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Everest Group PEAK Matrix for Capital Markets BPO Service Providers Focus on TCS

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Everest Group PEAK Matrix for Capital Markets BPO Service Providers Focus on TCS
Everest Group PEAK MatrixTM for Capital Markets BPO
Service Providers
Focus on TCS
December 2014
Copyright © 2014 Everest Global, Inc.
This document has been licensed for exclusive use and distribution by TCS
EGR-2014-11-E-1329
Introduction and scope
Everest Group recently released its report titled “Capital Markets BPO – Service Provider Landscape with
PEAK MatrixTM Assessment 2014”. This report analyzes the changing dynamics of the capital markets BPO
landscape and assesses service providers across several key dimensions.
As a part of this report, Everest Group updated its classification of 17 service providers on the Everest Group
Performance | Experience | Ability | Knowledge (PEAK) Matrix for capital markets BPO into Leaders, Major
Contenders, and Emerging Players. The PEAK Matrix is a framework that provides an objective, data-driven,
and comparative assessment of capital markets BPO service providers based on their absolute market
success and delivery capability.
Based on the analysis, TCS emerged as a Leader and also a Star Performer. This document focuses on
TCS’s capital markets BPO experience and capabilities. It includes:
 TCS’s position on the Everest Group capital markets BPO PEAK Matrix
 Detailed capital markets BPO profile of TCS
Buyers can use the PEAK Matrix to identify and evaluate different service providers. It helps them understand
the service providers’ relative strengths and gaps. However, it is also important to note that while the PEAK
Matrix is a useful starting point, the results from the assessment may not be directly prescriptive for each
buyer. Buyers will have to consider their unique situation and requirements, and match them against service
provider capability for an ideal fit.
Copyright © 2014, Everest Global, Inc.
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Everest Group’s definition of BFSI includes the
following three segments
Focus of this document
Banking, Financial Services,
and Insurance (BFSI)
Banking


Retail financial services
(B2C1)
– Cards
– Retail banking
– Lending
Capital markets
Insurance

Investment banking

Life & pensions

Asset management

Property & casualty

Custody & fund
administration

Reinsurance

Brokerage
Commercial banking (B2B2)
Note: This report covers vertical-specific BPO within the capital markets space. It does not include coverage
of horizontal business processes such as F&A, HR, procurement, and contact centers
1
2
Business-to-Consumer relationships
Business-to-Business relationships
Copyright © 2014, Everest Global, Inc.
EGR-2014-11-E-1329
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Everest Group PEAK Matrix – 2014 capital markets
BPO market standings
Performance | Experience | Ability | Knowledge
Everest Group Performance | Experience | Ability | Knowledge (PEAK) Matrix for capital markets BPO1
Leaders
Major Contenders
Emerging Players
75th percentile
High
Leaders
Xchanging
Wipro
TCS
Infosys
HCL
25th percentile
Market success
eClerx
Syntel
Genpact
Star Performers
Cognizant
Mphasis
IGATE
75th percentile
Major Contenders
Viteos
EXL Service
Emerging Players
WNS
Tech Mahindra
NIIT Technologies
Hexaware
Low
Low
1
Source:
25th percentile
High
Capital markets BPO delivery capability
(Scale, scope, technology solutions, delivery footprint, and buyer satisfaction)
Service providers scored using Everest Group’s proprietary scoring methodology given on pages 13 and 14
Everest Group (2014)
Copyright © 2014, Everest Global, Inc.
EGR-2014-11-E-1329
4
TCS is a capital markets BPO Star Performer based
on strong forward and upward movement over time
on the Everest Group PEAK Matrix
Change in TCS’s positioning on Everest Group PEAK Matrix for capital markets BPO
2013
Market success
Leaders
TCS
2012
Major Contenders
Market success in 2013
 Added ~ US$15 million and witnessed one of the
highest growths within the capital markets BPO
space in terms of absolute revenue figures
 Most of the growth was attributed to scope expansion
of existing deals
 Achieved success in ramping up several non-linear
engagements
 Ventured into new markets such as Canada and
Netherlands which have not witnessed much capital
markets outsourcing
Delivery capability
Capability enhancements in 2013
 Added ~1,000 new FTEs in capital markets BPO in 2013 to better
serve the existing clients
 Expanded capital markets BPO delivery footprint at both offshore
and nearshore locations
 Witnessed increased traction from both Asia Pacific and North
America
Source:
Everest Group (2014)
Copyright © 2014, Everest Global, Inc.
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TCS (page 1 of 5)
Competitive position and assessment
Delivery capability assessment
Market share by region
High
Low
North
America
Europe
South
America
Middle East
Asia Pacific & Africa
Assessment
Dimension
12%
13%
-
6%
Scale
Significant scale with close to 4,000
FTEs in capital markets BPO
Scope
Highly diversified portfolio, however,
lacks traction with smaller buyers
Technology
capability
Offers a whole suite of platform and
augmentation solutions
Delivery footprint
High offshore leverage with some
nearshore presence as well
Buyer satisfaction
Enjoys high satisfaction ratings
amongst its existing buyers
-
Rating
Remarks
Market share by capital markets BPO line of business
Investment
banking
Asset
management
Custody &
fund
administration Brokerage
18%
14%
2%
11%
Overall market share
By active contracts
By FTEs
By revenue
5%
12%
12%
Overall remarks
Being the only provider to receive the top ratings across all the dimensions, TCS emerged as a Leader on the capital markets BPO PEAK
Matrix
 With a substantial increase in revenue and FTEs, TCS also secured the title of a Star Performer on the PEAK Matrix
 TCS has built substantial capabilities in both North America and Europe, the prime geographies for capital markets BPO players
 However, given the dominance of large-sized financial institutions in TCS’ portfolio, smaller buyers remain wary of leveraging TCS as an
outsourcing partner, thus preventing the service provider from tapping into an upcoming growth segment
 Going forward, TCS would do well to expand its onshore presence, especially to help manage the relationship aspects with clients better.
Investing into new growth areas, such as Asia Pacific and small buyer segments, could also help maintain the momentum for the service
provider
 TCS enjoys a high overall buyer satisfaction levels specially in driver satisfaction and relationship management. However, buyers expect TCS
to focus more on providing innovative and value added services

