1. Why Technology Industry
Trends are Driving
Increased Finance &
Accounting Outsourcing
A Cognizant & Hackett Group Webinar
May 17, 2011
0

2. Speakers
Paul Nowacki, CFA
Global Leader, Finance & Accounting Center of Excellence, Cognizant
In this role, Paul oversees all of our F&A service delivery for existing clients and solution design for prospective clients for Cognizant worldwide.
Paul also serves as a thought leader in F&A and helps identify market trends and shape new Cognizant offerings accordingly. He is based out
of Dallas, TX, USA.
By combining his industry experience in IT and Finance leadership roles, along with his experience as a transformation consultant, Paul is able
to look holistically at Finance & Accounting organizations including process, systems, and organizational design perspectives.
Imran Masood
Manufacturing, Logistics and Technology BPO Practice Leader, Cognizant
Imran works closely with business leaders to help create innovative solutions leveraging Cognizant core strengths of Technology, Industry best
practices and process reengineering. Imran is based out of White Plains NY.
Imran has over 12 years of professional experience in the areas of business process reengineering, Operations delivery and relationship
management. Imran has worked with many Fortune 500 companies, helping them in the areas of shared services setup, offshoring strategy and
process innovation with a special focus on multi-location technology leveraged global environments. Prior to Cognizant Imran worked with
General Electric, PepsiCo & Siemens among others. He is a management graduate and did his graduation in electrical engineering. He is also a
certified black belt and a PMP.
Honorio J. Padrón III
Principal and Global Practice Leader, IT and Global Business Services, The Hackett Group
Mr. Padrón’s career spans 35 years in business and technology management, enterprise business transformation, shared services, outsourcing,
and customer experience engineering. He is an expert in all of the facets of enterprise Service Delivery Strategy, design and implementation. He
has held senior executive positions in at a number of Fortune 500 corporations, including CEO of Exelon’s Business Services Company Inc.;
CIO and SVP Exelon Corporation; CIO and EVP of CompUSA; CIO and SVP of PepsiCo Restaurant Group; and Head of Global Reengineering
for Burger King Corporation. His government-related experience includes various program management roles at NASA Kennedy Space Center.
CIO Magazine named Mr. Padrón as one of its “Top 100 CIOs,” and RetailTech as one of its “Top 10 CIOs.” He is the recipient of a
Computerworld Smithsonian Award for CRM innovation and a Contract Design Award from the Outsourcing Institute. Mr. Padrón is a
contributing author of e-Enterprise, The Alignment Effect and Winning The 3-Legged Race: When Business & Technology Run Together.
1 | © 2011, Cognizant

3. Agenda
Welcome & Introductions
Technology Industry Trends – How is the Current Market
Affecting Technology Companies?
Implications and Analysis of Industry Trends – How are you funding
innovation and efficiency?
Finance & Accounting Outsourcing in the Technology Sector –
What are the keys to world class performance?
Q&A
2 | © 2011, Cognizant

4. Some Cognizant corporate facts
Global scale to deliver: Founded in 1994 (CTSH, Nasdaq)
Headquarters: Teaneck, NJ
 Revenues: Part of Fortune 500
» $4.59 Billion (Full 2010) Member, Nasdaq-100 Index
Member, S&P 500 Index
 Employees: App. Market Cap over $23B
104,000*
Recent Awards & Recognition
 Active Customers: 712 Part of World’s Most Admired
Companies List (March 2011)
 Over 50 global delivery
and development centers Among Top Performers in Business
Week 50 (June 2010)
 25 regional sales offices Among Forbes Fastest growing 25
Tech Companies (April 2011)
 Over 12,000 projects in
40 countries
* As of December 31, 2010
3 | © 2011, Cognizant

5. Some Hackett Group corporate facts
Our Intellectual Property Our Transformation Capabilities
BENCHMARKS
BEST PRACTICES INTELLIGENCE CENTER™
PERFORMANCE
BEST PRACTICES
METRICS
BEST PRACTICE SOFTWARE
PROCESS FLOWS CONFIGURATION
PROVEN STRATEGIES
REDUCE RISK AND ACCELERATE
BENEFIT REALIZATION
Over 80% of The Hackett Group revenue is generated from
Transformation Analysis, Design and Implementation projects
© 2011 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited.
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6. How are technology industry trends
driving innovation and efficiency?
5 | © 2011, Cognizant

