Architects of Global Business - OnProcess Technology...Real-World Delivery Solutions 35.52% Actual...

Architects of Global Business

HfS Blueprint ReportSupply Chain Management BPOExcerpt for On Process Technology

July 2014

Charles SutherlandEVP, [email protected]

Pareekh JainPrincipal [email protected]

© 2014 HfS Research Ltd. Proprietary │Page 2

Topic Page

Executive Summary 3

Research Methodology 8

Service Provider Capabilities 15

Service Provider Profile 32

About the Authors 34

Table of Contents

Executive Summary and Scope


The Supply Chain Management (SCM) BPO HfS Blueprint Report is the first application of HfSBlueprint methodology to the supply chain services marketplace. Unlike other quadrants andmatrices, the HfS Blueprint identifies relevant differentials between service providers acrossnumerous facets in two main categories: innovation and execution.

HfS Blueprint Report ratings depend on a broad range of stakeholders with specific weightingsbased on 1,355 crowd-sourced responses. Stakeholders include:

• BPO Enterprise Buyers• BPO Service Providers• BPO Industry Influencers (sourcing advisors)• HfS Analysts

Introduction to the HfS Blueprint Report: Supply Chain Management (SCM) BPO


Supply Chain Management BPO DefinitionHfS defines Supply Chain Management BPO as the operation of planning, transactional and analytical processes insupport of the physical and digital supply chains of enterprises under contract to a third party service provider. SCMBPO contracts range from being relatively short in duration (a few months) to as long as seven to ten years induration. They are related to and often intertwined with other BPO arrangements in Finance & Accounting,Procurement and Engineering Services as well as some industry specific processes such as telecom networking orretail store management. Our definition of SCM includes seven different service offerings with BPO offerings beingstructured either within a single offering or a mix of offerings up to and including all seven offerings at once. At thispoint in the still relatively early development of this market most outsourcing contracts include one or at best a fewof these offerings together at one time.

Order Management. The acceptance, processing and exception management either of inbound componentorders or of outbound final product/service orders from end clients.

Inventory Management. The forecasting, planning and managing inventories of components, spare parts or endfinished products.

Manufacturing Management. The planning and managing the flow of inventory in the manufacturing process.

Transport Management. The planning and optimizing transportation of inbound and outbound orders includingthe creation of an overall transportation network on behalf of an enterprise client.

After Market Services. The administration of and planning for the management of warranties, returns, repairsand other after purchase requirements on product.

Master Data Management. The creation, maintenance and analysis of key master data created from planning,sourcing, manufacturing, storing and delivering products and services.

Sustainability Services. Services related to setting and maintaining strategies for sustainability in supply chaindesign and operation as well as meeting the increasing regulatory framework around sustainability.


Supply Chain Management BPO Scope of Service Offerings

OrderManagement

InventoryManagement

Manufacturing Management

Transport Management

After Market Services

Master Data Management

Sustainability Services

Order EntryInventory

Strategy and Forecasting

Managing Materials Flow

Shipping and Freight Requests

RMA Management Creation

Carbon Footprint

Management

Order Maintenance

InventoryReporting

Long Term Capacity Planning

Transportation Strategy

Approving Returns Cleansing

Green Supply Chain

Management

Order Reporting Replenishment Ordering

CarrierManagement

Customer Service Optimization

Forecasting Spare Parts Planning Operating a 4PL Warranty

Management Reporting

Demand Planning and

Promotion Management

CFPR AcrossClients

Transport Planning

Control Tower Services

Order Analytics Inventory Analytics

ManufacturingAnalytics

Transport Analytics

After MarketAnalytics

Sustainability Analytics

Indirect and Direct Procurement/MRO is out of scope for this Blueprint


Key Highlights – State of The SCM BPO Market

A New Market With Huge Untapped Potential. Our research sizes the potential global SCMBPO market could be as large as $300 billion even as the current market size is perhaps $1.5billion.

A Heterogeneous Market. The 13 service providers we evaluated for this Blueprint approachthis market in very different ways. Sometimes that approach was dictated by therequirements of the original “anchor clients” and in other cases it was a function of consultingor technology skills in supply chain. We also identified 11 more service providers who addfurther diversity to the mix of approaches and capabilities in this emerging market.

SCM BPO Market Will Move Beyond Early Adopters. Some of the companies who areadmired for their competitive and excellent supply chains are the early adopters of SCM BPOalong with some of the companies facing tough external environment and are using SCM BPOas a transformation lever. It is the huge middle segment which has not embraced SCM BPO yetwhich is both challenge and opportunity.

