Everest Group experts, Michael Fraley and Holly Bush, will discuss how the world’s best performing companies are optimizing their service delivery models by leveraging a mix of shared services, offshoring, and outsourcing approaches.

1. Today’s Webinar is brought to you by Everest Group
Today’s Webinar Upcoming Webinar
Cut Your SG&A costs by 30% of more by ADM Price Benchmarking: Making It Work
Building the Right Service Delivery Model in Your Complex Environment
Synopsis: Thursday, July 15, 2010
Everest experts, Michael Fraley and Holly 10:00 AM CDT/11:00 AM EDT
Bush, will discuss how the world’s best Speakers:
performing companies are optimizing their Ross Tisnovsky, Vice President –
service delivery models by leveraging a mix Research, Everest Group
of shared services, offshoring, and Sarthak Brahma, Practice Director, Pricing
outsourcing approaches. Assurance, Everest Group
Rahul Gehani, Senior Analyst, Price
Assurance, Everest Group
About Everest Group
Everest Group is a leading consulting and research firm that comprehensively serves
the Global Services landscape encompassing shared services, offshoring,
outsourcing. An industry leader since creating the sourcing consultancy practice in
1991, Everest has earned a worldwide reputation for on-going innovation by helping
clients capture optimum value through sourcing strategies and implementation.
Committed to thought leadership, Everest is noted for its fact-based analyses and
insights that are crucial to making the right decisions in today’s environment.
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For more information, contact Mark Williamson2010,mark.williamson@everestgrp.com.
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at Everest Global, Inc.

2. Q&A
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3. Introductions
Michael Fraley Holly Bush
Partner Associate Partner
Everest Group Everest Group
michael.fraley@everestgrp.com holly.bush@everestgrp.com
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4. Cut Your SG&A Costs by 30% or
more by Building the Right Service
Delivery Model
Webinar: July 8, 2010

5. Four Discussion Topics
1. Understanding
Sourcing in Today’s
Environment
2. What is a Hybrid
Sourcing Model?
3. Determining the
Optimal Delivery
Solution
4. Building the Business
Case for Change
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6. The scope of shared services is becoming broader,
deeper and more sophisticated – leading to the
rethinking of service delivery models required
Historical context Current State
Transactional services were primary Operations are broadening to cover
candidates for sourcing of services more than just the transactional
Customer facing and expertise services functions (e.g., R&D in
typically stayed within the functions Pharmaceuticals)
Shared services and outsourcing were More complex, expertise services are
either/or decisions being added (e.g., Treasury, Analytics,
External providers were left on their Exception Handling)
own to deliver services, and were not Shared services and outsourcing are
proactively managed converging into an “AND” proposition
As outsourcing becomes an integral
part of the Shared Services solution,
providers are becoming an integral part
of the Shared Services organization
Best performing shared services organizations are re-evaluating their portfolio of
services to determine the optimal service delivery model and how to balance
sourcing models to ensure effectiveness and efficiencies.
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7. “Best Practice” characteristics are prevalent in
successful shared services implementations
Best Practice characteristics
Service Delivery Model Development – Moving from standalone local or regional
operations to a “hybrid’ mix of organizations to best support the customer
Sourcing Strategy – Use of the best solutions for the company whether it is
outsourced or in-sourced
Globalization – Use of global footprint to improve and expand support, including
implementation of the COE strategy
Entrepreneurship & Organization Development – Well-defined organization and
governance structure operating as an independent entity
Extension of Portfolio – Moving up the “value-chain” by supporting company specific
and non-transactional processes
Skills & Talent – HR policies / processes positively impact staffing, development and
retention focusing on the development of a customer service mindset
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8. Across all SG&A functions, HR, Finance, Supply Chain
& Procurement, and IT continue to be the leading
candidates for shared services/sourcing
Human Finance & Supply Chain &
Resources Accounting Procurement
Full Service HR F&A SCM
BPO Strategy Strategy Strategy
Information Mgmt Budget/Forecast Plan – Forecast
General Accounting Buy – Source
Performance Mgmt Treasury & Risk Mgmt Make – MRP
Regulatory & Compliance Mgmt Reporting & Analysis
Transactional
Move – Fulfillment
Recruitment & Selection Fixed Asset/Cap Budget Trans & Logistics Admin
BPO
Training & Development Accounts Receivable Storeroom Administration
Compensation Internal Audit Acnts Warehouse Administration
Payroll Payable Proc Admin & Rec to Pay
Benefits Tax
Call Centers
Applications Maintenance Voice & Data Networks Help Desk Desktop
ITO
Data Centers ERP Applications Development
IT Strategy
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9. Leading companies are continually moving their
Shared Service offerings up the value-chain
Strategy
Profitability Analysis Key processes
Mergers & Acquisition Transactional processes The New Finance
Budgeting Creation Professional
Strategic Planning F&A
Treasury strategy
Internal Financial Reporting
External Financial Reporting
Forecasting Capital budgeting
Tax Planning Internal audit
Financial Analysis Growing
Treasury & risk management Offshorability
Risk Management
Budget Management Budgeting/forecasting
Regulatory reporting & compliance
Tax Compliance – Payroll, Management reporting & analysis
VAT
Tax Current
Accounts Receivables Offshorability
Tax
General Accounting
Credit & Collections Fixed assets
Accounts Payable General accounting
Travel & Expense Payroll Accounts receivable
Accounts payable
Billing & Invoicing Payroll Accounts payable & T&E
Payroll
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10. When considering globalization, it is important to note
that various regions are in different states of readiness
North America Europe
Historical start for shared services Shared services started in Europe after the
Cross border center processing and captives U.S.
Shared services moving to hybrid models Pan-European models currently the trend
Eastern Europe for delivery is frequently used
Shared services moving to hybrid models
South America Asia-Pacific
Slower adoption of shared services with a Country specific shared services more common
recent increase Supports long term growth and cost needs
Supports multiple objectives – growth, cost, Language is still a barrier
time zone, and language Culture, distance, legal, infrastructure
Infrastructure limitations still exist constraints still present challenges
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11. Four Discussion Topics
1. Understanding
Sourcing in Today’s
Environment
2. What is a Hybrid
Sourcing Model?
3. Determining the
Optimal Delivery
Solution
4. Building the Business
Case for Change
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Proprietary & Confidential. © 2010, Everest Global, Inc.

