GLOBAL BUSINESS SERVICES:

AGILITY IN VOLATILE MARKETS & OPPORTUNITY FOR GLOBALIZED ECONOMIES

Belfast

Tom Olavi Bangemann

SVP Business Transformation , The Hackett Group

October, 2013

Statement of Confidentiality and Usage Restrictions

This document contains trade secrets and other information that is company sensitive, proprietary, and confidential, the disclosure of which would provide a competitive advantage to others. As a result, the reproduction, copying, or redistribution of this document or the contents contained herein,

in whole or in part, for any purpose is strictly prohibited without the prior written consent of The Hackett Group.

Copyright © 2012 The Hackett Group, Inc. All rights reserved. World-Class Defined and Enabled.

Global business services (GBS) Overview & Trends | 3© 2012 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited.

The world remains full of potential disruptions

Inflation Sovereign Debt Crises Social Unrest

Revolts and Uprisings Potential Conflicts Natural and Environmental Disasters

Global business services (GBS) Overview & Trends | 4© 2012 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited.

Focus on Bottom Line Exceeds Top Line Growth for 2013,…Agility is required to meet profit goals when revenue falls short

Achieve non-financial, social responsibility and sustainability-related objectives

Grow emerging market presence

Manage enterprise risk

Reduce total supply chain cost

Improve cash flow/working capital

Enhance employee/talent retention and development

Increase operational agility and flexibility

Reduce overhead cost

Improve customer service/satisfaction

Accelerate revenue growth

Improve operating margin

49%

68%

74%

77%

77%

82%

82%

83%

88%

88%

90%

% of respondents indicating the objective is “Extremely Important or Important” strategy for 2013What is the importance of each of the following objectives in your enterprise strategy for 2013?

New

Largest increase

+/- 3% Change from 2012

Global business services (GBS) Overview & Trends | 5© 2012 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited.

GBS is the preferred service delivery model - the GBS scope of Top Quartile companies covers more than 50% of activities

To compare, across all G&A functions (Finance, HR, IT, Procurement) ,GBS only have a third of services in scope on average for median companies

12%

56%

32%

Finance

44%

46%

10%

HR

11%

68%

20%

IT

14%

40%

46%Procure’t

Corporate

Business Units

GBS

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Relationship between strategy for service delivery globalisation and overall business strategy

Allows for the establishment of delivery centers only in low-cost geographies where the company already has sales, distribution and/or manufacturing operations

Has explicit goals to transfer work out of expensive, rigid, highly regulated labor markets

Is primarily driven by short-term cost-structure optimization objectives

Aims to establish a presence in strategic growth areas of the business

Is integral to our move toward a more global operating model of the business

11%

67%

22%

67%

78%

16%

22%

27%

27%

38%

Current In 2-3 years

11%

56%

22%

78%

89%

19%

29%

21%

38%

59%

% of Companies Indicating Agreement with Statement

Top PerformersPeer Group

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Gain access to skills and talent that is scarce domestically

Improve relationship between service provisioning organization and internal

customers

Improve agility through operations in geographies with more flexible

hiring/firing regime

Gain access to large pool of labor capacity

80%

67%

100%

100%

44%

46%

55%

81%

Peer Group Top Performers

70%

89%

90%

90%

38%

38%

55%

75%

Peer Group Top Performers

Anticipated benefits Average realised benefits 2 years after transfer of work

Percentage of companies considering “improvement “ or “drastic improvement “

Anticipated vs. actual qualitative business value driver realisation

Global business services (GBS) Overview & Trends | 8© 2012 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited.

Ireland

United Kingdom

Netherlands

Belgium

Portugal

Spain

Bulgaria

Romania

Poland

Czech Republic

Slovakia

Hungary

Estonia

Latvia

Lithuania

GBS Growth in Europe has been represented by a consistent migration Eastward

WAVE 1

British Isles 1980s

WAVE 2

Benelux Early 1990s

WAVE 3

Iberia 1995

WAVE 4

Central, Eastern Europe 2000

WAVE 5

Eastern Europe 2005

Global business services (GBS) Overview & Trends | 9© 2012 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited.

Europe Americas AsiaOceania Africa Others

Over 4.900 shared service centres operate globallySSC-BPO Distribution

in the Database

Top 5 Global Destinations with BPOs Top 5 Global Destinations with SSCs

Regional Distribution of SSCs

1381;29%

3378;71%

60; 2% 41; 1%

117; 3%

SSC BPO

1512;30%

3471;70%

India Poland Philippines United States China

274

158

106 96 90

United States United Kingdom Poland India Germany

562

401

236182 166

1815; 52%

898; 26%

540; 16%

Global business services (GBS) Overview & Trends | 10© 2012 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited.

SSC/BPO distribution in Europe

SSC BPO

United Kingdom Poland Germany

Netherlands Czech Republic Ireland

Hungary Sweden Spain France

401

77

236

158

166

85

116

16

101

26

107

14

93

24

53

22

55

18

62

10

Russia

Finland

Sweden

Norway

Iceland

United Kingdom

Ireland

Poland

Germany

Czech Republic

Slovakia

Hungary

Romania

Ukraine

Belarus

RussiaLithuania

Latvia

Estonia

Denmark

Austria

Belgium

Netherlands

France

SpainPortugal

Switzerland

Italy

Slovenia

Croatia

Bulgaria

GreeceTurkey

Bosnia and Herzegovina

Serbia

Albania

MacedoniaMontenegro

Kosovo

Global business services (GBS) Overview & Trends | 11© 2012 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited.

236

158

SSC/BPO distribution in CEE

SSC BPO

Poland Czech Republic Hungary

Slovakia Romania Lithuania

Latvia Bulgaria Estonia

93

24

101

26

7

32

14

26

19

11

49

8

2824

6

30

Global business services (GBS) Overview & Trends | 12© 2012 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited.

Offshoring is half way through – but still 1.8 million jobs to move

Global business services (GBS) Overview & Trends | 13© 2012 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited.

Contact Information

Amsterdam | Atlanta | Frankfurt | Hyderabad | London

Miami | New York | Paris | Philadelphia | San Francisco | Sydney

Tom BangemannSenior Vice President Business Transformation

+49 174 3469 974 | Telephonetbangemann@thehackettgroup.com I Email

Global business services (GBS) Overview & Trends | 14© 2012 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited.

Statement of Confidentiality and Usage Restrictions

This document contains trade secrets and other information that is company sensitive, proprietary, and confidential, the disclosure of which would provide a competitive advantage to others. As a result, the reproduction, copying, or redistribution of this document or the contents contained herein, in whole or in part, for any purpose is strictly prohibited without the prior written consent of The Hackett Group.

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