7. There are a multitude of major trends shaping the Technology Industry;
in this webinar we will discuss six that are particularly impactful
Consumerism Flash Memory OS Thinking BPM
Tablets & Restoration of Apps
B2B
Smartphones Economic Growth Development
Business Fabric Based
Virtualization Web 3.0
Analytics Infrastructure
Social Networking
Enterprise 2.0 Online Privacy
& Analytics
Cloud
Green IT Video
Computing
Scope of today’s
CRM 2.0 Telepresence CIO Role
discussion
6 | © 2011, Cognizant

8. These aren’t just every day trends . . .
… these are a shift in … and the old road
the tectonic plates … will not work any more
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9. 1) Tablets & Smart phones will re-define enterprise computing
Mobility key for productivity: In 2011, over 12.5mn (25%) tablets will be bought by enterprises
PC and Non –PC Sales Forecast 2011
Tablets –  Over 50% of computing
Desktops –
50mn, 6% devices sold globally will not
150mn, 18%
be PCs
 Over 1.2 billion people carry
Smartphone - Laptops –
375 mn, 46% 200mn, handsets capable of mobile
52% 48%
25%
commerce providing an ideal
environment for convergence
of mobility and the Web
Net books –
40mn, 5%
…2009 2010 2011 2012 2013 2014 2015…
Tablets & Blue ocean Sweet Red Overtake PC Augmented ~70% Enterprise Mobile cloud
Smart phones spot ocean & laptop sales reality adoption
8 | © 2011, Cognizant

10. 2) Cloud is a game changer, it will change the way IT is done
Enterprises will spend 60-70% on SaaS, PaaS and IaaS of the total cloud spending
By 2014, cloud computing would be the norm. Over 70% of the enterprises would have adopted cloud services
Cloud Services Revenue Forecast
 Financial services
companies are the early
movers with over 50%
adoption already
 In 3 years, cloud adoptions
will spread across
$126bn
geographies. Western
$78bn Europe with 1/3rd of
adoptions will be second
biggest market after the
2010 2014
US
…2009 2010 2011 2012 2013 2014 2015…
Early Across
Cloud SaaS, PaaS, Public/Private/ industries Utility solutions Industry norm
adopters IaaS Hybrid >50% adoption
Computing ~15-20%... Across
geographies
9 | © 2011, Cognizant

11. 3) Quick answers, collaborative designs and open innovation
Social networking analytics will help businesses better understand consumer trends & employee behavior
Enterprises will start integrating social networking with business application to develop coordinated strategies
Enterprise Social Platforms Market
 Social platforms will see
33% growth in 2011
 In the next 2 years, series
of software and services
$1860mn will be launched for
$630mn
businesses to collaborate
social business models
through cloud
2011 2014
…2009 2010 2011 2012 2013 2014 2015…
Social Networking Web 2.0 Mobility Enterprise Adoption by Dominant Key tool to gauge
& Analytics blogs enterprises medium of performance
For B2B
communication
10 | © 2011, Cognizant

12. 4) Real time predictive analysis will drive business results
Mobile computing will force enterprises to change their BI infrastructure to consume BA on the go
The future of business analytics will be the ability to simulate scenarios and forecast results using live data
Business Analytics & Optimization Market
 Businesses will increasingly
combine business analytics
and social networking to
make fail-proof decisions
$205bn  Technology companies in a
$140bn unique position with real-
real time data availability
2009 2015
…2009 2010 2011 2012 2013 2014 2015…
Business Scoreboards BA SaaS Real time Predictive Mobile Collaborating Forecasting
Analytics & dashboards BA analysis BA social networks results
11 | © 2011, Cognizant