Analytics, Consulting, Visibility, Account Management & Strong Customer ChampionsSeparates Winners From Others. There are four service providers in Winner's circle –Accenture, Capgemini, Entercoms & HAVI Global Solutions. Four things are common acrossall four winners - strong consulting and analytics capabilities, presence of visibility or controltower platforms, great account management as validated by customers and strong customerreferences or customer champions who have shared their inspiring and transformationaljourney along with the contribution of the service providers.

Research Methodology


More than 3,200 data points were collected frommore than 200 live supply chain management BPOcontracts, covering 13 major service providers withadditional smaller profiles on 11 additional serviceproviders in SCM BPO.

Data was collected in Q2 2014, covering buyers,providers, and advisors/influencers of supply chainmanagement BPO.

Tales from the Trenches: Interviews with buyerswho have evaluated service providers andexperienced their services. Some are supplied byservice providers, but many are interviewedthrough interviews conducted with HfS ExecutiveCouncil members and participants in ourextensive market research.

Sell-Side Executive Briefings: Structureddiscussions with service providers were intendedto collect data necessary to evaluate theirinnovation, execution and market share, anddeal counts.

HfS “State of Outsourcing” Survey: Theindustry’s largest quantitative survey, conductedwith the support of KPMG, covering the views,intentions, and dynamics of 1,355 buyers,providers, and influencers of outsourcing.

Publicly Available Information: Financial data,website information, presentations given bysenior executives, and other marketingcollateral.

Research Methodology for the Supply Chain Management BPO Blueprint

This Report Is Based On:

Participating Service Providers

Data Summary


Evaluation Criteria

Two major factors:

• Execution represents service providers’ ability to deliver services. It includes:

– Solutions in the Real World– Quality of Customer

Relationships– Market Share

• Innovation represents service providers’ ability to improve services. It includes:

– Vision for End-to-End Process Lifecycle

– Integration of BPO and ITO– Vision to Tailor Solution for

Specific Industries– Leveraging External Drivers

Criteria Weighting

Criteria are weighed by crowdsourcing weightings from the four groups that matter most:

• Enterprise Buyers [$5B+] (20%)• Buyers (20%)• Service Providers (30%)• HfS Research Analysts Team (20%)• Advisors, Consultants, and Industry

Stakeholders (10%)

Weightings from this report come from HfS’s January 2013 State of Outsourcing Study

Key Factors Driving the HfS Blueprint


Provider G Provider J

Provider B Provider G

Provider A Provider B

vs.

vs.

vs.

…

After service providers respond to HfS’s BlueprintRFI, and after client references and fact checkinghave been completed, HfS analysts conduct apaired comparisons survey of service providers ineach category of evaluation. This can be as manyas 1,100+ unique service provider comparisons.

The data/rankings are compiled and comparedacross all provider comparisons to identifyinconsistencies within the scores.

After a further data refinement, the criteriaweightings are used to give each service providera score in each evaluation criteria component.

Once aggregation and scoring are complete, theservice providers’ scores are plotted, producingthe HfS Blueprint.

How the HfS Blueprint Scores are Compiled


EXECUTION 73.87%Quality of Customer Relationships 22.95%

Quality of Account Management Team 9.83%How Service Providers Engage Customers and Develop Communities 6.00%How Service Providers Incorporate Customer Feedback 7.12%

Real-World Delivery Solutions 35.52%Actual Delivery of Services for Each Sub-Process 13.72%

Order Management 3.20%Inventory Management 3.20%Transportation Management 2.06%After Market Service 3.20%Master Data Management 2.06%

Geographic Footprint and Scale 9.00%Usefulness of Services to Specific Client Needs of All Sizes 12.80%

Flexibility to Deliver End-to-End Solutions and Point Solutions 5.83%Experience Delivering Industry Specific Solutions 6.97%

Flexible Pricing Models to Meet Customer Needs 15.40%

INNOVATION 26.13%Vision for End-to-End Process Lifecycle 9.05%

Concrete Plans to Deliver Value Beyond Cost and Investment in Future Capabilities 3.46%Integration of Technology Into Business Process 3.69%Continuous Improvement Methodology and Capability 1.90%

Vision for Where the SCM BPO Market is Headed and How To Respond as a Service Provider 7.10%Ability to Leverage External Value Drivers 9.98%

Integrated Analytics and Insights Into Delivery 6.48%Incorporate Control Tower Solutions 3.50%

TOTAL 100.00%

HfS Blueprint Scoring Percentage Breakdown


EXECUTION How well does the provider execute on it's contractual agreement and how well does the provider manage the client/provider relationship?

Quality of Customer Relationships How engaged are providers in managing the client relationship based on the following metrics: quality of account management, service provider / client engagement, and incorporation of feedback?

Quality of Account Management Team What is the quality level of professional skills in the account management team?

How Service Providers Engage Customers and Develop Communities

How well does the service provider engage clients and develop client communities?