12. A strong service delivery model should look at all
delivery options
The delivery solution should focus on cost, capacity and capability
Strategic drivers Internal Staff Managed
Delivery Augmentation Services
Onshore /
Onsite
Shared
Cost
Services /
Nearshore Local
Effort-based
Capacity Captive Center Outsourcing
Contracting
Offshore
Capability Captive Center
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13. Various delivery models have strengths and
weaknesses – this has led to the use of hybrid delivery
structures
Shared Hybrid – Shared
Services / Services & Build, Operate
Captive Outsourced Joint Venture Transfer Outsourced
Perceived Combines Shared Rapid Speed to value
lowest cost strategies for investment and expansion Transfer of
Most control best of both reward capabilities operating and
Pros
IP Protection worlds More control Option to financial risk
Portfolio risk Leverage transition in- Maximum
management providers skills house variable cost
Management Management Potentially BOT Price New
focus required complexities lower savings Premium management
Capital Additional through labor Transition Risk model
investment governance arbitrage Perceived loss
Cons
Time to market overhead Potential for of control
longer conflicting Requires
goals management
Not all retain
providers will accountability
agree to JVs
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Proprietary & Confidential. © 2010, Everest Global, Inc.

14. Four Discussion Topics
1. Understanding
Sourcing in Today’s
Environment
2. What is a Hybrid
Sourcing Model?
3. Determining the
Optimal Delivery
Solution
4. Building the Business
Case for Change
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Proprietary & Confidential. © 2010, Everest Global, Inc.

15. Best performing organizations are moving towards
hybrid service delivery models
Rationale
Provides a model that can be proactively managed as a portfolio and that
supports the flexibility and adaptability required by unstable economic
conditions
Enables SSOs to seek out best fit solutions based on the nature of services
delivered
Outsourcing versus insourcing
Offshoring versus onshoring captive versus on-site
Regional centers versus functional centers versus centers of expertise
Presents SSOs with vehicles to leverage to improve efficiencies, increase
effectiveness and value delivered, become more strategic and positively impact
the corporate bottom-line
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16. When determining the desired model, organizations
invariably wrestle with four design dimensions – and
the dimensions are interdependent
Aggregate scale and scale for individual functions/skills are
Scale both important
The greater the scale, the more options available to a company
In an effort to attain greater scale (and more options), the
degree of centralized decision-making and management must
be considered
Centralization
Most companies aspire to greater centralization for global
sourcing efforts, but tend to only achieve for captives and to a
lesser extent for third-parties
Whether or not a company perceives itself as “global”
(customer base, operations, etc.) can have a significant impact
on both its aspirations (scope, complexity) and sourcing models
Globalization
Companies whom have customer-facing operations in
offshoring geographies tend to approach global sourcing in
those geographies with more confidence (perceptions of risk
lessened, more likely to consider a captive, etc.)
The choice of sourcing model is both practical (what is
easiest/cheapest) and philosophical (what is preferred)
Outsource/captive
Captives are a more complex strategy because they tend to
have less variable cost and risk profiles
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17. In addition, the organization must evaluate the impact
of the service delivery model based on several criteria
• Does the service delivery model provide clarity of services
provided (what services, by whom, how delivered, and
Service Effectiveness,
from where)
Quality & Value
• Will service delivered meet customer requirements and
expectations?
• Does the model drive productivity and cost management?
• Does the model enable leverage of skillsets, technology,
Cost Efficiency and/or scale?
• Does the model support on-going continuous
improvements?
• How complex are the technology integration
requirements?
Technology • Are technological requirements for the model cost-
prohibitive?
• Can infrastructure be optimized?
• Is the model flexible and adaptable to changes in
customer requirements, demand, and Corporate
Flexibility strategies?
• Does the model allow for mergers, acquisitions and/or
divestitures?
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18. Four Discussion Topics
1. Understanding
Sourcing in Today’s
Environment
2. What is a Hybrid
Sourcing Model?
3. Determining the
Optimal Delivery
Solution
4. Building the Business
Case for Change
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Proprietary & Confidential. © 2010, Everest Global, Inc.

