WHITE P APER

www.idc.com

Industry-Focused Strategic BPO Services: A Profile of

OfficeTiger
Sponsored by: OfficeTiger LLC
F.508.935.4015

Romala Ravi
May 2005
P.508.872.8200

INTRODUCTION

In This White Paper

This IDC white paper discusses the fast-growing demand for business process
Global Headquarters: 5 Speen Street Framingham, MA 01701 USA

outsourcing (BPO) services around industry-focused business processes that are tied
closely to the strategic operations and core business of a company. These services
are gaining visibility in the market from both service provision and customer adoption
standpoints. This white paper presents survey findings on the adoption of BPO for
industry-focused business processes by the financial services, legal services, and
printing and publishing services industries. The paper examines the extent to which
companies are using these services and their expectations of BPO providers of such
services.

As the Definitions section shows, the industry-focused business processes in

question are those that directly support the core business of each industry, that touch
the frontline professionals within these industries, that are high value in nature, and
that have a direct impact on the primary business of each industry.

To illustrate how the BPO services for these high-value industry-specific business
processes are packaged and delivered in the market, this paper also provides a
profile of OfficeTiger.

Definitions

Business Process Outsourcing

BPO services involve the transfer of management and execution of one or more
complete business processes or entire business functions to an external service
provider. The BPO service provider is part of the decision-making structure
surrounding the outsourced business function, and performance metrics are primarily
tied to customer service and strategic business value. Strategic business value is
recognized through such results as increased productivity, new business
opportunities, new revenue generation, cost reduction, business transformation,
and/or the improvement of shareholders' value.
Industry-Focused Strategic BPO Services
Industry-focused strategic BPO services involve the application of industry know-how
and judgment to support the core strategic business functions of an organization.
Unlike BPO for horizontal back-office functions such as HR and indirect procurement
or industry-focused transactional processes such as claims process, policyholder
services, or loan servicing, strategic BPO services target the frontline, core
professionals of a company, such as a banker in an investment bank, a lawyer in a
legal firm, or a consultant in a management consultancy.

The BPO service delivered is considered high value in that the outcome or deliverable
contributes directly to the core business of a company. For example, it may include
research and analytics that an investment banker uses to build a leveraged buy-out
model or audit support provided to a global accounting firm. The key distinction of
these strategic industry-focused BPO services is they enable professionals to apply
industry knowledge and expertise to make critical judgments on tasks/processes that
are required to run the core business of a company.

To offer services for such industry processes, a BPO provider requires industry
expertise in and understanding of a company's core business because the decisions
made by a BPO provider will have a direct impact on the outcome of a company's
core business. These services include much more than simply taking over a highly
repetitive process or transaction; they have the value proposition of also directly
contributing to and improving a company's core business activities, thereby improving
a company's competitive positioning within its industry.

Put simply, industry-specific strategic BPO services involve taking on the

management of a business process that directly supports the core business of a
company and that helps drive better operations and better decision making around a
company's core business.

The use of the words "industry-specific" and "strategic" serves to make the important
distinction between these services and "horizontal" BPO services, such as customer
care, call center outsourcing, HR, logistics, procurement, and others, as well as
industry-specific "transactional" BPO services, such as claims processing, mortgage
processing, payments processing, billing, loan servicing, and others.

BPO SERVICES OVERVIEW

Overarching Trends

BPO is front and center in the minds of business executives today. Though
outsourcing of business functions has been around for decades in areas such as
logistics, facilities management, call centers, claims processing, and billing, the BPO
market has experienced a transformation over the past four years, and new business
processes (i.e., those previously not outsourced or outsourced to a limited extent) are
fast becoming growth segments and lucrative candidates for BPO.

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In the past, companies embraced outsourcing for IT functions and for transactional
and noncore business activities such as call center management, claims processing,
payroll processing, benefits administration, and accounts payable processing. These
traditional outsourcing engagements focused very much on cost reduction and
tactical objectives such as improved response times, fast call resolution, asset or
headcount reduction, and the conversion of fixed costs to variable costs. In contrast,
companies evaluating BPO today are thinking more strategically about issues such as
improved business process management, improved competitive positioning, risk
management and transference, technology access, business flexibility, and quick and
cost-effective access to scalable and skilled resources required to support business
expansion.

With these strategic objectives in mind, companies have been looking internally to
identify new high-value business processes and, often, aspects of the core business
that can be better served by a BPO engagement. Considerations such as these have
led to the outsourcing of horizontal business processes such as engineering, direct
procurement, and other core activities. On the industry-specific front, these
considerations have caused companies to evaluate and outsource business
processes such as financial analysis, research and analytics, and other activities that
directly support core industry processes.