How Service Providers Incorporate Customer Feedback

How have service providers taken feedback and incorporated that feedback into their product/solution?

Real-World Delivery Solutions Does the solution provided compare favorably to the service agreed upon when taking into account delivery of services for each sub-process and geographic footprint and scale?

Actual Delivery of Services for Each Sub-Process

Taking into account each sub process and the entire macro process, does each sub-process sum to successful delivery of the service being provided For example in the SCM BPO macro process of Order Management, are all sub-processes being delivered upon successfully?

Geographic Footprint and Scale Specific to the category, to what degree do service providers have geographic locations that offer strategic value and do they have scale?

Usefulness of Services to Specific Client Needs of All Sizes

How flexible and experienced are providers when tailoring solutions based on client size, location, and type of solution (end-to-end and single point)?

Flexibility to Deliver End-to-End Solutions and Point Solutions

How flexible are providers with delivering multi-process end-to-end solutions vs. single point solutions?

Experience Delivering Industry Specific Solutions

How experienced are providers at delivering solutions to the specific needs of different industries?

Flexible Pricing Models to Meet Customer Needs How flexible are providers when determining pricing of contracts? Are they willing to make investments into the client’s firm for long term growth?

Execution Definitions


INNOVATION Innovation is the combination of improving both services and business outcomes.

Vision for End-to-End Process Lifecycle The strategy for delivery services to each part of the processes "value chain". For example, in Finance and Accounting, the components of the value chain may include order to cash, record to report, and procure to pay. In SCM BPO, the components of the value chain include order management, inventory management, transportation management, after market service, and master data management.

Concrete Plans to Deliver Value Beyond Cost and Investment in Future Capabilities

Clear understanding of what value levers exist and how the service provider will deliver that value. Examples of value may include labor arbitrage, technology, analytics, quality, revenue, global scale, and flexibility.

Integration of Technology Into Business Process

How the service provider integrates applications with manual labor to improve value to clients. Service providers may provide cloud-enabled technology, SaaS, business platforms, BPaaS workflow, social , or mobility applications. Service provide may also develop in-house software and tools for providing point solutions for addressing specific SCM pain points such as revenue leakage, inventory optimization, network optimization, freight measurement etc.

Continuous Improvement Methodology and Capability

How well does the provider execute on improving business process and capabilities of their solutions?

Vision for Where The SCM BPO Market is Headed and How to Respond as a ServiceProvider

Does the provider have a vision for how the mortgage market is developing and how they need to respond as a service provider to these changes both in terms of specific capabilities and in their commercial and operating approach?

Ability to Leverage External Value Drivers How well have providers integrated external value drivers into their services? Examples include: use of analytics and control tower.

Integrated Analytics and Insight into Delivery How well does the provider leverage analytics and insights into their solutions?

Incorporate Control Tower Solutions How well does the provider incorporate the control tower solutions in the delivery?

Innovation Definitions

Service Provider Capabilities


HfS Blueprint 2014: Supply Chain Management BPOIN

NO

VATI

ON

EXECUTION

High Performers

Winner’s Circle

Capgemini

AccentureHAVI Global Solutions

Entercoms

Infosys

OnProcessGenpact

Wipro

EXLWNS

Tech Mahindra

Celestica SC Managed Services

Source: HfS Research 2014

TCS


EXECUTION

• Capgemini Delivers (Winner’s Circle)– Capgemini was rated as excellent by clients in the delivery of SCM

BPO services across value chain.– The greatest challenge for Capgemini is in the communication of a

broader market vision through more thought leadership in SCM BPO.

• Accenture Engages Customers (Winner’s Circle)– Accenture uses client initiatives created by Supply Chain consulting

practice such as the Accenture CSCO (Chief Supply Chain Officer) Circle which has over 75 members to share common SCM challenges and opportunities and to educate about SCM BPO.

– The greatest challenge for Accenture is to avoid competition and ensure collaboration between SCM BPO and strategy (fka management consulting) resources in solving customer problems especially in areas such as forecasting and analytics.

• Infosys Manages Customer Accounts Very Well (High Performer)– Infosys scores highly when it comes to the “listening” capabilities of

the account management and delivery teams for clients. They are frequently cited as being easy to work with and highly responsive to the short and long terms needs of clients of all sizes.

– The greatest challenge for Infosys is to develop a broad set of SCM capabilities including control tower capabilities.

• Wipro Has Extensive Geographical Footprint (High Performer)– Wipro has built a global scale in delivery for supply chain services

with 15 delivery centers spanning from Brazil to Australia.– The greatest challenge for Wipro to become a more comprehensive

partner in SCM technologies and supporting services.