13. 5) Video will substitute travel
Through conferencing or as a communication asset, video will be a dominant content form in the years to come
Video will become a key component of corporate communication – internal & external
Enterprise Video Asset Management Market
 The biggest chunk of
spending will be on on-
premise solutions
$325mn  Hosted solutions will grow
$260mn fastest within the business
$200mn
$160mn
video industry and in the
$120mn
$90mn next 3 years will reach
$500mn
2010 2011 2012 2013 2014 2015
…2009 2010 2011 2012 2013 2014 2015…
Key player in
Video Voice to video Day-to-day Increasingly Dominant enterprise
conference interactions replace travel content form communication
strategy
12 | © 2011, Cognizant

14. 6) Restoration of economic growth
Global technology spend growth has already reached pre-recession levels of 5%. The Q1 2011 results of tech companies
have surpassed market expectations comfortably.
The combined revenues of the top tech companies show 11% growth in 2010 compared to -0.4% in 2009. In 2011, these
companies are expected to grow at 13%
Industry Revenue ($bn) Revenue growth
2011E
800
Hardware Ind. 16%
Overall Technology Industry
700 Software Ind. 8%
600 Internet Ind. 13%
Hardware Industry
500
2010
400
Software Industry Hardware Ind. 12%
300 Software Ind. 6%
200
Internet Ind. 17%
Internet Services Industry
100
2009
0 Hardware Ind. 0.3%
Software Ind. -5%
Internet Ind. 11%
…2008 2009 2010 2011 2013 2014 2015…
Restoration of
Economic Growth $618bn $711bn
$554bn $552bn
Combined revenues of top companies from each sub industry. Hardware – HP, Dell, Apple, Cisco & Intel. Software – Microsoft, IBM, SAP,
Oracle & Symantec. Internet Services – Amazon, Google, eBay & Yahoo. Source for 2011E – UBS Analyst reports.
13 | © 2011, Cognizant

15. Although the tech industry is growing, not everyone is prospering equally
Early adopters with clear business strategy are the ones driving growth and not the industry heavyweights
35%
Contenders Leaders/
Innovators
30% Microsoft Google
$62bn $29bn
25% Intel
Oracle $44bn
Net Profit Margin 2010
Apple
Net Profit Margin 2010
Yahoo $6bn eBay $9bn $27bn
Cisco $65bn
20%
$40bn
Laggards
15% IBM SAP
Symantec $6bn
$17bn
$100bn
10%
HP
$126bn Amazon
Dell $34bn
5% $53bn
Slow movers Spoilers
0%
-20% 0% 10% 20% 30% 40%
-10%
Revenue Growth 2010
14 | © 2011, Cognizant

16. Coming out of the recession, we are seeing a return of growth
and profits, while SG&A remains lean
Apple, Google and Intel have performed exceedingly well on net profit margins; due in part by managing SG&A expense
Net profit Margin SG&A as % of Revenue
40% 50%
30% 40%
2010 30% 2010
20%
2009 20% 2009
10% 10%
0% 0
eBay
Amazon
Cisco
SAP
IBM
Symantec
Dell
SAP
HP
Amazon
Apple
Cisco
yahoo
Intel
Apple
eBay
Symantec
Yahoo
Google
IBM
oracle
Oracle
Google
Dell
Microsoft
Intel
Microsoft
HP
Peer group average (2010)
Symantec – Goodwill impairment charges have been discounted from 2009 profit
15 | © 2011, Cognizant

17. The implications are obvious, tech firms need to find ways to continue to
manage costs and fund the required acceleration of innovation
Imperatives Implications
 Generate Cash to fund R&D, Universal Pressure
» Reduce Cost
to …
Innovation
» Create Flexible Business Model
 Maximize Value extraction from » Get access to high quality talent and
Strategic
capabilities
new product development, Imperative to…
» Cut time to market
before competition catches up
» Increase Productivity
 Ensure Product Development » Get access to new markets
Speed & Efficiency Tactical » Provide direct support to customers and
Opportunity to… end-users
» Exploit government incentives
16 | © 2011, Cognizant

