Introduction

The global FAO market continues to grow and mature creating conditions for innovation. Factors such as increased buyer sophistication, intense competition among service providers, and the resultant need for competitive differentiation are driving innovation across multiple dimensions in the FAO market. These dimensions include changing value-lever mix, creating differentiated service offerings, targeting new market segments, and evolving contractual design. Developing process innovation models and frameworks to drive best-in-class performance emerged as one of the key focus areas for most service providers in recent years.

In this study, we analyze process innovation models and frameworks. We focus on:

• Process innovation in FAO
• Profiles of seven “world class-lift-shift-and-fix” offerings
• Key implications for buyers and service providers

Scope and methodology

• Coverage across more than 20 FAO service providers with multi-process capability including Accenture, ACS, Capgemini, Cognizant, EXL service, Aditya Birla Minacs, Genpact, HCL, HP, IBM, iGATE Patni, Infosys BPO, Intelenet, KPIT Cummins, Sutherland Global Services, Steria, TCS, VWA, Wipro, and WNS

Content

This report will assist key stakeholders (buyers, service providers, industry enablers) understand trends in process innovation models and frameworks in the FAO market. The increasing maturity of the global FAO market is driving innovation across multiple dimensions. These dimensions include changing value-lever mix, creating differentiated service offerings, targeting new market segments, and evolving contractual design. Developing process innovation models and frameworks to drive best-in-class performance emerged as one of the key focus areas for most service providers in recent years. Some of the findings in this report, among others, are:

• The global FAO market continues to grow and mature creating conditions for innovation. The market more than doubled in size since 2005, with increasing adoption across buyer industries, geographies, and organization size
• FAO buyer sophistication is increasing and a number of changes occurred in the FAO market since the early 2000s. Key changes include increased buyer expectations, global adoption of BPO, emergence of a cost-plus value proposition, and increased competitive intensity
• These macro-changes are driving innovation across multiple dimensions in the FAO market, we focus on changing value lever mix through process innovation in this study
• The FAO market witnessed an evolution of process optimization-based value propositions
  • Pure “lift-and-shift” offerings of the past gave way to “lift-shift-and-fix” offerings where the service provider focuses on improving efficiency and/or effectiveness vis-à-vis existing performance, thus adding value beyond just cost-arbitrage
  • “World-class lift-shift-and-fix” offerings also emerged where the service provider focuses on improving business outcomes vis-à-vis best-in-class benchmarks and not just existing/past performance
• The newly emerged “world-class lift-shift-and-fix” models differ from the earlier offerings across six key dimensions – value creation potential, methodology, breadth of scope, pricing, go-to-market, and impact on service provider positioning
• We profile seven publicly known and branded offerings by leading FAO service providers in this report:
  • Capgemini: Global Process Model © (GPM)
  • Genpact: Smart Enterprise Processes (SEP^SM)
  • IBM: Enterprise Process Innovation Continuum (EPIC)
  • Infosys: Business Value Articulation (BVA) Framework
  • TCS: FORE^SM Methodology
  • Wipro: Insights
  • Xerox-ACS: RACE Methodology