The Services Research Company

Finance in The Digital AgeWebcast Production, April 21st 2016

Mohit Bhatia VicePresidentMondelēz Internationalmohit.bhatia@mdlz.com

Phil FershtCEO&AnalystHfSResearchphil.fersht@hfsresearch.com

Reetika JoshiResearchDirectorHfSResearchreetika.joshi@hfsresearch.com

Kim HuddleManagingDirectorKPMGkhuddle@kpmg.com

Shantanu GhoshSeniorVicePresidentGenpactshantanu.ghosh@genpact.com

21st APRIL 2016

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Agenda

• Introduction

• StudyFindings

• PanelDiscussion

• Wrap-up

About HfS, The Services Research Company

Overview:• 20years’business experienceintheglobalITandbusiness process

outsourcing andsharedservices industry• Coined the“As-a-Service Economy”in2014• Industryanalyst,author,speaker,strategistandblogger• Advised andcogitatedon100’s ofglobalITservices, BPOandshared

services engagements• Meddleswiththelargestglobalnetworkofenterpriseservicesand

operationsprofessionals

CareerExperience:• PracticeLead,ITServices&BPOResearch,Gartner,Inc• GlobalBPOMarketplaceLeader,DeloitteConsulting• Consulting PracticeLead,IDCAsia/Pacific• ITMarketsPracticeLead,IDCEurope

Education:• BSwithHonorsinEuropeanBusiness &Technology, CoventryUniversity,

UnitedKingdom• DiplômeUniversitairedeTechnologie inBusiness &Technology fromthe

University ofGrenoble, France

phil.fersht@hfsresearch.com

Phil Fersht, Founder, CEO and Analyst, HfS Research

Unbridled Opinion… Simply Calling It How It Is

www.horsesforsources.com

©2016HfSResearchLtd. Proprietary│Page8

…With a More Serious Side Too! www.hfsresearch.com

©2016HfSResearchLtd. Proprietary│Page9

©2016HfSResearchLtd. Proprietary│Page10

©2016HfSResearchLtd.

The HfS Service Buyer Summits… next up San Fran

www.hfsevents.com/san-francisco-2016

©2016HfSResearchLtd.

Then onto New York…

www.hfsevents.com/new-york-2016

©2016HfSResearchLtd.

8.Plug&PlayDigital BusinessServices

Pluginto“readytogo”outcome-focused, people/process/techsolutionswithsecuritymeasuresandconsumption-basedpricing

Being As-a-Service…

AS-a-SERVICEIDEALS INTELLIGENTOPERATIONS

1.WritingoffLegacyAdoptinglonger-viewmindset tooverhaulobsoleteprocessesandscraplegacytechinvestments.Apreparednesstoinvestinchange

2.DesignThinkingReimaginingprocesseswithservicepartnerstoachievedefined,prioritizedoutcomes

3.Brokering ofCapabilitySource/manageexpertisefromallavailablesourcestoaddresscapabilitygaps

4.Collaborative EngagementMovingbeyond theFTEmodeltodrivesustained,continualvalue

5.Intelligent AutomationEmbracingautomationandcognitivecomputingtoaugmenthumanperformance

6.Having Actionable &AccessibleData

Applyinginsightsfromintegrateddata,inreal-timewithmeaningfulbusinesscontext

7.Holistic SecurityProactivelymanaging dataacrosstheentireservicechainofpeople,systems&processes

The C-Suite wants new providers, new leadership and their operations redesigned…

77%

69%

62%

54%

54%

54%

46%

46%

27%

36%

24%

43%

23%

25%

28%

48%

Replaceyourexisting(legacy)serviceprovider(s)with“As-a-Service”drivenproviders

Identify/hireatransformationalleader/changeagent

Investinspecializedexternalservicestoredesignoperations

Accomplishcreativeproblemsolving/"DesignThinking"

InvestinexternalITservicestohelpusmigrateawayfromlegacysystems

Investinspecializedchangemanagementsupporttoreorientoperationsstaff

Hireinnewoperationstalenttoredesignprocesses

Investineffectiveanalytics tools&skills

Significant Impact C-Level MiddleManagement

Howmuchimpactwouldtakingthefollowingactionshelpyoureachyourdesired“As-a-Service”end-state,ifyouweretomakethemtoday?