Industry-specific BPO services players such as OfficeTiger are aligning their offerings
to capitalize on this transformation in BPO and on the elevation of strategic drivers for
BPO adoption. The competitive pressures of today's business world, cost
management imperatives, and resource limitations are causing companies to think
beyond just outsourcing low-value transactional activities and to push the outsourcing
envelope deeper into organizational processes and value chains, from both horizontal
and industry-focused perspectives.

INDUSTRY-FOCUSED STRATEGIC BPO

SERVICES

Types of Processes and BPO Drivers

There is a wide range of industry-focused business processes. For the purposes of

this white paper, we focus on the business processes that support core activities of
specific industries, as shown in Table 1.

©2005 IDC #05C4464 3

 T ABLE 1

Industry-Focused Business Processes

Business Process Types of Activities

Data analytics and research This process involves the provision of customized qualitative and quantitative
research that supports and extends a client's internal capabilities. It includes
activities such as business information, strategic market research, data analytics,
and financial analytics.

Transaction processing associated This process is associated with the digitization, access, and management of
with electronic content electronic content and includes activities such as scanning, imaging, indexing,
coding, data capture, data entry, conversion, Web publishing, translation,
repository and archive solutions, and knowledge management.

Premedia processes
This process includes creative and publishing activities and involves taking
documents, collateral, and presentations through the development life cycle from
design to print. Specific activities include creative design, desktop publishing, and
prepress activities such as SEC filing, composition and template design of multiple
documents, and typesetting and image manipulation to create print-ready
documents.

Financial management processes This process includes activities such as financial reporting, internal financial
analysis, payables/receivables management, and billing and invoicing.

Source: IDC and OfficeTiger, 2005

IDC has observed strong demand for outsourcing the services in Table 1, and we
discuss the survey results that reinforce this demand in the next section of this white
paper.

Although the fundamental outsourcing goals of cost management and risk

transference are driving the strong interest in and adoption of BPO services for these
business processes, IDC has also observed more specific and strategic goals that are
propelling adoption. These goals are summarized in Table 2.

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 T ABLE 2

Strategic Goals Driving BPO Adoption for Industry-Specific Processes

Goals Description

Focus on core competencies The need to focus time, energy, and internal company resources on activities
associated with a company's core mission and competitive strength and reduce
their involvement in support services and daily operational technicalities

Technology access The need for cost-effective access to and effective implementation of technology to
better manage the underlying business process

Integration and centralization The need to integrate, centralize, and streamline existing processes, resources, and
systems along specific business processes to eliminate redundancies, gain
consistency across the enterprise, and drive standardization in the management of
the underlying business process

Business flexibility The need to establish mechanisms for responding to volatile/seasonal business
environments and changing business dynamics

Process improvement The need to achieve industry-standard best practices around business processes
from both operational cost and service-quality perspectives

Global business process The need to drive standards and consistency in the management of a business
management process across a global organization and gain external help to manage the
complexity associated with managing business processes across geographies

Business expansion The need to ramp up resources/capabilities for a particular business process —
required to support business expansion that results from strong growth, global
expansion, new product introduction, or a merger and acquisition

Regulatory compliance The need to ensure that business processes are being managed in compliance with
changing government regulations

New revenue streams The need to create new revenue streams as opportunities open up; the need to
access resources/capabilities associated with new product/service launches; the
need to ensure an efficient and cost-effective new acquisition process

Source: IDC, 2005

©2005 IDC #05C4464 5

The Adoption Trends: Analysis of
Demand-Side Survey Results

In February 2005, IDC conducted a survey of 171 respondents across the financial
services, legal services, and printing and publishing services industries to better
understand the BPO adoption trends across the previously mentioned business
processes. The survey had a minimum of 50 respondents from three industry
segments: financial services, legal services, and printing and publishing services.
It included respondents from three employee-size segments: 1–99 employees
(small companies), 100–999 employees (midsize companies), and 1,000+ employees
(large companies).

The goals of the survey were to first identify the source of the demand for industry-
specific strategic BPO services and then to identify the outsourcing trigger events,
decision-making approaches, and vendor selection criteria for large companies
(1,000+ employees) within each of the three verticals. The results are discussed in
the following sections.

Overall Outsourcing Adoption

Propensity to Outsource

IDC asked companies about their current adoption of BPO services and their future
adoption over the next 12 months. The results for current outsourcing and future
outsourcing were added together to arrive at the propensity to outsource each
business process (see Table 3). In aggregate, the results show a definite interest in
outsourcing the industry-focused business processes listed in Table 1.