Source:
Everest Group (2014)
Copyright © 2014, Everest Global, Inc.
EGR-2014-11-E-1329
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TCS (page 2 of 5)
Capital markets BPO overview
Company overview
Tata Consultancy Services (TCS) is an IT services, consulting, and
business solutions organization. TCS’ extensive experience with diverse
BFS organizations has helped it develop in-depth domain expertise.
Within the capital markets space, TCS’ offerings span the entire
spectrum of buy- and sell-side operations. TCS also offers platform
solutions, such as TCS BαNCS, for specific business functions in
capital markets
2011
2012
2013
~80
~85
~100
Number of FTEs
~2,700
~3,200
~4,000
Number of clients
10
10
11
Revenue (US$ million)
Headquarter: Mumbai, India
Website: www.tcs.com
Recent acquisitions and partnerships
 2012: TCS and Mitsubishi formed a Joint Venture (JV) to
establish an IT, BPO, and infrastructure services delivery
center in Japan
 2012: TCS BaNCS signed an agreement with Savvis, a
CenturyLink company and a global leader in cloud
infrastructure, for hosting cloud-enabled core banking,
payments, and compliance
Suite of services
 Client and securities reference data management services
 Trade confirmation and settlement
 Wealth management services and brokerage
 Financial reporting cash management and financing
 Stock lending and transfer agency
 Asset management and servicing
 Custody and fund administration
 Reconciliations and derivatives processing
 Risk management operations and controls
Recent developments
 Deployment of TRAPEZETM tools for business performance
and productivity metrics
 FORETM – transformation model for business process
improvement
 Capital Markets Domain Academy equipped with a web tool
for competency development
 Center of excellence developed for market risk
management
Key leaders
 Abid Ali, Global Head, Business Process Services
 Dinanath Kholkar, Head – BFS & INS, BPS
 Narayanan Muthuswamy, Head – Capital Markets BPS
Source:
Everest Group (2014)
Copyright © 2014, Everest Global, Inc.
EGR-2014-11-E-1329
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TCS (page 3 of 5)
Capital markets BPO – key delivery locations
Dalian
Guadalajara
Source:
Gurgaon
Pune
Mumbai
Chennai
Bangalore
Everest Group (2014)
Copyright © 2014, Everest Global, Inc.
EGR-2014-11-E-1329
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TCS (page 4 of 5)
Capital markets BPO – capabilities and key clients
Key capital markets BPO engagements
Client name
Line of business / scope
Region
Citi
Asset management, custody & fund
administration, and brokerage
North America, Europe, and Asia Pacific 2008
Top 10 investment bank (HQ-EU)
Investment banking
North America, Europe, and Asia Pacific 2004
Top 10 investment bank (HQ-U.S. )
Investment banking and brokerage
North America, Europe, and Asia Pacific 2010
Global Fortune 50 retail banking group
Investment banking
Europe
2010
Global Fortune 100 banking and financial
service provider
Investment banking
North America and Europe
2012
Capital markets BPO FTE mix by
segment
FTEs in numbers
100% = ~4,000
Custody & fund
administration
Brokerage
Asset
management
Asia Pacific
Nearshore Onshore
Capital markets BPO number of
contracts by buyer size
Number of active contracts
100% = 11
Small
2% 1%
4%
5%
Capital markets BPO FTE split by
delivery location
FTEs in numbers
100% = ~4,000
12%
26%
57%
Europe 45%
9%
51%
North
America
Investment banking
1
Note:
Source:
Capital markets BPO revenue mix
by geography
Revenue in US$ million
100% = ~100
Client since
97%
Offshore
91%
Large
Buyer size is defined as large (>US$10 billion in revenue), medium (US$5-10 billion in revenue), and small (<US$5 billion in revenue)
Based on contractual and operational information as on December 2013
Everest Group (2014)
Copyright © 2014, Everest Global, Inc.
EGR-2014-11-E-1329
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TCS (page 5 of 5)
Capital markets BPO technology solutions/tools
Capital markets-specific solutions/tools