INNOVATION

• Entercoms Focuses on Analytics (Winner’s Circle)– Client references rate Entercoms’ ability to provide

operational insights from statistical models as excellent and of critical value to their operations. Roughly 65% of Entercoms’ staff are analytics resources.

– The greatest challenge for Entercoms is getting broader recognition in the SCM BPO market across new verticals.

• HAVI Global Solutions Delivers Value Beyond Cost In QSR Space (Winner’s Circle)

– Reference customers have rated HAVI Global Solutions' (HGS) capabilities in QSR space as exceptional and cited examples how they have continuously improved by evolving its offering and delivered value beyond cost.

• OnProcess Thrives On Technology (High Performer)– OnProcess has developed a configurable order management

engine that exchanges data with client ERPs and allows for the processing of orders with minimal manual intervention. This engine is integrated with 3PLs and field labor partners to enable an integrated service supply chain ecosystem.

• Genpact Innovating For Industrial Vertical (High Performer)– Genpact is orienting its SCM BPO offering towards Industrial

Asset Optimization by focusing on the linkages between engineering, sourcing and supply chain. This is a new positioning which requires client case studies but it is market differentiated.

Major Service Provider Dynamics – Highlights


All 13 Service Providers Are Among The Top 5 In At Least One Of The Service Offerings

Leaders for Inventory Management SCM BPOLeaders for Order Management SCM BPO

Leaders for Transportation Management SCM BPOLeaders for After Market Service SCM BPO


Product Value Loop – Interaction Among F&A, Procurement, Engineering Services & Supply Chain

Starting Points For SCM BPO

There are different starting points for entering into SCM BPO from adjacencies as seen in Product Value Loop:

• Finance & Accounting• Procurement • Engineering Services



Multi-Faceted Value Proposition Of SCM BPO

SCM BPO Value Proposition

Delivers Business Outcomes Of Revenue

Growth, Inventory Reduction, Delivery Time

Reduction, Operating CostReduction

Analytics Is Embedded Across

SCM Value Chain And Helps In Problem Analysis And

Decision Making

Control Tower -A Platform For Visibility,Analytics, Automation &

Execution

Addresses Painpoints Of

MNCs (Standardization, Visibility, Efficiency) & SMBs

(Cost, Software, Skills)

Physical FootprintAcross Globe

Along With PartnersFor Location Based

SCM services

Improves Firm’s Cost Of Goods Sold ( COGS).

Estimated Impact Over $ 3 Trillion Cost Base


Pain Points Of Large Enterprises Solved By SCM BPO

Pain Points Reasons Impacts SCM BPO Solutions

Lack Of Visibility

• Complex supply chain of OEM suppliers who in turn have hundreds or thousands of suppliers

• Global networks of manufacturing, warehouse and delivery locations

• Production and delivery delays

• Working capital and cost increases from excess inventory

• Delays in responding to customer requests

• Control Tower

• Inventory Visibility & Segmentation

Lack Of Standardization

• Different regions, business units or products have different processes

• Cost increases from extra overheads

• Delays in order processing and delivery

• Delays in responding to customer requests

• Process Standardization & Simplification

Inefficiency• Processes are inefficient, consists of many non-value

adding steps and not benchmarked to be best in class

• Delay in order processing and delivery

• Cost increases from extra overheads

• Automation

Customer Satisfaction Levels

• Decisions made in the supply chain may not have been considered in terms of the ultimate customer satisfaction impact

• CSAT declines leading to customer churn and decreasing revenues over time

• Analytics

Forecast Accuracy Level

• Forecasts may be done poorly or without access to all the data which could potentially impact the decisions

• Either stock outs or excess inventory

• Knock on impacts across products of critical component SKUs if demand is poorly forecasted

• Forecasting Analytics

Revenue Leakage

• Systems and processes may not be designed to look at fraud or waste because of order dropouts, wrong billing files, invoice mismatches, wrong inventory accounting etc

• Revenue and margin deterioration • Order & Revenue Analytics

Silos• Individual units within the enterprise may have been

permitted or rewarded to plan on their own regardless of impacts elsewhere of their decisions

• Either stock-outs or excess inventory • Integrated Business Planning



Pain Points Of SMBs Solved By SCM BPO

Pain Points Reasons Impacts SCM BPO Solutions

Non Scale In Transportation

Costs

• Lack of scale and buying power to get best rates

• High transportation costs and possible delays in delivery

• Aggregation Of Demand

Planning Expertise

• Limited or no resident skills in planning and forecasting

• Either stock outs or excess inventory

• High costs to maintain expected service levels

• Planning, Forecasting and Analytics

Affordable Technology

• No budgets for costly software suites

• Difficulty in planning and management

• Delay in delivery, increase in cost and delay in responsiveness to customer change requests