Table 3 shows the results of outsourcing propensity by vertical industry and by

company size. Considering the relative newness of outsourcing industry-specific
strategic business processes, we view the high double-digit percentages in Table 3
as an encouraging sign that speaks to the promise and opportunity in this market.

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 T ABLE 3

Propensity to Outsource by Vertical Industry and by Company Size

(% of Respondents)
Q1. Which of the following processes do you outsource to an external service provider, either completely or partially?
Q2. Which of the following processes do you plan to outsource to an external service provider, either completely or
partially, over the next 12 months?

Printing and Small Midsize Large

Financial Legal Publishing (1–99 (100–999 (1,000+
Business Process Services Services Services Employees) Employees) Employees)

Data analytics and research 41.1 42.6 40.0 39.4 40.5 43.7

Transaction processing 42.8 40.7 50.0 29.9 56.7 54.3

associated with electronic content

Premedia/electronic prepress 30.7 29.7 56.0 27.2 48.6 44.1

Premedia/creative processes 54.8 53.7 50.0 53.0 64.9 45.6

Financial management 50.1 50.0 28.0 57.0 35.1 32.1

n= 67 54 50 74 37 60

Note: The percentages represent the sum of respondents who indicated current outsourcing of each process and future
outsourcing of each process over the next 12 months. Collectively, this data represents the propensity to outsource each
business process.
Source: IDC's BPO Services Survey, 2005

The results shown in Table 3 can be summarized as follows:

! By company size. In aggregate, midsize and large companies have a higher

propensity to outsource than smaller companies. However, the propensity differs
significantly by service line. Specifically:

# The propensity to outsource is more or less evenly distributed for data

analytics and research processes and, to a smaller extent,
premedia/creative processes.

# Large companies have the highest propensity to outsource data analytics

and research processes, with close to 44% of the respondents indicating
either current outsourcing of the process or plans to outsource over the next
12 months.

# Midsize companies have the highest propensity to outsource transaction

processing associated with electronic content activities, with nearly 65% of
respondents indicating current outsourcing of the process or future plans to
outsource.

©2005 IDC #05C4464 7

 # Transaction processing associated with electronic content,
premedia/electronic prepress, and financial management processes had the
greatest disparity in outsourcing propensity across company size segments.

# Midsize and large companies more or less mirror each other in outsourcing
propensities. The only service line that differs is premedia/creative
processes, where midsize companies have a significant lead over large
companies.

# Overall the outsourcing propensities are closer in line across company size
segments than is the case for horizontal BPO adoption, where large
companies have a clear and identifiable lead. Industry-specific strategic BPO
services appear to be applied more evenly across company size segments
and to have more balanced appeal and acceptance across different
company sizes than traditional horizontal BPO services.

! By vertical industry. When we analyzed the results by each of the three vertical
industries surveyed, we found that outsourcing propensity was also more or less
evenly distributed across all three industries, but we also made a few interesting
observations:

# Premedia/creative processes drew the highest propensity to outsource of the

three industries in aggregate. When viewed by industry, this result held true
for both financial services and legal services respondents, but not for printing
and publishing services respondents.

# Printing and publishing services respondents have the highest current

outsourcing of premedia/creative processes, but a low result for future plans
by those who do not outsource today. Therefore, the propensity to outsource
is relatively weaker among printing and publishing services respondents
than financial and legal services respondents.

# Financial services and legal services respondents have a strong propensity

to outsource financial management processes, unlike respondents in the
printing and publishing services industry. These respondents clocked in with
the lowest propensity to outsource financial management processes.

Future Directions for Outsourcing

When respondents were asked about the direction of future BPO spending from
current levels, the aggregate responses for all respondents showed an even split
between plans to increase versus plans to stay at current levels. The results by
industry and by company size are shown in Table 4.

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 T ABLE 4

Direction of Future Outsourcing Spend by Vertical Industry and

by Company Size (% of Respondents)
Q. In total, do you expect spending with external service providers to increase, decrease, or stay the same over the next
12 months?

Printing and Small Midsize Large

Financial Legal Publishing (1–99 (100–999 (1,000+
Response Services Services Services Employees) Employees) Employees)

Increase 40.3 31.5 46.0 36.5 37.8 43.3

Decrease 3.0 0.0 2.0 1.4 0.0 3.3

Stay the same 35.8 50.0 32.0 47.3 40.5 28.3

Don't know 20.9 18.5 20.0 14.9 21.6 25.0

n= 67 54 50 74 37 60

Source: IDC's BPO Services Survey, 2005

The results in Table 4 can be summarized as follows:

! By company size. The results were somewhat different across company size
segments. Large companies, at 43.3%, are more inclined to increase outsourcing
spend over the next 12 months, whereas midsize and small companies are more
inclined to keep outsourcing spend at current levels. An encouraging sign is that
only a very small, and therefore negligible, percentage of respondents plan to
decrease outsourcing spend.

