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The Client

The client, a leading global third party BPO, delivers voice and transaction processing services to Fortune 500 corporations. The company's solutions include contact center management, transaction processing, finance and accounting, IT and process consulting services. Focused on banking and finance, insurance, retail, telecom, IT, travel and hospitality verticals, the company has been ranked among Deloitte's Top 50 fastest growing technology companies in Asia Pacific for the years 2005 and 2006. Started in 2000 with just 25 employees operating out of a single facility in India, it has grown from a regional BPO to one of the leading global suppliers of BPO services with over 25,000 employees and a global operational footprint spanning India, US, Europe, and the UK.

Business Context

The company was formed in 2000 as a joint venture between HDFC and TCS. TCS exited the venture in 2004 and HDFC was in discussions with Barclays Bank, UK to set up a new joint venture. This change of ownership meant a change in business direction and focus to align its business objectives with that of the new joint venture partner. The company wished to model its business comprehensively to encapsulate all the business assumptions as well as to run scenarios to determine the critical business drivers and their impact on business results. It was looking for a highly parameterized business scenario planning tool to facilitate the business planning process between the joint venture partners.

Prayag was chosen for the engagement on the strength of its understanding of the BPO industry, capability in business modeling and the ability to handle an iterative strategic planning exercise.

Prayag Solution

Prayag initiated the business modeling exercise by participating in discussions with the client's management team to understand the service mix, projected revenues, proportion and nature of committed business and company outlook on downstream planning. Drawing upon its deep understanding of the BPO business, the Prayag team identified all the parameters relating to the market, people and infrastructure that would have an impact on the business. Then, the complete business value chain from target revenues to downstream execution was modeled to understand the interplay and significance of various factors.

For example, knowing the revenue target for the year, and the likely client and service mix, the number of resources needed would be derived. This would be further broken down by level, and buffered for attrition and temporary non availability of people (leave, skill mismatch etc). The required numbers would be mapped with the existing numbers to determine the recruitment target and so on.

The exercise involved iterations as the JV partners were evolving their business plan through discussions. The Prayag team worked alongside the business teams to fine tune the model to reflect the latest thinking.

Says Sudha Kumar, CEO, Prayag Consulting, "The whole exercise was conducted in close collaboration with the client's team. Our ability to work with top management and to handle a high impact and high pressure exercise came in handy."

Benefits

The business model prepared by Prayag gave the company a strategic tool which helped in restructuring its business at a crucial phase. The model saw the client through the exit of one of its joint venture partners and re-organizing the business with a new partner.

Says the CEO of the client company, "All our hard work has finally resulted in a partnership of two renowned organizations, which I am sure will help us become a leading BPO in India. HDFC on the 16th of August signed the deal with Barclays Bank Plc for sale of its 50% stake in our company. Your involvement as part of the deal team has been a key factor in making this deal happen."