Source: "Ideals of As-a-Services" Study, HfS Research 2015Sample: Enterprise Buyers > $1 Billion Revenues = 178

Work in As-a-Service Progress: Digital and Data the real drivers, but current model is still delivering value

66%

53%

52%

39%

31%

23%

21%

17%

13%

Reducingtheoverallcostofprocessdelivery

Moredigitally-alignedoperations

Accessbetterdatatoimproveourbusiness

Movetoanoutcomes-drivensourcingmodel

Reducedrelianceonmanuallabortodeliverprocesses

Respondingtodisruptivecompetitors

Abilitytoaccess,in"realtime",moreflexible poolsofskilledlabor

Pre-emptingcompetitorsinourtargetgrowthmarkets

Nomorevaluetobefoundincurrentsourcingmodel

Whatarethemostsignificantdriversinyourmovetothe“As-a-ServiceEconomy”?(Choosetop3)

Source: "Ideals of As-a-Services" Study, HfS Research 2015Sample: Enterprise Service Buyers = 178

Agenda

• Introduction

• StudyFindings

• PanelDiscussion

• Wrap-up

Overview• Tracksverticalizedtechnology-enabledoperationsinbanking,financialservicesandinsurance

• Tracksenterpriseanalyticsservicesacrossbusinessfunctionsandindustryverticals• ConductsBlueprintreportsacrossserviceareasinglobalsourcing

PreviousExperience• ProjectManagerinthesourcingresearchwingofthebusinessresearchandconsultingfirmValueNotes,encompassingarangeofresponsibilities,includingresearchproductdesignanddevelopmentfortheoutsourcingcommunity,managementofcustomresearchengagements,anddevelopmentofthoughtleadershipthroughtargetedcontentandcommunityinteraction

• NicheBPOandKPOcoverage,includinganalytics,medicaltranscription,marketresearch,ande-learning

• Bespokeengagements,includingin-depthcompetitiveintelligencestudies,marketandinvestmentopportunityassessments,demand-sidesurveys,andmarketingcommunicationoptimizationforoutsourcingbuyers,providers,consultants,andinvestors

Education• Bachelor’sinBusinessAdministration,SymbiosisInternationalUniversity,India• Master’sinMarketingManagementwithBetaGammaSigmahonors,AstonBusinessSchool,UK

Reetika JoshiResearchDirector,Operations&AnalyticsStrategiesHfSResearch

reetika.joshi@hfsresearch.com@joshireetika

©2016HfSResearch Proprietary│Page18

New Research Provides A Snapshot of ‘Digital F&A’ TodayWith responses from 160 buyers, 130 service providers and 90 advisors, this studypresents challenges, opportunities and future implications for the finance andaccounting market as a whole.

■ Still A Long Way To Go In F&A Outsourcing. Thedominant operating model for F&A is still sharedservices and internal business units.

■ Room For Improvement In Finance OperationsPerformance. Most buyers express a ‘Satisfied’ state(63%) with only 9% being Very Satisfied with theoperational performance of F&A processes.

■ Digital presents a real opportunity to address thecurrent operational state of F&A. We find F&Aexecutives hopeful about the future of digitalenablement, ‘sold’ on the value proposition andbusiness outcomes, but struggling to see the businessimpact today, leading to heightened expectations fromservice providers in the next two years.

AsaFinanceexecutive sharedonthenuances ofoperationalsatisfaction,“InP2P,mostoftransactionalworkwentoverintoBPOjustfine.Itwasinvendorcontactsandproblemsolvingwhereweinitially didn’t fullyanticipatetheproblemsolvinglayer,buttheterritoryfinanceteamsdid.Wewoundupputtingasenior layerofproblemsolversintoourBPOandthatreallymovedusuponsatisfaction.”

©2016HfSResearch Proprietary│Page19

Finance Professionals Buy Into Digital Transformation

Towhatextentdoyouagree/disagreewiththefollowing statements?