18. The tech industry is leveraging Outsourcing at an accelerating rate
to respond to these Imperatives
The technology industry contributes to 4% of the total outsourcing deals
10 years ago the tech industry entered into
2011E – 59 Deals
twenty-some new outsourcing deals per year
5 years ago the tech industry entered into 2010 – 47 Deals
Citrix, EMC, Google,
thirty-some new outsourcing deals per year Intel, Lenovo, Microsoft
2009 – 57 Deals
Today the tech industry enters into fifty-some Dell, HP, Intel, Microsoft,
Novell, SAP, Symantec
new outsourcing deals per year 2008 – 50 Deals
Cisco, Dell, Google, HP, Microsoft,
Novell, Symantec, Yahoo
2007 – 42 Deals
Dell, EMC, HP, Microsoft,
Sun Microsystems, Yahoo
2006 – 44 Deals
Apple, HP, Microsoft, NEC,
Unisys Corp, IBM, Dell, Novell
2005 – 37 Deals
AOL, Apple, EDS, HP, Microsoft,
SAP America Inc, Sun Microsystems
2004 – 34 Deals
Avaya, EDS, Fujitsu, HP, Microsoft,
Sun Microsystems, IBM
2003 – 30 Deals
Avaya, EMC, Gateway, HP, Microsoft,
Novell, Unisys Corp, Yahoo, IBM
2002 – 28 Deals
Apple , Borland, EMC, HP,
i2, IBM, Microsoft, Oracle
2001 – 21 Deals
AOL, CSC, EDS, Getronics, Apple,
HP, Intel, Logitech, Microsoft
The list is not intended to be exhaustive but illustrative to show trends
17 | © 2011, Cognizant

19. Increasingly the tech industry is adopting business process outsourcing for
processes such as Finance & Accounting, HR, and Customer Support
Apart from having built offshore software development capabilities, and outsourcing IT, Tech companies are buying
specialized capabilities such as F&A and HR from third parties
Microsoft Cisco Intel AOL
Finance & Accounting Finance & Accounting Business Finance & Accounting Human Finance & Accounting Human
Legal Process Contract Resources Process Customer Support Resources Desktop Management Resources Content Development
Business Process Procurement Market Research Market Research
United Technologies Symantec Lam Research IBM
Finance & Accounting Human Resources Voice Finance & Accounting Human Resources Contract
Procurement Market Research Resources Market Research
Citrix Sun Microsystems SAP HP
Business Process Human Resources Human Resources Payroll Processing
Market Research Business Services
Avnet eBay Amazon Texas Instruments
Finance & Accounting Customer Support Customer Support Voice Human Resources R&D
Human Resources Business Processes
While accounts payable, receivable and general ledger constitute majority of FAO services, companies have started
outsourcing tax, regulatory reporting, internal audit in the recent years
The list is not intended to be exhaustive but illustrative to show trends
18 | © 2011, Cognizant

20. Business Process Outsourcing (BPO) and Finance & Accounting
Outsourcing(FAO) are growing rapidly across all industries
In 2011, cross-industry BPO is expected to grow at over 30% and FAO at over 20%
No. of Outsourcing Deals Across Industries Total Contract Value- New FAO Deals $Bn
500 5
400 4
300 3
200 2
100 1
0 0
2007 2008 2009 2010 2011E 2006 2007 2008 2009 2010 2011E
BPO Deals FAO Deals FAO Deals
Total contract value of FAO deals in 2011 is set to reach $4.4Bn
19 | © 2011, Cognizant

21. What are the keys to world
class performance?
20 | © 2011, Cognizant

22. World-Class companies common behaviors
Value Contribution Value Generators
How Well Designed are Your Services
1. Degree of Services Agility
2. Performance Management Maturity
Desired
3. Service Delivery Model Maturity
VALUE
STRATEGIC ENABLEMENT 4. Service Management Maturity
Effectiveness
5. Degree of Process Automation
6. Degree of Sourcing Agility
7. Portfolio Management Maturity
How Well Do You Build Services?
SERVICE
1. Global Sourcing Capability
2. Project Management Practices
OPERATIONAL EXCELLENCE 3. Degree of Resources Agility
Expected
How Well Do You Operate Services?
1. Services Agility
2. Performance Effectiveness
Efficiency
3. Cost Per Equivalent End User
Efficiency
COST
COMPLEXITY REDUCTION
How Effective are Your Services?
1. Consumer Experience
2. Business Value Performance
3. Relationship Management
© 2011 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited. | 21

