1 Copyright © 2011 Tata Consultancy Services Limited

Global Software Development – Industry Perspectives Kathiravan Palaniappan Country Manager - Denmark 10 Sep 2012

2

Market Trends - IT Services Outsourcing

§  The worldwide market for IT Services is growing – Technology intensity is going up

across verticals – Emergence of new technologies

§  The proportion of outsourced IT Services is growing – Shorter shelf-life of technology – Greater need for variablizing costs

§  Global sourcing has become a mainstream option

0  100  200  300  400  500  600  700  800  900  1000  

2007   2011   2015  

IT  Spend  in  USD  Bln  

58

60

62

64

66

68

70

72

1 2

Global sourcing IT Spend in USD Bln

2011 2012

5 yr CAGR 4.7%

5 yr CAGR 2.8%

Source: Gartner, Nasscom

3

Evolution of Global Software Development (GSD)

Strategic Inputs

Solution Design

Solution Delivery

Increasing requirement and impact of industry domain knowledge

Scal

ing

of V

endo

r Cap

abili

ties

Scaling of Customer Demands

Application maintenance Facilities management Contact centers Help desks Skills

Application development Product customization Infrastructure deployment Integration and testing

Tools

Functional speci!cations Software speci!cations IS architecture Component design

Process

Programs Projects Modules Skills

Support

Process reengineering Product assessment Business case de!nition Change management

Knowledge

Relationship Maturity

4

Global Software Development Sourcing

Single Country

In sourcing Selective sourcing

Strategic sourcing Value Based

Multi-Country

In-house/ Captive

Single Function

Broad Scope

Value Sharing

Offshore Near Shore Vendor Location

Vendors

Client Geography

Sourcing Spectrum

Single Supplier

On Shore

Multiple Suppliers

Strategic Partners Prime Sub

Multi-site

5

The global software development full of uncertainties…

Selecting the right model is the key to success

6

Global Software Development (GSD) Considerations

§  Outsourcing Model §  Delivery location & Setup §  Team Experience §  Commercial Models §  Culture/Language considerations §  Technology considerations §  Collaboration tools §  Governance & Project Management procedures §  Risk and Security

7

Outsourcing Operating Models

Staff Augmentation

Managed Outsourcing

Out Tasking

Full Outsourcing

Outsourcing Maturity

Cust

omer

In

volv

emen

t High

Low

High Low

8

Delivery Organization Setup

LOCATION OF CENTERS

GOVERNANCE MODEL

TRANSITION MODEL

STAFFING MODEL

PRICING MODEL

SOURCING MODEL

IN-FLIGHT PROJECTS

Continue to Logical

Completion

Transfer Project/Contract

LOCAL SUPPORT

Local Country Support

Consolidate by Language/Region

Staff Augmentation

TCS facilities

Cust. facilities

New Locations

Shared Services

Geo Aligned

Big Bang

Phased by Geo

Phased by Function / Tech

T & M

Fixed Capacity

Fixed Price

Single Vendor

In-house

Prime - Sub

TCS

Lateral Hiring

Rehire Staff

Rehire Contractors

Global Delivery

Organization

OFFSHORE LEVERAGE

60:40 80:20 90:10

9

Evolving Commercial Models

T&M

Fixed Price

IT Outcome

Based

Business Outcome

Based

Gen 1

Gen 3

Next Gen

Gen 2

Typical Current

State

Typical Proposed Model

- 9 -

10

Multi-sourcing and co-sourcing Setup – challenge or Advantage?

Global Program Delivery

Vendor B Vendor A

Captive Centers In-House IT

TCS experience

12

Tata Consultancy Services (TCS) Pioneer and Leader in IT Services and Offshoring services

§ 22+ years Operations in all Nordic countries, represented through 5 offices, Partner to over 75 Nordic clients with 4.500 consultants

§ Ranked #1 in Customer Satisfaction for the Nordic Region in 2010, 2011 & 2012

Global TCS Presence TCS in Nordic Region

§ FY 2012 (March) revenue US$ 10,17 billion

§ 97% of annual revenues from repeated customer business

§ Global Presence with 183 offices in 43 countries and 242.000 employees

§ Largest - Software R&D center in India

§ Ranked as a leader in Application Outsourcing by leading Analysts

13

Cultural Sensitization Development A Cultural Diversity Sensitization Program will go a Long Way to help Bridge the Cultural Divide

American

Sensitization Requires Developing an Understanding of Each Cultures…

Indian(1)

… Which Will help to shift Perceptions, Communication, Work Styles

• Context, e.g., Environment • Behavior/Attitudes • Communication Style • Work Orientation

Developing an appreciation for the “differences” and de"ning work style guidelines improves the effectiveness of personal communication and work#ow efficiency.

14

Global Software Development – Multi-site Delivery

Change Request

High-level

Specs

Impact Analysis Test Plan

Design, Develop, Bug Fix

Unit & System

Test UAT Roll-out

Customer Onsite China India

Customer Onsite Team

Lead @China

China

Team

India Team

Lead @India

Lead @Mexico

Mexico Team

Mexico

15

Service  Delivery  Trends  –  Our  take  on  the  Future

Service Orientation Service Consolidation

Service Evolution Departure State

•  Platform based solutions •  Includes BPO / IT / IS •  Technology becomes irrelevant

•  SaaS based solutions •  Includes IT / iS

Vertical Evolution (E2E Solutions)

Horizontal Evolution (Commoditized Utility Services)

•  Application Support as-a-Service •  App Development as-a-Service

•  Assurance as-a-Service

•  Analytics as-a-Service

•  PMO as-a-Service

Siloed Specialization (Niche Services)

•  BPR/BPI Services •  Predictive Analysis

•  EA Services

•  Performance Tuning

•  R&D Services

Additional Slides