Source: “Finance In The Digital Age”, HfS Research 2016Sample: Enterprise Buyers = 160

35%

32%

23%

25%

28%

49%

50%

53%

51%

46%

13%

16%

16%

19%

18%

7%

4%

6%

Enterprisesthatembracedigitaltransformationacrossbusinessfunctionswillgainmore groundthantheir

competitorsinthenextcoupleofyears

Successfuldigitaltransformation impactsthewholeserviceexperience forendcustomersandinternalemployees,byintegratingthe front,middleandbackofficeprocesses

Thenewwaveofdigitaltechnologiesisfundamentallychangingthewaythatthefinancefunctionoperates

Financeprofessionalswhoembracedigitaltechnologieswillexperiencefastercareerprogression

Serviceprovidersthatfailtoembedmoredigitalcapabilitieswithintheirfinanceandaccountingoperationswillseetheir

valuepropositionfadeaway

Agree Strongly AgreeSomewhat Neutral DisagreeSomewhat DisgreeStrongly

©2016HfSResearch Proprietary│Page20

…But 1 in 2 Buyers Is Unsatisfied With Digital Impact Today

Howsatisfiedareyouwiththeimpactofdigitaltechnologies inyourF&Aprocessestoday?

7%

8%

7%

12%

10%

10%

6%

46%

44%

45%

40%

41%

41%

44%

35%

34%

37%

30%

34%

33%

40%

11%

13%

9%

13%

14%

15%

8%

6%

RecordtoReport

Overall

OrdertoCash

FinancialPlanning&Analysis

ProcuretoPay

Treasury,Budgeting

Audit

Verysatisfied Satisfied Neutral Unsatisfied Veryunsatisfied

Source: “Finance In The Digital Age”, HfS Research 2016Sample: Enterprise Buyers = 160

©2016HfSResearch Proprietary│Page21

Buyers’ Wish list—Be More Data-Driven & Efficient Processes

Thinkingabout theadoptionofdigitaltechnologies, howimportantwouldyousaythefollowingbusinessdriversaretoyour financeorganization?

35%

39%

32%

31%

30%

23%

31%

19%

23%

57%

49%

51%

52%

52%

59%

49%

56%

47%

7%

10%

15%

16%

17%

17%

19%

23%

29%

Improveoperationalinsightstoincrease productivity

Gainoperationalefficiencytohelpstafffocusonhighervalueactivities

Breakfromlegacytechnologythatisholdingbackourorganization

Createamoreanalytical cultureamongstaff

Enhanceourcollaborativecapabilitywithourcustomersandpartners

Promotemorecreativethinkingandcollaborationamongstaff

Expand marketinsightstoimprovecompetitivenessandgrowthopportunities

Lessen theneedtokeephiringnewstafftosupportbusinessgrowth

Improvethemobilityexperienceofemployees

Hugeimportance Someimportance Minimalimportance Noimportanceatall

Source: “Finance In The Digital Age”, HfS Research 2016Sample: Enterprise Buyers = 160

©2016HfSResearch Proprietary│Page22

Investments in Digital Enablement Are Low As of Today

14%

15%

11%

10%

10%

9%

43%

39%

41%

42%

33%

26%

30%

38%

36%

35%

23%

34%

13%

8%

11%

14%

35%

31%

Cloud-based/SaaSplatformsuponwhichtobuildshareabledigitalcapabilities

Analyticsandbigdatatoolsandapplications

Mobilitytoolsandapplications

Interactive/collaborativetools,applicationsandsocialmedia

Cognitivecomputingplatformsandmachinelearning

Roboticprocessautomation(RPA)toolsandapplications

Investingheavilytogetaheadofthecurve Abouttherightamountfortoday'sneeds

Someinvestment,butnotenough Minimal/noinvestment

Whathavebeenyourinvestmentssofarinembedding Digitalcomponents intoyourF&Aprocesses?