Analytics
Continued deployment of FORE™ Transformation Framework in 2013. Building
of additional offering – specific process maturity assessment models for trade
settlements, corporate action, fund accounting, risk management, and private
equity
Regulatory reporting: TCS has been able to develop capabilities in ISDA
documentation
Developed an intra-firm utility operating model for processing reconciliations as a
roadmap towards market utility
Deployment of TRAPEZE™ tools set across LoBs in 2013, for business &
productivity metrics and workflow solutions
In 2012, developed the customer experience center for capital markets – a
unique way of showcasing their capabilities. Areas covered: asset management
and risk management
Cloud/BPaaS





TCS has built a solution spanning fraud detection analytics, data warehousing,
business intelligence reporting, unstructured data mining, and secondary market
research
TCS’ fraud analytics module is capable of detecting market manipulation
scenarios, such as front-running, insider trading, circular trading etc., providing a
market-wide view by cross-referencing structured and unstructured data sources
TCS provides corporate action research services to asset servicing and collateral
management team. Services include:
– Collection of financial, regulatory and live market information for predicting
corporate actions events
– Providing high-level insights & predictive analytics in form of a report using
market sources such as Bloomberg and regulatory & legal databases
Social media and mobility
TCS BαNCS has a holistic suite of solutions. Capital markets specific modules
include: Corporate actions, securities processing, transfer agency, KYC &
FATCA Compliance, and risk management
TCS BαNCS signed an agreement with Savvis, a CenturyLink company and a
global leader in cloud infrastructure for hosting and cloud-enabled service
in 2012



