Co-Sourcing – First Principles First;

Simple Best practices to get the most

out of an outsourcing relationship

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 Agenda

• Hexaware Overview
• Legg Mason Overview
• Engagement Overview
• Benefits Derived
• Lessons Learned

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 Hexaware Overview: Key Facts
167
Active Clients served worldwide
(Sep’10) Delivery centers in Mumbai, Chennai, Nagpur, Pune,
Mexico, Bangalore, New Jersey

6500
Employees globally (Sep’10)

60+
Fortune/Global 500 clients (Sep’10)
Industry Recognitions
• Leaders category for The 2010 Global Outsourcing 100 by
32 IAOP
Offices worldwide • Ranked N0: 18 in the NASSCOM’s Top 20 IT Service
Providers India Chicago
Golden
Peacock Award

• Best Employers for five consecutive years (2005 – 2009) -

214.7 Data Quest IDC
USD mn Revenues in CY ’09 • Top 100 Innovative service Provider by Global Services
• CIO 100 Ingenious Award
Certifications • #22 Employee Satisfaction Survey ‘09 DQ- IDC
CMMI Level 5, ISO 27001, PCIDSS

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 Legg Mason Overview: Key Facts

• A diversified global asset management firm, founded in 1899

• Headquartered in Baltimore, Maryland, USA
• $672 billion in assets under management as of December 31, 2010
• Approximately 3,550 employees with 34 offices around the world including New York,
Miami, London, Tokyo, Singapore, Hong Kong and Australia
• Principal affiliates include: Western Asset Management (Fixed Income), Permal Group
(Fund of Hedge Fund), Royce and Associates (Small-Cap), ClearBridge Advisors
(Equity), Legg Mason Capital Management (Equity Value), Brandywine Global (Fixed
Income, Equity) and Batterymarch (Quantitative)
• Global distribution capabilities with leading partners, including banks, brokerage firms,
insurance companies and independent advisors

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 Engagement Overview

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 Legg Mason’s Objectives
Key Drivers for the Initiative
• Reduce IT costs per resource hour
• Create shrink & grow ADM capacity
• Expand breadth & depth of expertise at LM
• Improve process capability
• Increase operational excellence
– Quality
– Productivity
– Time to market
• Leverage resource pooling model
Copyright © 2011 IAOP. All Rights Reserved.
Expectations from Strategic Partner
• Help achieve cost reduction through global
execution model
• Be a partner-advisor rather than a vendor:
Guide, Handhold and work jointly to make the
relationship successful
• Provide the right blend of resources:
– Technical
– Domain
– Process
– Management
• Bring in the Best of Breed methodology
• Ability to ramp-up and ramp-down resources
using a flexible execution model
• Proven Track Record
• Continuous Improvement through operational
excellence and solution accelerators
 RFP Evaluation Process
• RFP released to vendors based on previous relationships & analyst recommendations
• Score-card to short list vendors

Industry Knowledge & Experience Vendor 1 Vendor 2

Experiences specific to the LM business & technology context
Company Qualifications:
Ability to service requirements
Transition Methodology
Governance Framework
Risk Management & Exit Strategy

• Detailed due diligence with workshops to identify final partner

– Measure depth of expertise by meeting hands on Project Managers, SMEs through simulation of
specific project scenarios
– Reference checks
• Measure alignment of cultural values of the 2 organizations
• Successful deployments of projects
• Contract Negotiation

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 Why Hexaware?
• Hexaware strengths are very closely aligned to the LM global sourcing objectives
– Experience in similar engagements with multiple Asset Managers
– Domain & technology experts in line with the LM context
– Relationships with relevant product companies – Eagle, Thomson Reuters
– Leadership in PeopleSoft Services
– Specialized QA Solutions
• BPT Accelerators
• Pre-built test scenarios for Asset Management
– Strong Execution Capabilities combined with Solution Accelerators in J2EE, .Net, BI & BA tools
• Key Customer References
• Company Size & Values
– Flexibility & Scale
– Service oriented
– Alignment with long term cost objectives