19. The business case for moving to a new service
delivery model should assess a range of inputs
• Future state design tenets should be clearly defined and used for model
evaluation
• A current state understanding should be developed so that expected benefits,
costs, and risks of future models can be evaluated
• Multiple design “blueprints” of the model should be compared/contrasted to
determine optimal fit and cost / savings scenarios
• Trade-offs between in-sourcing (on-site, nearshore captive, offshore captive)
and outsourcing must be carefully evaluated and approaches to address
defined
• Technology requirements must be taken into consideration from a cost
perspective
• The models should be viewed from a corporate strategy and customer
perspective, as well as an effectiveness and efficiency perspective
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20. Shared services organizations typically see a 30% to
40% reduction in costs when they use a deliberate and
managed approach for implementing a hybrid model
Benefits from hybrid model
Percentage of cost
5
5
15 5
5
100 95
70
60
Before SSO/ Business Shadow Fragment- Systems Cost Process SDM Cost with
Outsourcing case organi-- ed work and tools without improve- improve- managed
zations environ- managed ments ments Hybrid
ment Hybrid implemen-
implemen- tation
tation
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21. The business case should not be built on cost
reduction alone, but also on additional value and
bottom-line (revenue generating) benefits
• Effective leveraging of insourcing versus outsourcing
models where most beneficial in terms of
effectiveness and efficiency while meeting global,
regional and local needs
Value • Ability to move up the value chain and provide
problem-solving capabilities, specialized knowledge,
and consulting-related service offerings
• Better leveraging of resources
• Heightened service quality
• Proactive analysis and insights
• Increased sales (e.g., through balanced management
of internal sourcing, agencies, and technology to turn
Bottom-Line Benefits
around quality new hires faster)
• Avoidance of building duplicate infrastructures for
expertise services by establishing COEs
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22. Ongoing collaboration with stakeholders will build the
consensus/advocacy required to successfully
implement a new operating model
Leverage stakeholders to understand customer requirements
Include stakeholders in model evaluation, especially when you are working the
pros, cons and trade-offs
Set expectations early on and be very clear as to what the model is and is not
(what work will be delivered, how, and from where), and what levels of
performance can be expected (e.g., leverage SLAs)
Clearly align the SSO model to corporate goals and strategy so as to present
the “AND” side of the equation
Establish a clear, understandable and executable governance structure
Communicate with stakeholders OFTEN – both during and post-
implementation
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23. Summary of key messages
A hybrid service delivery model can improve SG&A costs by more than 30%
while enabling back-office processes and strengthening their ability to provide
better management reporting
Most Multinationals have already moved to hybrid and regional centers
(Americas, EMEA, AsiaPac)
Outsourcing has become an integral part of the shared service solution, with
the providers being an integral part of the shared service organization
Organizations that do not use the optimal service delivery model likely will
continue to experience rising costs and sub-optimal processes
Gaining consensus with key stakeholders is critical to the success of
implementing and managing a successful service delivery model
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Proprietary & Confidential. © 2010, Everest Global, Inc.

24. Q&A
Attendees will receive an email with a link to download today’s webinar presentation. To access a
recorded audio version of this webinar, please contact Mark Williamson,
mark.williamson@everestgrp.com
For advice or research on shared services delivery models and/or outsourcing, please contact :
Michael Fraley, michael.fraley@everestgrp.com
Holly Bush, holly.bush@everestgrp.com
For background information on Everest, please visit:
www.everestgrp.com
www.everstresearchinstitute.com
Thank you for attending today
To ask a question during the Q&A session
Click the question mark (Q&A) button located on the floating tool bar in the bottom right
of your screen. This will open the Q&A Panel
Be sure to keep the default set to “send to a Panelist”
Then, type your question in the rectangular field at the bottom of the Q&A box and click
the send button to submit
24
Proprietary & Confidential. © 2010, Everest Global, Inc.