! By vertical industry. In total, the printing and publishing services respondents

have the highest percentage for planned increase in outsourcing spend.
However, the results are generally high across the board. All industries indicate a
low percentage decrease in outsourcing spend. This finding shows that interest
in outsourcing is definitely strong. The fact that "stay the same" and "increase"
accounted for the highest percentages shows that outsourcing is a strong value
driver for these industries, specifically for the industry-specific business
processes that are the subject of this study.

Having established overall outsourcing patterns, we present the remainder of our

analysis by vertical industry. Further, because the propensity to outsource and future
outsourcing direction both point in favor of large companies, the rest of the vertical
industry analysis focuses on and highlights the responses of companies with 1,000 or
more employees.

©2005 IDC #05C4464 9

Analysis by Vertical Industry: Large Companies

Propensity to Outsource

The outsourcing propensity for large companies within each vertical industry is shown
in Table 5.

T ABLE 5

Propensity to Outsource: Large Companies by Vertical Industry

(% of Respondents)
Q1. Which of the following processes do you outsource to an external service provider, either completely or partially?
Q2. Which of the following processes do you plan to outsource to an external service provider, either completely
or partially, over the next 12 months?

Printing and Publishing

Business Process Financial Services Legal Services Services

Data analytics and research 43.3 46.2 42.1

Transaction processing associated 48.1 61.6 56.9

with electronic content

Premedia/electronic prepress 34.3 30.8 68.5

Premedia/creative processes 46.9 38.5 42.1

Financial management 54.4 7.7 5.3

n= 28 13 19

Source: IDC's BPO Services Survey, 2005

The results in Table 5 can be summarized as follows:

! Both the acceptance of and propensity to outsource data analytics and research
and premedia/creative processes are more or less equal across industries.

! Legal services and printing and publishing services respondents have a relatively
higher propensity to outsource transaction processing associated with electronic
content.

! The printing and publishing services industry has a very high propensity to
outsource premedia/electronic prepress processes because the types of
activities in this area are typically printing and publishing in nature.

! Financial services respondents are unique in their high propensity to outsource

financial management processes. In contrast, large companies in the legal
services and printing and publishing services industries have a very low
propensity to outsource financial management processes.

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Outsourcing Trigger Events

Respondents were asked what types of events would trigger a decision to outsource
these business processes. The responses by large companies segmented by vertical
industry are shown in Table 6.

T ABLE 6

Top 5 Outsourcing Trigger Events: Large Companies by Vertical Industry

Q. Please select the top 5 events that might trigger your company to consider outsourcing these business processes.

Financial Services Legal Services Printing and Publishing Services

Lack of skilled professionals Conducted thorough internal cost Conducted thorough internal cost
(60.0%) analysis (61.5%) analysis (50.0%)

Outgrew existing infrastructure Lack of skilled professionals (53.9%) Outgrew existing infrastructure and need
and need to expand (48.0%) to expand (38.9%)

Tough market conditions (44.0%) Outgrew existing infrastructure and need Expansion in product portfolio (44.4%)
to expand (38.5%)

Conducted thorough internal cost Global expansion of customer base Mergers and acquisitions (33.3%)
analysis (36.0%) (30.8%)

Mergers and acquisitions (32.0%) Expansion in product portfolio (30.8%) Lack of skilled professionals (33.3%)

n = 25 n = 13 n = 18

Source: IDC's BPO Services Survey, 2005

The results in Table 6 show that respondents are triggered to outsource by three
types of events:

! A lack of skills required to conduct each process efficiently and successfully is a

key trigger event across all industries and is the top trigger event for financial
services respondents.

! Business expansion of any sort is an important trigger event and includes

expansion related to mergers and acquisitions, infrastructure, product portfolio, or
geographic coverage.

! Cost pressures also feature prominently as trigger factors. Companies are

triggered to outsource after having conducted thorough internal cost analyses
that might indicate outsourcing as a cheaper alternative. Financial services
respondents also highlight tough market conditions, which could place both cost
and competitive pressures on already stretched internal resources and budgets.

