Maneuvering through M&A : From Disparate to

Dominate Synergies

Global Trends And its impact on the Sourcing Strategies

The views expressed in this presentation are in my individual capacity and do not reflect the views or official policy / position of my employer

Anil BhavnaniDirector – BPO OperationsPfizer Inc.

Why M & A? The need for faster growth and increasing competition

Access to large capital funds and brand equity

Gaining complementary strengths

Expanding Customer Base

The need to enhance technological skill sets

Expand into new areas to foster growth

Widen the portfolio of addressable markets

Meet end to end solution needs

Opportunity for Growth and facilitate overall expansion

M & A – Global Trends

There’s been a wave of M&A deals lately in the outsourcing industry

Business continues to grow annually at double digits to over $ 20 BN by 2013

Building of Near Shore Capabilities in Emerging Markets countries like Columbia, Argentina , Costa Rica , Mexico , Honduras in Latin America South Africa and Egypt in Middle East and India , Malaysia, Philippines Singapore & China in Asia

Consolidation of BPO work post M&A with single service providers to get synergies of scale

Investment Banking & Finance companies having significant government stake thereby leading to consolidation of services across providers

Reasons for failure of M & A -Integration

Corporate Culture Clash

Lack of Communication

Loss of Key people and talent

HR issues

Lack of proper training

Clashes between management

Loss of customers due to apprehensions

Failure to adhere to plans

Highly EffectiveTeams

High TrustEnvironments

HighlyEffective

Communication

Strategically ManagedChange

Synergy

Focus on Synergies & it’s Metrics

When applied to M&A “synergy” means both companies win

Modeling synergies: Conduct synergy and value driver analyses, including probability weighting of financial impact and success

Executing synergies: Create a detailed work plan that identifies dedicated and accountable resources

Tracking synergies: Implement robust approaches to synergy tracking and reporting

Measurement of Synergies : Hard $avings and Optimization of workforce and processes

Strong Governance practices: Ensure strong project management and reporting of synergy realization through Integration Forum

Best of Both Approach

De-Duplication of processes leading to enhanced productivity

Rationalization of ERP’s across the merging companies

Consolidation of IT & BPO Services Providers based on Competency

Rationalization of Resources across merging companies

Plant Rationalization for manufacturing activities with increased emphasis on emerging markets

Blended approach to Outsourcing with equal emphasis on creating captive shared services and growth of BPO Services

Global footprint of processes across Shared Services and BPO Providers based on skill & competency

How is M&A impacting Sourcing Strategies?

Companies are getting smarter at the act of managing change through organizational integration and rationalization of resources

Clear IT Strategy is the building block for laying the foundation of the long term BPO Strategy

Consolidation of Vendors leading to Optimization of sourcing and achieving economies of scale

Competency and Skill based approach driving rationalization of services across various IT and BPO Service providers

Global alignment helps drive and prioritize change management

Good Project Management and Governance are the key factors to a successful integration and early realization of synergy benefits

Summary

As Global companies work through M&A

there continues to be an increased focus on driving

synergies throughrationalization of IT and BPO

Services providers