• Tools and Point Solutions sometimes financed by Opex reductions

Managing Supply Chain

• For SMBs, supply chain management is a challenge. Big companies can aid the management of their supply chain challenge with their buying power. SMBs often rely on a good product to offset a poor to average supply chain

• Increase in costs, delivery time and response time with ripple impacts on CSAT and future revenue potential

• Managed Services


The Current Maturity Of SCM BPO Services

OrderManagement

InventoryManagement






Order EntryInventory

Strategy and Forecasting

Managing Materials Flow

Shipping and Freight Requests

RMA Management Creation

Carbon Footprint

Management

Order Maintenance

InventoryReporting

Long Term Capacity Planning

Transportation Strategy

Approving Returns Cleansing

Green Supply Chain

Management

Order Reporting Replenishment Ordering

CarrierManagement

Customer Service Optimization

Forecasting Spare Parts Planning Operating a 4PL Warranty

Management Reporting

Demand Planning and

Promotion Management

CFPR AcrossClients

Transport Planning

Control Tower Services

Order Analytics Inventory Analytics

ManufacturingAnalytics

Transport Analytics

After MarketAnalytics


Mature Competitive market with examples of service offerings and customer case studies from large number of service providers

Nascent Market in development with very few examples of service offerings and customer case studies



SCM BPO Services Applicability To Different VerticalsIndustryVerticals

OrderManagement

InventoryManagement






QSR, Retail

CPG

Manufacturing

Hi-Tech

Telecom ** Customer Service

Media & Entertainment

**Customer Service

Transportation

Life Sciences

Oil & Gas

Utilities

Mining & Resources

BFSI



Current Pricing Models Deployed In SCM BPO

72%

14%

9%5%

% SCM BPO Contracts

FTE Based Transaction Based

Project Based Pay For Performance

Pricing For SCM BPO

The pricing in SCM BPO is predominantly FTE based.

HfS’ discussions with both buyers and service providers have indicated a growing demand for more transactional and gain-share based pricing models.

The growing use of platforms will enable transaction based pricing but there are challenges in gain-share based pricing models because of difficulty in measurements and base lining. The pay for performance model which is a variant of gain-share is used in some SCM BPO contracts. In pay for performance some value of service provider fee is at risk.

Some forecasting or analytics engagement are fixed price or project based.



Market Size Of SCM BPO

$ 3 Trillion Supply Chain Cost BaseIn The Global 2000 (ex BFSI)

SCM BPOCan Impact

10% Of Supply Chain

Cost Base

$300 BillionPotential SCM BPO Market

Current Size ~0.5%

• In terms of potential addressable spend, SupplyChain Management BPO (SCM) represents one ofthe greatest untapped markets in service today.

• HfS calculations of current Service Providerrevenues from SCM BPO are $1.5 Billion for 2014(excluding 3PL/4PL and Warehousing costs) whichrepresents around 0.5% of the potentialaddressable market just in the large globalenterprise market.

• The opportunities for Service Providers to grow thismarket are limited only by the vision of the leadersof these providers to take on additional scope andto make the required investments.

• It isn’t necessary to be a dedicated SCM BPOservice provider either as compelling valuepropositions for clients can come from IT centricproviders, BPO led providers and analyticscompanies as well.


Geographical Footprint of SCM BPO Delivery

UNITED STATES of AMERICA

CANADA

ALASKA (USA)

MEXICO

COLOMBIA

VENEZUELA

BRAZILPERU

BOLIVIA

HONDURAS

NICARAGUA

ECUADOR

GUYANA

SURINAM EFRENCHGUIANA

COSTA RICA

PANAM A

GUATEM ALA

CUBA

PARAGUAY

ARGENTINA

URUGUAY

CHILE

GREENLA ND

ICELAND

UNITEDKINGDOM

REPULIC OFIRELAND

NORWAY

SWEDEN

FINLAND

DENM ARK

ESTONIA

LATVIA

LITHUANIA

POLANDBELARUS

GERMANY

CZECHREPUBLIC

NETHERLANDS

BELGIUM

FRANCE

SPAIN

PO

RT

UG

AL

SWITZ.

