Global Services Fact Sheet

What is global services? Global services is the intersection and management of four areas 1 2

Solution model Technology model  Output required  Role of technology in delivering the  Process model (e.g., activities, solution and level of customization functional, end-to-end)  Level and type of automation to  Role of people (e.g., self-service, offset talent requirements judgment)  Type of technology (e.g., COTS,  Degree of customization proprietary, add-ons)

Global services

Talent & location model Sourcing model  Required skills  Relative roles of internal and  Supply and demand of skills external models (segmented, (volumes, languages, etc.) hybrid, etc.)  Role of geographies in delivery  Type of internal (e.g., shared (hubs, spokes, etc.) services, COEs, business)  Distribution of resources across  Type of external (e.g., outsourcing, locations MSP, contractors) 3 4 Global Services Fact Sheet

Offshore Delivery Center Global Offshore Distribution of Cloud Deals, 2013 Set-Up Locations, 2013 Services Market 138 # of deals $US billion 127 116 31 105 29 3% 94 26 52% 24 GICs 21 15% APAC Europe & UK 3rd party 98 107 105 EMEA service 81 90 North America Set-Ups providers 73 47% LATAM APAC 16% 35% 31% Latin America 2009 2010 2011 2012 2013

Outsourcing GIC Activity Trends Offshore Delivery Center Set-Ups Transactions by 1,730 1,978 1,929 1,633 1,679 Tier 1 v Tier 2/3 City, 2013 Type 3% 2% 4% 14% # of transactions Both 2% 3% 30% 31% 39% BPO 24% 27% 22% 50% 89 Tier 1 71% 70 71 Set ups & expansions Tier 86% 2/3/4 61% ITO 73% 68% 66% 71% 75% 50% Divestitures 29% 1 2 5 APAC Central Latin Middle 2009 2010 2011 2012 2013 & Eastern America East & 2011 2012 2013 Europe Africa GIC Market Activity Heatmap Indexed Annual Operating Cost Per FTE Tier-1 Cities, by Country, Indexed to India BPO=100 BPO ITO Europe 632 600 518

407 400 375 336 321 314 Rest of 257 254 243 246 LA Asia 236 186 200 143 150 India 100 MEA NOT EXHAUSTIVE No major activity (<10 centers) Recent Change in GIC Activity 0 Nascent location (10-50 centers) India China Philippines Czech Poland BrazilCosta Rica Mexico Emerging location (50-100 centers) Increase Decrease Republic Mature location (>100 centers)

GIC = Global In-house Center replaces “captive” updated August 2014 www.everestgrp.com Global Services Fact Sheet BPO Market Maturity S-curve Horizontal BPO Industry-specific BPO

 Most mature non-voice BPO segment  Beyond North America and Europe, adoption spreading into emerging geographies (APAC, LATAM) Contact center  Labor arbitrage is the traditional value lever though other levers / solutions increasingly important (automation,  The largest and most mature BPO industry-specificity, end-to-end process enablement) segment  Largely commoditized for the core services and hence greater push to F&A offer value-adds to increase client stickiness  Provider M&As primarily driven to HR enhance scale

Insurance Banking

 Most-mature industry specific BPO market  Fast growing market on the Procurement  Adoption moving beyond large global banks to back of structural changes in national and mid-tier banks the industry  Global sourcing a key value lever though domain  Adoption across payers and Healthcare expertise, technology leverage, and analytics providers though solutions differ increasingly important significantly  Service provider M&As primarily

Market value Market value creation driven by capabilities enhancements than scale

 Quickly moved beyond pioneering stage though Supply Chain market still getting defined  Both broad-based BPO players as well as Management specialists playing / entering the market  M&As likely to increase, driven primarily by expertise considerations

Pioneers Emerging rapid growth Reaching maturity

Market maturity

updated August 2014 www.everestgrp.com Global Services Fact Sheet Horizontal BPO Key Market Characteristics

$US billion 72.5 6.3 4.6 3.3 2.0 1.8 1.05

Others 11%

12% 1% APAC 8% 2%

32% 3% Europe & UK 11%

36% 10% 3% 89% 33% 5% 4% North America 45% 15% 12% 50% 34% 25% 1% 54% 33% 8% 46% 59% 59%

MPFAO MPHRO RPO CCO BAO Multi-Process PO Recruitment MSP Contact Center Benefits Administration Multi-Process Human Procurement Finance & Accounting Resources Process Managed Services Annual growth rate 7-8% 6-7% 8-9% 2-5% 9-12% 15-20% 13-16%

# Providers Tracked 23 10 23 21 20 25 13

Market Buyer maturation US healthcare reform Advances in FAO Slow growth, but Growth is the Evolution is the Elementary changes drives service spurs steady growth; solutions empower significant change as theme: deal catchphrase in RPO are altering the Characteristics evolution and doubling private health buyers to switch APAC becomes the number and as geographic mix dynamics of the MSP of deal sizes exchanges are providers in search market’s activity hub scope, geographic shifts and an RPO+ market as buyer expected to have of more value, footprint, FTE value proposition profiles and demands impact going forward improved customer count – all on the comes to the fore change, and the experiences, and rise service provider transformation landscape morphs

updated August 2014 www.everestgrp.com Global Services Fact Sheet ITO Key Market Characteristics

Global IT outsourcing market Global IT outsourcing market by geography 2013; US$ billion 2013; US$ billion 521 Rest of World 509 3%

496 APAC North America 484 28% 36% 472

33%

2013 2014 (E) 2015 (E) 2016 (E) 2017 (E) EMEA

Global IT outsourcing market by service type 2013; US$ billion

Global IT outsourcing market size by industry vertical 2013; Percentage 3-5% 3% 100% Application 4-6% outsourcing 100% = US$472 billion 5-7% 6-8% 6-8% 7-9% 28% 37% Consulting 12-14% $US472 services 20-25% billion

35% 22-27% Infrastructure

outsourcing

BFSI

Media entertainment & Media

Healthcare & life sciences life & Healthcare

Others

Electronics & hi-tech & Electronics

Telecom

Total Public and utilities, Energy, Manufacturing chemical

and CPG and Retail, distribution, distribution, Retail,

updated August 2014 www.everestgrp.com Global Services Fact Sheet ITO Key Market Characteristics

$US billion 163-167 50-55 35-40 30-35 10-15 8-13 5-8 6%

8% Others 28% 15% 3% 4% APAC 4% 35% 31% 7% 43%

Europe & UK 42%

7% 35% 42% 11% 17% 4% 49% 47% North America 82% 34% 11% 17% 49% 68%

BANKING, FINANCIAL SERVICES, & INSURANCE HEALTHCARE Infrastructure Banking Insurance Cap MarketsPayer Life Sci & Pharma Provider Annual growth rate 0% ~24%~15% ~50% ~12% ~11% ~14%

# Providers Tracked 27 28 20 20 12 18 12

Market Unprecedented A return of Insurance industry Environmental Buyers in the payer Analytics and Market challenges Characteristics disruption: providers discretionary spend challenges drive challenges – market are beginning infrastructure services drive ITO adoption and enterprises among banks drives SMAC adoption revenue, cost, to look up from the are most in demand with a focus on scramble as cloud applications regulations, customer reforms mandate to as life sciences firms analytics, EHR, and and software-defined investments and demand – are forcing find additional value seek leverage in a digitization models unsettle the intensifying provider investments in in ITO challenging market industry competition technology, making capital markets the highest growth market in BFSI

updated August 2014 www.everestgrp.com