©2005 IDC #05C4464 11

Decision-Making Process

The majority of large companies across all industries have formal processes in place
to assist in their outsourcing decisions and in their selection of a particular BPO
vendor for their industry-specific business processes. On average, over 82% of large
company respondents answered "yes" when asked whether they have formal
decision-making processes in place. A higher-than-aggregate percentage of financial
services respondents (86%) indicated that they have formal decision-making
processes in place. Legal services respondents and printing and publishing services
respondents were at 77% and 79%, respectively.

Table 7 identifies the decision makers within large companies in each industry; it
captures only the top 3 responses.

T ABLE 7

Top 3 Decision Makers: Large Companies by Vertical Industry

Q. Within your company, who is involved in the decision-making process when selecting an external service provider?

Financial Services Legal Services Printing and Publishing Services

Department VP (60.7%) Board of directors (46.2%) CFO (31.6%)

IT director/manager (50.0%) President (30.8%) Department VP (31/6%)

CIO (35.7%) CEO/department VP (23.1%) CEO/president/IT director (21.1%)

n = 28 n = 13 n = 19

Source: IDC's BPO Services Survey, 2005

The results in Table 7 show that:

! Financial services respondents are largely making decisions at the business unit
level.

! Legal services respondents are adopting a top-down approach, with decision

making emanating from senior leadership.

! Printing and publishing services respondents are driven by a combination of

financial and operational considerations. Hence CFOs and business unit leaders
are equally involved in the outsourcing decision-making process.

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Vendor Selection Criteria

The top 5 criteria that large companies consider in their final selection of a BPO
provider are shown in Table 8.

T ABLE 8

Top 5 Vendor Selection Criteria: Large Companies by Vertical Industry

Q. Please select the top 5 criteria your company considers important in its final selection of an external service provider.

Financial Services Legal Services Printing and Publishing Services

Is a specialized provider with Can create content customizable to my Provides high-quality services (68.4%)
proven expertise (57.1%) needs (69.2%)

Provides high-quality services Provides high-quality services (69.2%) Can create content customizable to my
(57.1%) needs (57.9%)

Stability of provider (57.1%) Is a specialized provider with proven Stability of provider (52.6%)
expertise (53.9%)

Can create content customizable to Has excellent references (46.2%) Knows technology and its impact on my
my needs (53.6%) business (52.6%)

Employs professionals with Stability of provider (38.5%) Employs professionals with extensive
extensive experience (50.0%) experience (47.4%)

n = 28 n = 13 n = 19

Source: IDC's BPO Services Survey, 2005

The results in Table 8 can be summarized as follows:

! Service quality is a key consideration and features prominently in the top 5 list
across all industries.

! Customization of services offered is an important final selection criterion.

Despite the highly repetitive nature of many of these business processes, and
the applicability of these services across a range of industries, buyers of BPO
services want vendors to demonstrate the customized aspects of their services.

! Vendor stability is another important criterion and is especially high on the lists
of both financial services and printing and publishing services respondents.
Because the services in question are high value and directly touch the core
business of a company, having a provider that is stable and will be around for a
long time is an important consideration.

! Specialized skills and extensive and proven experience are highly valued
attributes for any service provider looking to play across any of these industries.

©2005 IDC #05C4464 13

! Excellent references are emphasized by the legal services respondents. This
finding is likely due to the unique requirements of the legal industry. For example,
even in something as "basic" as word processing, the vendor needs to have an
understanding of the context of the document. This understanding will impact
process flow and timeliness. Familiarity with legal terminology is also important.
Legal firms are likely looking to excellent references as an indication of vendor
experience in the industry. Having to assess this experience from scratch would
be an uphill task, whereas having other law firms' testimony about a vendor's
capabilities would provide for a quick and straightforward assessment.

! Knowledge of technology and its application to the business is a key

requirement for printing and publishing services respondents because technology
application is an important productivity driver for the printing and publishing
business.

OFFICETIGER COMP ANY OVERVIEW

Company Background

Founded in 1999 by former investment bankers Joe Sigelman and Randy Altschuler,
OfficeTiger is a diversified, industry-focused provider offering judgment-based
services to professional services firms and Fortune 500 companies. OfficeTiger offers
tailored solutions to different verticals through its four service lines: Premedia, Data
Analytics and Research, Financial Management, and Transaction Processing. These
service lines are described briefly in Table 9 and more in-depth in Table 10.

OfficeTiger's industry-focused services support the mission-critical core functions of

its clients. The company creates, processes, and distributes mission-critical
information for investment banks, diversified financial institutions, legal firms, print
and publishing houses, retail chains, and Fortune 500 companies. OfficeTiger's
contextual and highly specialized services address activities that are central to the
day-to-day lives of the professionals they serve, such as bankers, lawyers,
consultants, analysts, printers, and procurement officials.