Developed Customer-Self-Assessment (CSA) mobility- enabled digitized app.
The application lets the customer do a self-assessment on the maturity of their
processes in comparison to the industry benchmarks. The application leverages
the process maturity models of TCS FORETM transformation framework. This
tool is launched for investment banking, wealth management, transfer agency,
and risk management
TCS has developed an IT solution for “Cross Enterprise Collaboration“ for
addressing BPS operations needs. This solution enables client communication
through an “Activity Stream” screen. The client gets the intimation via SMS/email, can follow the link, and provide a response directly on the “Activity Stream”
screen
TCS developed the listening platform, an end-to-end social media monitoring
platform and response service, which provides real-time view of what is being
discussed across online media sources. This platform scans social media and
over 40 million news, blogs, and discussion forum sites to capture posts
satisfying the keywords defined in near real-time
Copyright © 2014, Everest Global, Inc.
EGR-2014-11-E-1329
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Appendix
Copyright © 2014, Everest Global, Inc.
EGR-2014-11-E-1329
11
Everest Group classifies the capital markets BPO service
provider landscape into Leaders, Major Contenders, and
Emerging Players on the Everest Group PEAK Matrix
Everest Group Performance | Experience | Ability | Knowledge (PEAK) Matrix 1 for capital markets BPO
High
2nd or 3rd quartile
performance across market
success and delivery
capability
25th percentile
Market success
Major Contenders
Low
Emerging Players
4th quartile performance
across market success
and delivery capability
Low
1
Source:
Leaders
Top Quartile performance
across market success
and delivery capability
75th percentile
75th percentile
25th percentile
Capital markets BPO delivery capability
(Scale, scope, technology, delivery footprint, and buyer satisfaction)
High
Service providers scored using Everest Group’s proprietary scoring methodology
Everest Group (2014)
Copyright © 2014, Everest Global, Inc.
EGR-2014-11-E-1329
12
Service providers are positioned on PEAK Matrix
based on evaluation across two key dimensions
Measures success achieved in
the market. Captured through
capital markets BPO revenue
and number of clients
Market success
Leaders
Major Contenders
Emerging Players
Measures ability to deliver services successfully
Captured through five subdimensions
Delivery capability
Scale
Measures the scale of
operations (overall
company revenue,
number of FTEs, etc.)
1
Source:
Scope
Technology
Delivery footprint
Measures the scope of
services provided
across LoB,
geographies, and buyer
size
Measures the capability
and investment in tools
and technologies that
help deliver better
services
Measures the delivery
footprint across regions
and the global sourcing
mix
Buyer satisfaction
Measures the
satisfaction levels1 of
buyers across:
 Business driver
 Implementation
 Process expertise
 Relationship
management
Measured through responses from referenced buyers for each service provider
Everest Group (2014)
Copyright © 2014, Everest Global, Inc.
EGR-2014-11-E-1329
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Additionally, Everest Group confers the “Star Performers”
title to providers that demonstrate the strongest forward
movement over time on the PEAK Matrix
Market success
Methodology
Everest Group selects Market Star Performers based on the relative Year–on-Year
movement of each service provider on the PEAK Matrix
Year 1
Service
provider
Year 0
Delivery capability
Delivery capability dimension
In order to assess advancements on
capability, we evaluate the performance of
each service provider on the PEAK Matrix
across a number of parameters including:
 Annual growth in scale
 Increase in scope of services
 Expansion of delivery footprint
 Technology / domain-specific investments
Market success dimension
In order to assess advancements on market
success, we evaluate the performance of
each service provider on the PEAK Matrix
across a number of parameters including:
 Yearly ACV growth
 Number of new contract signings
 Value of new contract signings
The Top Quartile performers on each of the
specified parameters are identified and the
“Star Performer” rating is awarded to the
service providers with:
 The maximum number of Top Quartile
performances across all of the above
parameters, and
 At least one area of Top Quartile
performance advancement in either of
the dimensions
2014 capital markets
BPO Star Performers
The “Star Performers” designation relates to YoY performance for a given service provider and
does not reflect the overall market leadership position. Those identified as “Star Performers” may
include “Leaders”, “Major Contenders”, or “Emerging Players”
Copyright © 2014, Everest Global, Inc.
EGR-2014-11-E-1329
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FAQs
(page 1 of 2)
Does the PEAK Matrix assessment incorporate any subjective criteria?
 The Everest Group’s PEAK Matrix assessment adopts an objective and fact-based approach (leveraging service
provider RFIs and the Everest Group’s proprietary databases containing providers’ deals and operational capability
information). In addition, these results are validated / fine-tuned based on our market experience, buyer interaction,
and provider briefings
Is being a “Major Contender” or “Emerging Player” on the PEAK Matrix an unfavorable outcome?
 No. PEAK Matrix highlights and positions only the best-in-class service providers in a particular functional/vertical.
There are a number of providers from the broader universe that are assessed and do not make it to the PEAK
Matrix at all. Therefore, being represented on the PEAK Matrix is in itself a favorable recognition
What other aspects of the PEAK Matrix assessment are relevant to buyers and providers besides the “PEAK
Matrix position”?
 The PEAK Matrix position is only one aspect of the Everest Group’s overall assessment. In addition to assigning a
“Leader”, “Major Contender” or “Emerging Player” title, Everest Group highlights the distinctive capabilities and
unique attributes of all the PEAK Matrix providers assessed in its report. The detailed metric level assessment and
associated commentary is helpful to the buyers in selecting particular providers for their specific requirements. It
also helps providers showcase their strengths in specific areas
What are the incentives for buyers and providers to participate / provide input to the PEAK Matrix research?
 Participation incentives for buyers include a summary of key findings from the PEAK Matrix assessment
 Participation incentives for providers include adequate representation and recognition of their capabilities/success in
the market place, and a copy of their own “profile” that is published by Everest Group as part of the “compendium of
PEAK Matrix providers” profiles
Copyright © 2014, Everest Global, Inc.
EGR-2014-11-E-1329
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FAQs
(page 2 of 2)
What is the process for a service provider to leverage their PEAK Matrix positioning status ?
 Providers can use their PEAK Matrix positioning in multiple ways including:
– Issue a press release declaring their positioning/rating
– Customized PEAK Matrix profile for circulation (with clients, prospects, etc.)
– Quotes from the Everest Group’s analysts could be disseminated to the media
– Leverage the PEAK Matrix branding across communications (e-mail signatures, marketing brochures, credential
packs, client presentations, etc.)
 The provider must obtain the requisite licensing and distribution rights for the above activities through an
agreement with the designated PoC at Everest Group
Copyright © 2014, Everest Global, Inc.
EGR-2014-11-E-1329
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At a glance

With a fact-based approach driving outcomes, Everest Group counsels
organizations with complex challenges related to the use and delivery of the
next generation of global services

Through its practical consulting, original research, and industry resource
services, Everest Group helps clients maximize value from delivery strategies,
talent and sourcing models, technologies, and management approaches

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
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