Source: “Finance In The Digital Age”, HfS Research 2016Sample: Enterprise Buyers = 160

©2016HfSResearch Proprietary│Page23

Buyers ‘Satisfied’ With Digital F&A Are Behaving Differently

■ They expect a much bigger impact in the next two years and are accordinglyinvesting more

■ They are significantly more focused on data-driven collaboration■ They are better coordinatedwith IT and don’t see alignment as a key challenge■ Their top-five definitive plans of action involve digital talent expansion■ They have far stronger views on changing talent requirements for future finance

professionals

8% 44% 34% 13%OverallSatisfactionWithDigitalImpactonF&A

Verysatisfied Satisfied Neutral Unsatisfied Veryunsatisfied

Source: “Finance In The Digital Age”, HfS Research 2016Sample: Enterprise Buyers = 160

©2016HfSResearch Proprietary│Page24

Agenda

• Introduction

• StudyFindings

• PanelDiscussion

• Wrap-up

Introducing The Panelists

Overview• Mohit joinedMondelēz inApril2015andisresponsibleforleadingthestrategyandexecutionoftheoverallFinance&TaxSharedServicesagendaincludingpartneringwiththeserviceprovidersandMondelez leadership.

• ThispositionisalsoresponsiblefortheenablingfinanceorganizationsupportingMondelēzBusinessServices(MBS).SinceheisbasedinNewDelhi,healsoplaystheroleofbeingtheClientExecutiverepresentingMBSfortheAPACregion.

• Veryrecently,inadditiontohisexistingresponsibilities,hewasgivenchargeoftheGlobalFinancetransformationprogram.

PreviousExperience• Mohit isaCharteredAccountantandhasabout28yearsofexperiencewhichincludesalmost5yearsasaPublicCompanyCFO.

Misc• Hehasawifeanda14yearolddaughter.Helovestospendtimewiththemandholidaywheneverhegetsachance.Hisotherinterestsincludelisteningtomusic,finediningandreading.

Mohit BhatiaVicePresident,Mondelēz BusinessServicesFinanceMondelēz International

Mohit.bhatia@mdlz.com

Overview• Kimhasover25yearsofindustryexperienceinOperations,ServiceDelivery,andAdvisorywithaprimaryfocusonorganizationalandoperationaltransformation.

• Kimhashelpedcompaniesrealigntheirstructure,governanceandmanagementprocesses,establishsharedservicecenters,evaluateandtransitionservicestooutsourcingarrangements,planandtransitionprocessestoonshoreandoffshorecenters,re-engineeradministrativebusinessprocesses,andreducetheoverallcoststructureandspendongoodsandservices.

PreviousExperience• Kimhasextensiveexperienceacrossmanyindustriesindeliveringservicesaswellasassistingcompaniesimprovethedeliveryoftheirgeneralandadministrativesupportservices.HerfunctionalareasoffocusspanFinanceandAccounting,HumanResources,ProcurementandCustomerServiceandLogistics,SupplyPlanning,CustomerCare,InformationTechnology,Data&AnalyticsandEnablingTechnologies.

• ProvidedadvisorysupportforalargeCPGcompanyleadinga$1.25billionrestructuringinitiativewhichincludesdevelopmentandimplementationofGlobalBusinessServices,reorganizingtheCommercialOperations,optimizingtheSupplyChainorganizationandexpandingGlobalDataandAnalyticscapabilities.

• LedprojecttosupportaLatinAmericanMFGCompanytoevaluateanddevelopstrategicalternativesfortheirinformationtechnology,financeandaccountingandhumanresourcessharedservicesoperationsacrossallbusinessunitsglobally.

• ProvidedadvisorysupporttotheexecutivesatalargefinancialgroupastheyevaluatedtheircurrentdeliverymodelintheareasofFinanceandAccounting,CreditandGlobalBankingOperations.

Kim HuddleManagingDirector,SharedServicesandOutsourcingAdvisoryKPMG

khuddle@kpmg.com

Overview• ShantanuGhoshisresponsibleforGenpact's servicelinesthatcutacrossallindustryverticals- Finance&Accounting,SourcingandProcurement,CustomerserviceandHumanResources.

• Inaddition,heleadsGenpact's ConsultingandRiskadvisoryservices.HejoinedGenpact inearly2005andhasbuilttheFinanceandAccounting(F&A)businessforglobalclientsoutsideofGE,makingGenpact anindustryleaderinthedomainofF&Aservices.

• HefrequentlyrepresentsGenpactatindustryforumsandcontributestothoughtleadershipeffortsthroughwhitepapersandwebinars.