Headquartered in New York City, OfficeTiger currently drives its operations from its
three major facilities — two in Chennai, India, and one in Colombo, Sri Lanka. The
company also runs satellite operations in Bangalore and Mumbai, India. OfficeTiger's
operations are spread across seven countries and over fifteen sites in the United
States, United Kingdom, Continental Europe, India, and Sri Lanka. OfficeTiger has
experienced exponential growth in sales and has seen revenue double year to year
since its inception.

14 #05C4464 ©2005 IDC

OfficeTiger's long-term contracted clients include eight large investment banks, two
large management consultants, global law firms, global publishing houses, national
business services companies, third-party administrators, Big 4 accounting firms, and
large private equity and venture capital firms.

T ABLE 9

OfficeTiger at a Glance

Category Description

Year founded 1999

Headquarters New York City

Supporting locations and resources • Over 2,500 professionals worldwide, including 500 MBAs and chartered
accountants offering integrated, globally sourced services in 15 delivery centers
(including 9 client sites)

• Headquarters, along with the London and Frankfurt offices, serve as major
sales and implementation offices

• Two operation centers in Chennai (India) and one in Colombo (Sri Lanka)

Service lines OfficeTiger's four service lines are Data Analytics and Research, Financial
Management, Premedia, and Transaction Processing. Each service line in turn
contains a wide range of specific services offered to clients. Details are provided in
Table 10.

Vertical industries Investment banking, diversified financial services, legal, management consulting,
print and publishing, pharmaceuticals, retail, and real estate

Key clients Eight large investment banks, two large management consultants, global law firms,
global publishing houses, national business services companies, third-party
administrators, Big 4 accounting, and large private equity and venture capital firms

Source: IDC and OfficeTiger, 2005

©2005 IDC #05C4464 15

Company Capabilities and Differentiators

A Hybrid Model of Service Delivery

OfficeTiger offers a hybrid model of service delivery that combines and integrates
onsite presence and management with offsite operational support. Over the years,
OfficeTiger has built and strengthened its global delivery capabilities, with an
emphasis on hiring MBAs with strong industry backgrounds. This emphasis on
staffing all locations with highly skilled and specialized employees, or professionals
with advanced degrees, directly addresses buyers' needs for access to resources
with specialized skills and extensive industry-specific experience.

The integrated global delivery platform that is the foundation of this hybrid model is
essential for the type of business processes OfficeTiger handles as an outsourcing
provider. Because these business processes address core business functions and
are of high value to clients' core employees, OfficeTiger's onsite presence helps with
workflow coordination and overall project management and provides the face-to-face
client interaction that is critical in these types of services. Further, onsite resources
help to drive the seamless integration between client operations and OfficeTiger
service delivery and help to promote client confidence and comfort with OfficeTiger.
At the same time, offshore operational locations enable clients to benefit from
cost-efficient and "round-the-clock" services.

Building Partnerships with Clients

OfficeTiger's approach is to build a foundation for long-term relationships with its
clients. Because OfficeTiger addresses processes that are so closely intertwined with
and support core business processes, the company stresses high-level integration of
its services with a client's workflow. As a result, its role as an outsourcer becomes
transparent and seamlessly linked to that of its clients. OfficeTiger's goal is to instill
confidence among its clients by emphasizing long-term relationship building and deep
integration between its own workflow and that of its clients.

Many of the processes OfficeTiger addresses and the types of industries it targets,
such as financial and legal services, are characterized by huge amounts of
confidential and sensitive information. Further, information confidentiality and security
considerations around information flow are important issues for clients and often are
the biggest obstacles to outsourcing. Therefore, by approaching client engagements
as long-term partnerships and entrenching itself into clients' value chains, OfficeTiger
can help drive client confidence and allay client concerns.

Going Deeper into Clients' Value Chains

As part of its long-term partnership-building approach, OfficeTiger works to identify
and grow its business with companies for which it can provide services that cover a
wide range of areas and that go deep into clients' value chains. For example,
OfficeTiger might start an engagement with an investment bank by providing
electronic presentations. This engagement could lead to conducting research for the
presentations and delve even deeper into financial analysis of the companies
mentioned in the presentations. OfficeTiger's goal is to start from one set of activities

16 #05C4464 ©2005 IDC

in the business process value chain of its clients and grow and move deeper into
other aspects of a business process, thereby becoming a more valuable partner and
service provider to its clients. Thus, OfficeTiger is also enabling its clients to adopt a
tighter approach to keeping in-house only what is absolutely core and outsourcing as
many support and noncore areas as possible to drive down costs, reduce assets, and
focus internal resources on where they count and contribute the most. This focus on
establishing depth within clients' value chains allows OfficeTiger to become more
familiar with clients' needs and in turn positions it well to help clients identify and
execute process reengineering as well as pursue an approach of continuous
innovation for the business processes being outsourced.