AUSTRIA

SLOVAKIA

HUNGARY

ROMANIA

BULGARIA

ITALY

UKRAINE

TURKEYGREECE

SYRIA

IRAQ

SAUDIARABIA

YEMEN

OMANUAE

EGYPTLIBYA

ALGERIA

MOROCCO TUNISIA

WESTERN SAHARA

MAURITANIAMALI

NIGER CHADSUDAN

ETHIOPIA

SOMALIAUGANDA

SENEGAL

GUINEA

LIBERIA

COTED’ IVOIRE

BURKINA

GHANA

NIGERIA

CAM EROON

CENTRALAFRICAN REPUBLIC

GABONCONGODEMOCRATICREPUBLIC OF

CONGO

KENYA

TANZANIA

ANGOLA

ZAMBIA

NAMIBIA

BOTSWANA

ZIMBABWE

REPUBLICOF SOUTH

AFRICA

M ADAGASCAR

RUSSIAN FEDERATION

KAZAKHSTAN

GEORGIA

IRAN

UZBEKISTAN

TURKMENISTAN

AFGHANISTAN

KYRGYZSTAN

TAHKISTAN

PAKISTAN

INDIA

CHINA

NEPAL

MYANMAR

THAILAND

SRILANKA

MONGOLIA

NORTHKOREA

SOUTHKOREA JAPAN

TAIWAN

CAM BODIA

LAOS

VIETNAM

PHILIPPINES

MALAYSIA

INDONESIAPAPUA

NEW GUINEA

AUSTRALIA

NEWZEALAND

• SCM BPO delivery presence in 20+ countries across all regions.• Geographical footprint is important in SCM BPO as it is often part of broader

location based SCM solutions including transport, warehousing, inventory ownership etc.



Analytics In SCM BPO

Order Analytics

• Forecasting & Demand Planning

• Promotional Analytics

• Order Fill Analytics

• Cost To Serve Analytics

• Service Level Optimization

• Revenue Leakage or Fraud Analytics

• All major offerings in SCM BPO value chain have an analytics capability or sub-process. • Master Data Management is an enabler for analytics in SCM BPO.

Inventory Analytics

• Inventory Cost Optimization

• Safety Stock Recommendation

• SKU Level Inventory Optimization

• Inventory Deployment Optimization

• Working Capital Analytics

• Write-off Modelling

• Aged & Slow Moving Analytics

Manufacturing Analytics

• Capacity Optimization

• Production Planning & Scheduling

• Line Loading & Line Balancing

• Asset Optimization & Disposition

• Predictive Maintenance Analytics

• Material Planning• Cost to

Manufacture Analytics

TransportAnalytics

• Shipment Scheduling Optimization

• Route Optimization

• Freight Cost Optimization

• Warehouse Analytics

• Fleet Modelling• Freight

Measurement Analytics

• Predictive Fleet Maintenance Analytics

• Distribution Analytics

After Market Analytics

• Predictive Parts Forecasting

• Stocking Strategy• Warranty

Analytics• Customer

Satisfaction Analytics

• Forward Location• Services Planning• Reliability

Analytics & Part Failure Rate Modelling

• Return Logistic Analysis

• Field Force Analytics


• Energy Optimization & Analytics

• Carbon Footprint Analytics

• Green House Gas (GHG) Emission Analytics

• Green Routing• Lifecycle Water

Usage Analytics• Regulatory &

Environmental Compliance Analytics

OrderManagement

InventoryManagement







Control Tower In SCM BPO

OrdersPO To Shipment

Logistics & Transportation

After MarketServices

The Concept - Control Tower in SCM BPO is a visibility platform analogous to an air traffic control tower you would find at an airport. At the airport the tower collects all the data to control the ground movements, landings and takeoffs. Similarly in Supply Chain a Control Tower collects the data on the movement and location of goods to create visibility and insight up and down the enterprise supply chain

The Significance- If it cannot be measured, it cannot be improved. Real-time visibility to operational measurements is brought together in a single place to enables operations beyond what can be seen or done in a silo.

Model Framework For ControlTower

Cloud Platform With 3 Levels• Level 1: Provides end to

end visibility across extended supply chain

• Level 2: Enables analytics on data collected across extended supply chain

• Level 3: Coordinates execution, automation, continuous improvement and process orchestration of supply chain processes

Control Towers in SCM BPO can provide visibility into orders, inventory, logistics and after-market services. Different SCM value chain functions may have their own Control Towers. Control Towers may also include functionality to provide full visibility across the SCM value chain.

Inventory

Key SCM BPO Vendors With Control Tower Solutions


Issues for SCM BPO Service Providers In The Current Market

Creating Clarity For SCM BPO Offerings With Sales Teams. In many service providers, the sales teams are notaccustomed to speaking with and selling to supply chain executives and so may be more reluctant to promote SCMofferings than say F&A or Procurement. SCM Delivery and Marketing leads need to be even more clear about whattheir offerings can address and how they operate in order to increase the penetration of SCM BPO into the market.

When Is Order Management Part of F&A Or Part Of SCM BPO. For many service providers, order managementopportunities are as much a part of their F&A offerings as they are part of SCM BPO. The same can be true forother SCM processes when it comes to Procurement or Engineering. HfS recognizes that the boundaries aremalleable around SCM BPO when it often comes down to where in the organization the key buyer(s) sit in terms ofhow they actually describe the solution that has been purchased from a service provider.