PreviousExperience• PriortojoiningGenpact,ShantanuwasCFOforGEIndiawithoversightresponsibilityforallGEbusinessesinthecountry.Inthiscapacity,heledtheimplementationofGE’sriskandcomplianceframeworksinthedifferentoperatingcompanies,wastheheadofGE’sCorporateAuditteaminIndiaandwasresponsibleforGE’sFinanceManagementTrainingProgramforIndia.

• Shantanu joinedGEastheCFOandpricingleaderforGE’sConsumerFinancebusinessinIndia.BeforeGE,ShantanuworkedwithUnileverIndia.

Education• Shantanu isaCharteredAccountantandhasaBachelor’sofCommerceDegreefromSt.Xavier’sCollege,India.

Shantanu GhoshSVP– CFOServices&ConsultingGenpact

Shantanu.ghosh@genpact.com

Plans to Improve Digital Finance: Analytical Capability & Digital IT

Doyouplantoexecuteonthefollowingactionstoimproveyour'Digitalfinance'experienceoverthenext24months?

Source: “Re-architecting Finance" Study, HfS Research 2016Sample: Enterprise Buyers = 160

30%

29%

19%

24%

28%

22%

20%

11%

17%

17%

42%

40%

50%

44%

37%

38%

36%

44%

29%

20%

19%

20%

23%

22%

23%

24%

30%

27%

27%

27%

9%

11%

8%

9%

12%

16%

14%

18%

27%

35%

Investineffectiveanalyticstools&skills

InvestininternalITtalenttohelpmigratefromlegacyfinancesystems

Investcontinuouslyindevelopingcompetenciesformidandseniorlevelfinancestaff tounderstandanddriveDigitaltransformation

Retraininternaloperationstalenttoredesignfinanceprocesses

InvestinexternalITservicestohelpusmigrateaway fromlegacyfinancesystems

Hireinnewtalentthat"getsDigital"toredesignfinanceprocesses

Investin3rdpartyservicestoredesignfinanceoperationstoincorporateDigitaltechnologies

Creativeproblemsolving/DesignThinkingwithservicepartner

Identify/hireatransformationalleader/changeagent

Investinroboticprocessautomation

Havemadedefinitiveplans toexecute Considering, butnoactionsyet Undecided Noplansatall

Digital Outcomes: F&A Leaders Seek Rapid Cycle Time Optimization From DigitalTowhatdegreedoyouthinktheadoptionofdigitaltechnologies willimpactthefollowing inthenexttwoyears?

34%

28%

26%

26%

25%

21%

19%

53%

49%

65%

54%

62%

54%

53%

11%

20%

8%

17%

13%

21%

25%

Cycletimeoptimization

Agilityofthebusinesstodrivechangesinoperatingmodel

Costandproductivity

Userexperienceinfinanceprocesses

Leveragingfinancialandnon-financialdataforbetterdecisionmaking

Internalandexternalcustomerexperiencesoffinanceprocesses

Operationalriskmanagement

Hugeimpact Some impact Minimalimpact Noimpactatall

Source: “Finance In The Digital Age”, HfS Research 2016Sample: Enterprise Buyers = 160

Senior Management Disconnected From Operational Layer’s Issues

18%

18%

18%

18%

16%

13%

9%

3%

1%

6%

7%

10%

3%

4%

Overall

OrdertoCash

ProcuretoPay

Treasury,Budgeting

FinancialPlanning&Analysis

RecordtoReport

Audit

SVP+

VPandBelow

Howsatisfiedareyouwiththeimpactofdigitaltechnologies inyourF&Aprocessestoday?(VerySatisfied)

Source: “Finance In The Digital Age”, HfS Research 2016Sample: Enterprise Buyers = 160

Source: Future of Jobs Report, World Economic Forum, 2016

Top skills in 2020 shift to Critical Thinking, Creativity and Emotional Intelligence

Analytics, Creativity, Automation and End-to-end Process Capability dominate talent requirements in finance

45%

37%

35%

34%

32%

30%

25%

21%

43%

51%

51%

57%

51%

58%

54%

52%

11%

12%

13%

9%

17%

11%

21%

27%

Analyticalskillstoimproveoperations/productivity

Proactivelyidentifyingnewwaysofdoingthings

Understanding/usingautomation

Improvingend-to-endprocesses

Influencingseniorexecutives

Definingbusinessoutcomes

UnderstandingLeanprinciples

Applicationofdesignthinking

Increasingsignificantly Increasingsomewhat Nochange/decreasing

Towhatextentarethefollowing talentrequirements increasing inimportance togainmorevaluefromyourfinanceprofessionals?