One example of OfficeTiger's approach in going deeper is the work it does with a
global investment bank. OfficeTiger started by taking over the management of a
150-person onsite document creation and processing center. This engagement has
since expanded to include a separate 100-person offshore team that supports the
onsite team; together, these groups process high-profile and quick-turnaround
documents for the bank. OfficeTiger has also gone beyond document processing to
provide the bank with financial analysis, tactical development work, and high-end
studio design.

Building Its Capabilities Through Partnerships and Acquisitions

Although organic growth has been the main engine driving OfficeTiger's growth, the
company has also more recently opened itself up to partnerships and acquisitions to
improve upon and build its capabilities. In June 2004, OfficeTiger established a joint
venture with Hildebrandt International, a leading consulting firm focused on the legal
industry. The joint entity will bring a more comprehensive breadth of capabilities
specifically targeted at the outsourcing needs of the legal industry. In October 2004,
OfficeTiger acquired United Kingdom–based Devonshire Group, expanding its
presence in Europe for creative services.

Service Offerings

OfficeTiger has a wide set of offerings addressing high-value industry-specific

processes across a range of industries. Table 10 provides a description of each
service line.

©2005 IDC #05C4464 17

 T ABLE 10

OfficeTiger Service Overview

Data analytics and research This service line targets repetitive tasks facing professionals such as bankers, lawyers,
consultants, and recruiters. It is based on an approach the company refers to as Search,
Synthesize, and Analyze. This service line includes the following discrete offerings:

• Business Information Services

• Financial Analytics

• Equity Research

• Credit Analytics

• Market Research

• Data Analytics

• Intellectual Property

Financial management This service line encompasses finance and accounting activities such as general
accounting, financial reporting and risk management, treasury and investment
management, transaction processing, tax management, and 401K and mutual fund
processing. Specific offerings within this service line are as follows:

• Retirement services

• Fund services

• Real estate management

• General ledger

• Financial reporting

• NAV

• Reconciliation

Premedia This service line encompasses three subsegments: electronic prepress services (EPS),
enterprise document solutions (EDS), and creative services (CS). Through these three
subsegments, this service line provides the entire set of capabilities required in print and
publishing, from concept, design, and composition to prepress services and release to print.
The discrete offerings under each subsegment are as follows:

• Word processing

• Presentation services

• SEC compliance

• Composition/typesetting

• Publishing

• Studio design

Transaction processing This service line handles all aspects of content conversion, processing, tagging, and
publishing. Key offerings within this service line are as follows:

• Claims processing

• Litigation support

Source: IDC and OfficeTiger, 2005

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Customer Case Studies and Value Proposition

This section provides a sample of the BPO work OfficeTiger does with its clients.
These examples help to cull the key benefits and value proposition OfficeTiger
provides its clients. Client names are confidential; therefore, the case studies highlight
only the clients' industries.

Case Study 1: Outsourced Presentation Services for a Global

Investment Bank

Background and Drivers for Outsourcing

A global investment bank needed scalable and cost-effective skilled resources to

support its publishing department on a 24 x 7 basis. The objective was to access
quick turnaround time for high-quality presentations.

OfficeTiger Solution and Client Benefits

Through its Premedia service line, OfficeTiger offers the bank the following services:

! Creating, editing, and formatting of Word, PowerPoint, and Excel documents

! Document conversion

! Composition and preflighting of quarterly and annual fund books

OfficeTiger and the client started the engagement with a dedicated five-member client
team with one onsite workflow coordinator. Since then, the team has expanded to
21 members to support increased volumes. Additionally, the client has expanded the
scope of its engagement with OfficeTiger to include imaging and indexing of
confidential business documents as well as knowledge management services.
Overall, the client has integrated OfficeTiger into its operations so that OfficeTiger
functions as an extension of the client's administrative work processes.

Client benefits resulting from this outsourced engagement include:

! A scalable resource structure that enables the bank to meet peak demands at
incremental costs

! Cost savings of up to 70%

Case Study 2: Outsourced Financial Management Services for a Global

Investment Bank

Background and Drivers for Outsourcing

A major fund-of-funds group within a global investment bank sought to outsource

select financial management activities to access 24 x 7 scalable and cost-effective
skilled resources to manage these activities. Fund of funds is a group of investment
funds that focuses on domestic and international leveraged buyouts as well as
structured equity investments, including other private equity funds and mezzanine,
real estate, and venture capital investments.