High End To Service Providers But Not To Buyers. One recurring phenomena we see in SCM BPO is that serviceproviders often see SCM as one of their “higher end” offerings because of use of SMEs, Transformation, Analyticsand Platforms but Buyers often see the same solution as the “lower end” of their SCM processes. As a result, SCMBPO service providers need to recognize that the view from the client side may be different but equally valid astheir own way of thinking and not to get too carried away by how leading-edge these processes may be.

Making SCM BPO Specific Cross-Client Investments. SCM BPO is still a relatively new offering for many BPO serviceproviders and as a result it some service providers, it may be more of a collection of related contracts than a fulloffering in its own right with cross-client investment budgets and an offering leadership team. HfS believes thatSCM BPO is such a significant potential opportunity that all service providers should be moving towards acentralized offering and investment model rather than funding silo investments at the contract or client level.

Is It BPO Or Consulting. One issue for SCM BPO service providers with deep SCM consulting units is that manyclient requirements could be addressable with either BPO based or consulting based solutions. This creates internalconfusion (and sometimes client confusion as well) in the sales and solutioning process and is one of the keyreasons why those service providers need to invest in strong offering skills so that the boundaries of differentpossible client solutions can be shaped and well communicated to all.


More Issues for SCM BPO Service Providers in the Current Market

Absence of Third Party Advisors and RFPs. One of the issues for service providers wanting to rapidly growth theirSCM BPO revenues is that this remains a market today with limited involvement of third party advisors and also ofbroad market RFIs/RFPs. Instead, most opportunities are developed sole source and so that further emphasizes theimportance of having a clear offering for sales teams as well as the value that can be created by a SCM ManagementConsulting practice who are out with clients every day in this process.

Orienting Around A Vertical Or Horizontal Focus. SCM BPO service providers have entered this market either froma particular industry vertical or from a cross-industry horizontal approach. HfS believes that either are valid at thisstage in the development of the SCM BPO market it’s just a matter of sticking with one approach and then makingthat come through in thought leadership and marketing material in a consistent manner in terms of the businessoutcomes and pain points that SCM BPO can address for clients of that service provider.

Role Of Partnerships. There are no SCM BPO service providers who can solve for all the pain points of an end toend client supply chain on their own. Instead partnerships, whether for technology, 3PL/4PL services, inventoryownership, warehousing management or more are an integral part of value creating solutions. Therefore one of thekey issues for SCM BPO service providers as they grow their business is how do they approach partnerships and howgood are they at managing the ones they do create over time.

The Service Provider Landscape Is Fluid. While for the purposes of our detailed SCM BPO Blueprint Axis, we havelooked at 13 different service providers, we know that there are many more out there today with established oremerging SCM offerings. Later in this report we look at 11 more service providers who are in the market and overtime we will cover many more, especially new and emerging service providers who see the huge addressableopportunity created by better solving for client SCM pain points than those clients can do on their own today.

Service Provider Profile


OnProcess

Relevant Acquisitions/Partnerships Key Clients Global Operations Centers Technology Tools, Platforms & Control Tower

• OnProcess has partnered with a number of companies to provide complete “Control Tower" offering to its customers.

• Partnerships for Transportation/Depot/WH logistics: Flash Logistics, UPS and Arrow to bring end to end solutions to customers.

• Partnership for field tech : Field Solutions to provide technicians for onsite service and installation support.

• Technology partnerships: SAP, Nextnine, Interactions and Corrigo.

100+ After Market Services clients and on average 3 different engagements per clients. The clients include:• Global Market Leader in Telecom and

Networking Technology• Market Leader Wireless Carrier• Major US Broadband and Cable Company• Major Computer Equipment and Peripherals

Manufacturer• Leading Storage Manufacturing Company • Medical Devices Market Leader

Locations: 5 delivery centers across: • North America (US)• Europe (Bulgaria)• Asia Pacific (India)• Caribbean

• Control Tower: It provides visibility and transparency to end to end operations.

• OnProcess Dispatch 360: It automates workflows and integration with 3PL partners.

• CE 360: It brings visibility into client’s customer experience touch points.

• Triage 360: It reduces number of dispatches by improving dispatch accuracy.

• Proprietary CRM, Order Management Tools

Strengths Challenges

• Strong in After Market Services. Clients and competitors noted the depth of expertise of OnProcess in after market processes and the breadth of solutions provided.

• Vertical Market Expertise. OnProcess has strong vertical expertise in Telecom (Broadband, Mobile, Cable Operators), Hi-Tech (Storage, Servers) and Medical Devices which together account for 90% of OnProcess business. Clients cited the depth of knowledge that OnProcess had in both their specific process requirements as well as best practices in aftermarket in their vertical segments.