Source: “Re-architecting Finance" Study, HfS Research 2016Sample: Enterprise Buyers = 160

MostBuyersviewServiceProvidersasExecutionShops…

28%

52%

17%

3%

Avitalpartner thatplugscriticalgapsintermsofskills,global scale,domain

knowledgeandtechnology

Agreatvehicletodrivedowncostsandimproveefficiencies

Anaccesstocheaplabor,butlittlevaluebeyond that

Generaldisappointment

Source:TheHfSWorkingSummit forServiceBuyers,December2015(Sample53enterpriseoutsourcingleads)

Buyers:Whatdoyoureallythinkaboutserviceproviders?

Less than a third of providers are chasing digital talent…

38%

32%

32%

31%

30%

29%

27%

25%

11%

33%

37%

45%

38%

36%

27%

24%

37%

56%

13%

29%

10%

23%

25%

24%

37%

22%

22%

16%

2%

13%

8%

9%

21%

11%

16%

11%

Investing in a robotic process automation platform

Taking short term revenue sacrifices with existing clients to invest in Digital capabilities that add …

Investing in analytics talent

Aggressively pursuing risk-sharing deals with clients to co-create Digital solutions we can industrialize

Investing in millennials with a Digital culture and mindset

Investing in Digitally-savvy transformational consultants

Investing in a cognitive computing platform

Actively targeting acquisitions to add new Digital capabilitles

Targeting re-bids with low-margin offers to steal away high-potential clients

Aggressively pursuing this strategy with hard investments

Opportunistically pursuing, with some investments

Not doing enough to get ahead of this

Doing very little and hoping the old model keeps us alive for the foreseeable future

Howaggressivelyisyour firmtakingthefollowingmeasurestogeneratemoreDigitally-alignedengagementswithyourclients?

Source: “Re-architecting Finance" Study, HfS Research 2016Sample: Enterprise Service Providers = 130

Budget Restrictions And Lack of Process Standardization Stand In The WayWhatarethetop3obstaclestoyourfirmachievingmoreF&Abusiness impactthroughdigital?Rankyour top3with1being thebiggestobstacle.

51%

48%

38%

33%

29%

22%

22%

20%

16%

13%

12%

Lack of budget

Lack of process standardization

Co-ordination between IT and business

Dealing with legacy systems

Middle management incentives

Failure to align digital to business outcomes

Senior manaement incentives

Senior management don't see benefit

Change management

Lack of service provider capability

Lack of IT department capability

Source: “Finance In The Digital Age”, HfS Research 2016Sample: Enterprise Buyers = 160

The“Master/Slave”ModelDominatesToday’sServicesRelationships

21%

69%

10%

Collaborative– wejointlystrategizeandexecute

Directive– wetellthemwhattodo

Dysfunctional– there’sagenerallackof

communicationandaccomplishment

Source:TheHfSWorkingSummit forServiceBuyers,December2015(Sample53enterpriseoutsourcingleads)

Buyers,pleasedescribeyourrelationshipwithyourprimaryserviceprovider…

Howbuyerswouldimprovethequalityandoutcomesfromtheircurrentservicerelationships…

28%

13%

9%

45%

4%

2%

Lettinggoandgivingupmorehigher-valueworktoourserviceprovider(s)

Threateningtoentertaincompetitivebid(s)toforceyourcurrentprovider(s)touptheirgame

Bringbackmoreworkin-houseandimproveitourselves

Rolloutanautomationstrategyintandemwithourprovider

Bringinaspecialistadvisortorecalibrateourrelationship(s)andgetusontherightcourseforAs-

a-Service

Notalot– wepaidfor“cheapandcheerful”andthat’swhatwe’restuckwith

Source:TheHfSWorkingSummit forServiceBuyers,December2015(Sample53enterpriseoutsourcingleads)

Agenda

• Introduction

• StudyFindings

• PanelDiscussion

• Wrap-up

Questions?