©2005 IDC #05C4464 19

OfficeTiger Solution and Client Benefits

Through its Financial Management service line, OfficeTiger provides the following
services to the bank:

! Quarterly review of existing holdings in the private equity fund

! Exposure analysis by sectors and geographies

! Monitoring of portfolio performance

! Maintenance of portfolio data

! Creation of customized portfolio reports

OfficeTiger commenced operations in March 2002 with one analyst. The resources
have since expanded to a dedicated eight-member client team with both an onsite
and offshore presence. The team is a mix of intermediate and highly qualified
chartered accountants who track over 600 funds on a quarterly basis.

As part of its engagement with the client, the OfficeTiger team has done the following:

! Conducted comprehensive qualitative and quantitative reviews of the fund's

portfolio, including valuation and diversification analysis

! Performed attribution analysis of the portfolio by investment type, sector, stage,

and geographic location to optimize portfolio allocation

! Provided customized analysis as directed by the client

! Maintained the portfolio in a multitier structure

! Created monthly, quarterly, and yearly performance reports providing a

comprehensive view of fund activities for each period

! Updated the client's Web-based reports in real time, as the reports were
completed

Through the outsourcing engagement, the bank has achieved up to 40% in cost
savings. In addition, the engagement has helped improve turnaround time and
enabled the bank to provide bankers with timely periodic customized portfolio reports
that in turn facilitate the portfolio management process.

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OPPORTUNITIES AND CHALLE NGES
OfficeTiger has enjoyed initial success with its portfolio of industry-specific BPO
services. A combination of market foresight and perseverance has helped the
company increase its strength and build good traction in the market for industry-
specific strategic BPO services. Specific strengths that OfficeTiger has displayed
include:

! Identifying a market need at a time when it was critical and underserved by other
BPO providers

! Casting a wide net in the market first and then making the offerings more
targeted and incremental as market acceptance increased

! Pursuing clients where low-hanging fruit presented itself, demonstrating results,

and then expanding further into related activities with the approach of building
deep relationships with existing clients and integrating deep into clients' value
chains

Six years after its founding, OfficeTiger has built good traction and proven its value
proposition to the market. Today the company offers a wide and impressive array of
services addressing the support requirements of a diverse set of strategic industry-
specific business processes. The company also scores well and continues to build on
many of the vendor selection criteria identified by prospective buyers, such as high
service quality, customized offerings meeting specific client needs, and investment in
specialized skills and employees with extensive industry experience.

As OfficeTiger works to expand its growth further, it will have to address the following
challenges:

! Sustaining the costs of a highly skilled workforce and ensuring quality and
service consistency as the workforce expands to meet growing demand

! Maintaining a position of profitability and financial stability required to propel the

company into its next phase of expansion

! Maintaining the market traction it has established as IT service providers that are
aggressively pursuing BPO overall start to make their presence felt in this market
segment

! Establishing the brand visibility that is needed to stand apart from other providers
as the market attracts new entrants

©2005 IDC #05C4464 21

CONCLUSION
OfficeTiger has made an early leap in a market that is attracting more attention and
interest today. With companies thinking strategically about BPO, new areas
previously thought to be "too core to outsource" are now being released to the
outsourcing world. Industry-specific strategic business processes, such as those
targeted by OfficeTiger, are part of this new wave in BPO adoption. Survey results
point to strong outsourcing acceptance and high outsourcing propensity for these
services, specifically among large companies but also increasingly among midsize
and small companies.

IDC expects this market to experience strong growth over 2005 and beyond. The
results experienced by early adopters will help to validate outsourcing's value
proposition and will drive further acceptance of BPO for these industry-specific
processes. Yet, further acceptance will also attract new players into this market,
specifically the IT service providers with broad offerings, as well as other niche
industry-specific BPO vendors. Brand analyses already show large IT service
providers commanding strong brand perception in this market where most do not
have dedicated offerings at the current time.

Although OfficeTiger's current strategy of building partnerships with clients and going
deeper into clients' value chains is on the right track, the company would also do well
to forge partnerships not just with industry groups but also with some of the IT service
providers with broad offerings. IT service providers are not likely to build these
solutions from scratch, but they are likely to look for viable partners or acquisition
targets. In addition to pursuing new client acquisitions and expanding the current
client base, OfficeTiger must also focus on positioning itself to be favorably
considered by IT service providers for partnerships and alliances.

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22 #05C4464 ©2005 IDC