23. Designing and executing an optimized Service Delivery Model
-The key to World-Class performance
Enterprise Service Delivery Strategy
A strategy for what work is executed where, by whom, and its business benefit
Strategic Alignment Service Delivery Model Service Delivery
Transformation
Environmental Drivers
Enterprise Strategy
Information
Organizational Organizational
Governance
Capabilities &
Service Acceptance
Placement
Organization
Performance Service Execution
Delivery
Goals Skills & Process Capabilities
Talent Sourcing
Design &
Enabling Process Implementation
Operating Technology Design
Roadmap
Principles
Performance Outcomes
Risk Growth Agility Cost
© 2011 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited. | 22

24. Finance outsourcing opportunities continue to expand
Function level Process level
Accounts Payable
Travel and Expense
Fixed Assets
Cash Application
Payroll
Inter-company
Collections
Time and Attendance
Cash Accounting
General Accounting
Dispute Management
Credit
30%
37% Customer Billing
Tax Filing and Reporting
Cash Management
Treasury
Order Entry
External Reporting
Inventory Accounting
9% 24% Business Performance Reporting
Cost Analysis
Business Performance Analysis
Budgeting
Outlook Interim Reporting
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
GBS - Transactional GBS - Knowledge-centric
GBS - Outsourced Outside the GBS organization
Source: Global Business Services performance study, 2011
© 2011 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited. | 23

25. Comparing performance of BPOs and captives in terms of satisfaction
with quality of service delivery shows that both models work
On-time Delivery Service Level Accuracy Service Level Satisfaction Level - Change
Satisfaction Satisfaction Management
Exceeds 23% Exceeds 31% 69%
Positive
expectations 48% expectations 43% 65%
69% 69% 8%
Meets expectations Meets expectations Neutral
38% 29% 17%
8% 0% 23%
Below expectations Below expectations Negative
14% 29% 17%
Captive BPO Captive BPO Captive BPO
Source: Hackett Enterprise Strategy Series – Understanding the trade-offs between captives and BPOs in G&A Business Process Globalization, 2008
© 2011 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited. | 24

26. BPOs deliver benefits faster
Most BPOs and captives deliver savings …the most crucial difference between BPOs
relative to baseline operating cost within the and captives with immediate ramifications for
same range of 11% to 50%... the business case is ramp-up time
Actual Process Operating Cost Savings Average Months Operations at Full
Relative to Baseline Cost Volume
Over 51% savings 14%
5%
26-50% savings 36%
63%
11-25% savings 36% 27
11% 22
14% 11 13
1-10% savings
5%
Spending 0-10% more 0%
16% Captive BPO
Captive BPO Planned Actual
Ability to leverage the BPO’s existing infrastructure is the crucial differentiator
allowing a far more rapid transition of the work. Although realized savings are closely within the same
range as a result of accelerated benefits realization, BPOs will have better NPV performance than
captives.
© 2011 The Hackett Group, Inc. All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited. | 25

27. In conclusion
Situation
 The technology industry is at an inflection point, with a multitude of major trends shaping the
industry
 The data shows that the trends are measurable, real, and material
 Analysis of industry financial performance shows recovery from the great recession . . .
 . . . yet clearly some industry players are benefiting form the seismic shifts, while others are
lagging
 Globalization of the operating model through outsourcing, is an accelerating and measurable
response
What you need to do now
 Recognize that globalizing your business process operating model is no longer an option, failure
to do so is increasingly leaving you behind your competition
 Assess your business process operating model with respect to cost, performance, and location
 Identify your improvement objectives, prioritize and globalize the business processes
26 | © 2011, Cognizant

28. Q&A
27 | © 2011, Cognizant

29. Why Technology Industry
Trends are Driving
Increased Finance &
Accounting Outsourcing
A Cognizant & Hackett Group Webinar
May 17, 2011
28