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 Engagement Approach

Planning Transition Value Adds

• Infrastructure
• Setup
• Envisioning • Improved SLAs
• PMO and Delivery Team
creation
• Setup Governance Model • Process optimization
&
• Project Specific Transition
• SLA Definition • Y-o-Y Cost Savings
• Execution

• Measurement for SLA

Execution

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 Process Harmonization Framework

ODC
Hexaware Legg Mason Specific
processes Processes

Process Harmonization Framework

Planning Phase Pilot Phase Service Phase

ODC Specific ODC Specific
Process 1 Process 1
Legg Mason’s
Methodology ODC Specific ODC Specific
Initial process2 Going process2
Forward
methodology
Hexaware Methodology
ODC Specific ODC Specific
Methodology
Process 3 Process 3

ODC Specific ODC Specific

Process Tailoring Process 4 Process 4

Define Refine Optimize

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 Project Specific Transition

Legg Mason Responsibility Matrix Hexaware SLA

Phase 1 Phase 2 Phase 3 Phase 4 Phase 5

Planning Knowledge Transfer Responsibility Transfer Steady State Value Add

Reverse Business Value Addition

Reverse
Project KT Shadow Shadow As
Shadow Plan &
Planning Onsite SMEs Offshore Usual
Onsite Delivery

Knowledge Transfer Offshore

Offshore Development Center - Knowledge Base

Hexaware’s Proprietary Transition Framework

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 On-Site / Offshore Execution Model
Legg Mason Hexaware Onsite Hexaware Offshore
Discover &

Planning
Analyze

Acquire Business Knowledge

Analyze and document the existing functionality Tools, Adaptors, Components, Accelerators

Transition Process Knowledge Transfer & Responsibility Transfer

ASM

Maintenance & Support

Documentation

Business Specifications for new systems Testing and QA Activities

Development

Technical Specifications

Coding and Unit Testing

System Testing
UAT
Implementation/ Production Rollout

Domain Center of Excellence Program Management Technology Center of Excellence

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 CoE Model

1 2
• Expertise Building • Methodologies
• Role Based Training Benchmarking • Tools
• Prototypes / Pilots Performance • Framework

Standardization Of
Center Of Improve Operational
Development Practices Excellence
Efficiency

4 3
Cost Of Delivery
• Whitepapers
• Project Initiation / setup Focus
• Reusable Components
• Technical Helpdesk
• Best Practices sharing
• Improvements/Innovation

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 Continuous Improvements Framework

Suggestion Analysis

Project Specific •Goals and objectives •Change Management •Build IP/Tools/

process •Impact Analysis •Configuration Control Accelerators
•Work Planning •Process Release •Use IP/Tools
Process Assessments •Process Training for improvement
Non-conformance
Analysis Improved Capability
Process
Process
Causal Analysis Improvement Improved Performance
Improvements
Plan
Improved Process
Metrics Analysis

Defect prevention Reviews, Audits,

Senior Management reviews,
Technology Change Metrics, Quantitative goals,
Status reporting
Customer Feedback

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 Governance Model

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 SLA Tracking & Reporting Process
SLA Data Capture SLA Tracking SLA Analysis SLA Reporting SLA Performance
Review

Monthly
Operational
Steering Committee (SC) Review

SLA Review
Project Director

SLA
Weekly Generate
Weekly
Consolidation SLA Report
Project Manager
Analysis

Daily Consolidation
Team Leader

Update Call Log

Team Member

Prioritize / Assign
Help Desk

Analysis Presentation
Case Tracking Tool Inquiry Reports SLA Report
Reports Template
Tools

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 Benefits Derived & Lessons Learned

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 Benefits Derived
Benefits
• Flexibility to scale the resource pool up & down
• Resource risk mitigation
• Standardized processes & documentation
• Continuous development
• Test Accelerators & other IP
• Flexibility in Account Management
• ‘Near-shore’ center
• Alignment with long term cost objectives

Copyright © 2011 IAOP. All Rights Reserved.

 Lessons Learned
Lessons learned
• Cultural differences
• Issues with night-shift
• Fitment issues with re-badging
• Continuous fact-based refinement of metrics for defining success
• Continuous education of the organization about the model beyond the initial months

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 Thank You

Hloh@leggmason.com
Rajiv@hexaware.com

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