Returns
• Risk
• Change

TPI Innovation Framework
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COMPARING APPLES TO ORANGES
Service providers seek to differentiate their
proposed value propositions to individual clients
in many ways.

• Differentiation may include
• Proposed solution to meet or exceed client
  requirements
• Price and pricing methodology
• Added value offerings
• Risk allocations
• Transformational benefits
• Gainsharing structures
• Contracting terms and flexibility
• The innovation enablers allow for the
  evaluation and consideration of these differences.

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SUSTAINING INNOVATION
Focus and discipline during the life of the
sourcing arrangement yield greater value than
chance occurrences or one-time events.

• Capabilities and solutions brought to the
  engagement during the design phase quickly evolve
  from new ideas to expected value
• Sustained innovation is not about the solution,
  or the transition, or the transformation its
  about putting in place the expectation, means and
  measures to incrementally add value to the
  clients business during the relationship

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TPI FRAMEWORK BALANCED APPROACH TO INNOVATION
Educate Client on Innovation in Outsourcing
Service Delivery
Innovation MVD Executive Alignment
Define Empirical Measures of Value Structured
Review Process
Evaluation Criteria - Innovation
Service Provider Quantifies Innovation as Part of
Solution Benefits/Risks included in Business
Case Evaluation Model
When Applicable Innovation Fund With Spectrum
of Investment Models, Transparency, Business Case
Process
Innovation Team as Part of Governance Operating
Model Jointly Funded
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THE GLOBALIZATION LANDSCAPE
Top 5, Long Term, Higher Cost and Niche Categories
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INDIA ADVANTAGE
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INDIA ADVANTAGE