• Integration Of Technology Into Business: OnProcess has developed a configurable order management engine that exchanges data with client ERPs and allows for the processing of orders with minimal manual intervention. This engine is integrated with 3PLs and field labor partners to enable an integrated service supply chain ecosystem. OnProcess can also deploy M2M systems to predict aftermarket support needs.

• Strong Control Tower Capability. OnProcess Control Tower provides analytics, visibility and transparency to end to end after market service operations.

• Vertical Market Growth. The core of the business for OnProcess is in telecom and hi-tech but the services provided are applicable in a greater range of verticals. One of the key challenges for the company is to expand into additional verticals with the same degree of process awareness that it has in its current core business.

• Limited Geographic Footprint. OnProcess has established but is still growing its geographical footprint. Clients cited opportunities for further coverage in Latin America and Asia in response to the global footprint of key clients and prospects.

• Analytics. While OnProcess has significant analytics capabilities as a result of Control Tower capabilities and other efforts to turn client data into actionable intelligence it is not a a major distinct offering for OnProcess. We believe that the market opportunity may be larger and that competitors are placing greater emphasis on this area for the future.

Blueprint Leading Highlights

• After Market Service

• Vertical Market Expertise

• Integration of Technology

• Control Tower

High Performer

Order Management

Inventory Management






Focused service provider with strong automation and after market services capabilities

About the Authors


[email protected]

Charles SutherlandEVP, Research ̶̶ Dallas, Texas

Overview• Oversees the entire research agenda for HfS while also maintaining coverage

personally over supply chain, procurement and mortgage services.• Researches and writes about BPO service provide strategies and how automation and

SMAC (Social, Mobility, Analytics and Cloud) is creating value for buyers and newsources of growth for the BPO marketplace.

• Extensive experience in thought leadership, strategy development, acquisitions,business development and long term investment planning in BPO.

Previous Experience• Growth & Strategy MD for Accenture’s multi-billion dollar Operations Growth Platform• Chief Strategy Officer for a $500M BPO Service Provider• Growth & Strategy for Application and Infrastructure Outsourcing, Accenture• Growth & Strategy for Communications, Media and High Tech OG, Accenture• Media & Entertainment Strategy Consultant, Accenture• Marketing Director, Olivetti

Education• MBA from INSEAD in Fontainebleau, France• Honors BA in Economics and Political Science from the University of Toronto.

mailto:[email protected]


[email protected]

Overview• Over 10 years’ business experience in buy side, advisory and delivery in the global

outsourcing industry across US, Europe and Asia.• Coverage areas in HfS are pricing, service provider analysis, offshore markets,

engineering related horizontals such as supply chain, procurement and engineeringservices, and engineering related verticals such as telecom and manufacturing.

• Author of the book “Who is that lady?”• A strategist, researcher, innovator and writer.

Previous Experience• Business Planning Manager (Asia Pacific), Emerson Network Power• Manager, Outsourcing Advisory, neoIT• Software Engineer, Geometric Global

Education• MBA, Indian Institute Of Management (IIM), Bangalore, India• B. Tech, Indian Institute Of Technology (IIT), Delhi, India

Pareekh JainPrincipal Analyst, Bangalore, India



HfS Research is the leading independent analyst authority and community for the global business services andoutsourcing industry. HfS serves the research, governance and strategy needs of business operations and IT leadersacross finance, supply chain, human resources, marketing, and core industry functions. The firm provides insightful andmeaningful analyst coverage of the best business practices and innovations that impact successful business outcomes,namely talent development, process automation and outsourcing, global business services frameworks, mobility,analytics and social collaboration. HfS applies its acclaimed crowdsourced Blueprint MethodologyTM to evaluate theperformance of service providers in terms of innovating and then executing against those business outcomes.

In addition to researching business operations strategies and their technology enablement, HfS educates and facilitatesdiscussions among the world's largest knowledge community of enterprise services professionals, currently comprising145,000 subscribers. HfS Research facilitates the HfS Sourcing Executive Council, the acclaimed elite group of sourcingpractitioners from leading organizations that meets bi-annually to share the future direction of the global servicesindustry and to discuss the future enterprise operations framework. HfS provides sourcing executive council memberswith the HfS Governance Academy and Certification Program to help its clients improve the governance of their globalbusiness services and vendor relationships.

In 2013, HfS was named first in rising influence among leading analyst firms, according to the 2013 Analyst Value Survey,and second out of the 44 leading industry analyst firms in the 2013 Analyst Value Index. In 2010 and 2011, HfS wasnamed “Analyst of the Year” by the International Institute of Analyst Relations (IIAR), the premier body of analyst-facingprofessionals and achieved the distinctive award of being voted the research analyst industry's Most Innovative AnalystFirm in 2012.

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To learn more about HfS Research, please email [email protected].

About HfS Research

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