Topic: Benefits Administration Outsourcing (BAO) Service Provider Profile Compendium

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1 Topic: Benefits Administration Outsourcing (BAO) Service Provider Profile Compendium Human Resources Outsourcing (HRO) Report: January 2012 Preview Deck

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3 Overview The Benefits Administration Outsourcing (BAO) Service Provider Profile Compendium provides accurate, comprehensive, and fact-based snapshots of 11 major BAO service providers 1, 2. Each profile highlights service provider s delivery capability, market strategy, key organizational developments, delivery footprint, and client portfolio along various dimensions such as geography, industry, buyer-size and functional scope. In addition, each profile provides the positioning of the service provider on Everest Group PEAK Matrix and an insightful analysis of its capabilities. This compendium tracks 11 service providers: Each service provider profile provides the following BAO-specific details: BAO service capability and strategy Includes company overview, BAO/HRO leadership, target market segment, BAO service suite across geographies, technology strategy, partnerships, key BAO-related developments, and spread of BAO FTEs globally BAO client portfolio Includes total number of clients and participants managed, key clients, brief description of recent BAO engagements, and client split by geography, industry, buyer-size, and core benefits areas BAO delivery locations Includes city level detail of key delivery locations across the world Detailed assessment of BAO capabilities Includes the position of the service provider on Everest Group PEAK Matrix, market success and delivery capability assessment, and overall remarks on the capabilities of the service provider 1 All the analyses are based on BAO deals signed as of June Refer to the Benefits Administration Outsourcing (BAO) Service Provider Landscape and Capability Assessment Report (EGR R-0620) for a comprehensive capability assessment of all the BAO service providers 3

4 Table of contents Topic Page no. Section I: BAO service provider landscape snapshot 4 Definition of BAO 5 Outsourcing models in BAO 6 Service provider segmentation based on their heritage 7 Section II: Service provider profiles 9 ACS 10 ADP 14 Aon Hewitt 18 Ceridian 22 Fidelity 26 igate Patni 30 Infosys 34 ING 38 Mercer 42 Secova 46 Towers Watson 50 Appendix 54 HRO research agenda 55 Additional HRO research recommendations 59 4

5 ABC (page 1 of 4) BAO service capability and strategy Company profile: ABC provides BPO and information technology services for commercial clients and government agencies. The company offers a range of health & welfare and retirement benefits administrative outsourcing services. Headquarter: Xxx, United States Leadership: Xxxx Yyyy, MD BAO; Pqr, EVP and Group President Human Resource Services Website: Partnership: BAO service provider No HRO service provider No Technology vendors No Recent BAO-related developments/announcements: Significant investment in new technology to increase service capacity and enhance consumer experience XXX Offshore (India + China+ Southeast Asia) Current BAO market segment focus: Buyer segment: Targets both mid-market (3,000 to 15,000 employees), as well as the large market segment (>15,000 employees) Geography: North America, Europe, and South America Functional capabilities within key BAO areas Regions Nearshore (Eastern Europe + Latin America) ~xxxx ~xxxx ~xxxx Total BAO delivery FTEs = ~xxxx Defined benefits Defined contributions Onshore (U.S. + Canada + Western Europe) Coverage Self Through partners Not offered Health & welfare North America Europe South America Asia Pacific Current BAO technology strategy: Core BAO technology type: ABC offers proprietary technology solution Value-adds: Employer branded portal, decision support tools, electronic health cards, and wellness programs Other benefits services offered : XXXX XXXX XXXX Source: Everest Group (2012) 5

6 ABC (page 2 of 4) BAO client portfolio BAO experience Total number of current BAO clients XX Total number of participants managed XX million Major BAO clients Recent BAO engagements Buyer Year Brief contract description XYZ global telecommunication firm PQR financial services firm Five-year H&W deal to significantly lower its healthcare spend through consumer-driven innovation DB and DC contract serving nearly xx million participants Frequency of inclusion of geographies in BAO deals Frequency of inclusion of core benefits areas in BAO deals BAO split of clients by industry BAO buyer-size mix 100% = XX clients 100% = XX clients 100% = XX clients 100% = XX clients Asia Pacific EMEA North America South America H& W DB DC Others Media Energy Healthcare Hi-tech & telecom Retail Manufacturing Financial services 3K-15K employees >15K employees Source: Everest Group (2012) 6

7 ABC (page 3 of 4) Key BAO delivery locations London Monterrey, Mexico Montego Bay, Jamaica Noida Kochi Kuala Lumpur, Malaysia Tianji n Manila, Philippines Sao Paulo, Brazil Note: Map not to scale Source: Everest Group (2012) 7

8 ABC (page 4 of 4) Detailed assessment of BAO capabilities ABC is a Leader on Everest Group PEAK Matrix for BAO High Low Delivery capability Major Contenders Emerging Players Market success Leaders ABC Delivery capability assessment Assessment dimension Scale Scope Technology capability Delivery footprint Overall Rating Remarks Significant client portfolio and large number of recent wins. Large number of participants managed Wide process scope. Presence in multiple geographies Significant investment in technology Global delivery footprint with a good usage of offshoring Market success assessment BAO market share 1 Percentage share by ACV XX% Overall 2010 Percentage share by participants managed XX% Overall 2010 XX% Overall 2011 XX% Overall Based on contractual and operational information as of June 2011 Source: Everest Group (2012) Overall remarks: Historically focused on the large market with significant success, the XXX positions ABC as a compelling option for mid-market buyers as well It has among the most comprehensive suite of services and coverage across both BAO and broader HR Outsourcing (HRO) areas. However, it has struggled to cross-sell its HRO services to its strong BAO client base xxx xxx 8

9 Additional HRO research recommendations The following documents are recommended for additional insight into the topic covered in this research report. The recommended documents either provide additional details on the topic or complementary content that may be of interest 1. Benefits Administration Outsourcing (BAO) Service Provider Landscape and Capability Assessment (EGR R-0620); This research gives an overview of the BAO market and the service providers, analyzes the key upcoming trends their reasons and implications, evaluates market shares and provides an assessment of delivery capabilities of 10+ BAO service providers. Based on Everest Group s comprehensive evaluation framework, PEAK Matrix, the 11 service providers evaluated are segmented into the categories of Leaders, Major Contenders, and Emerging Players 2. Benefits Administration Outsourcing (BAO) Annual Report 2011 Mature yet Dynamic (EGR R-0598); This research report provides a comprehensive coverage of the BAO market and analyzes it across various dimensions such as market overview and key business drivers, buyer adoption trends, transaction characteristics, and service provider landscape. It also identifies key implications of the research findings for buyers as well as for service providers 3. ADP acquires The RightThing Breaking Viewpoint (EGR V-0605); This document provides Everest Group s viewpoint on the recent acquisition of The RightThing by ADP 4. HRO Annual Report 2011 The Revival of Multi-Process HRO Market (ERI R-0518); This research study analyzes the MPHRO market across various dimensions: market size and buyer adoption, current transaction characteristics, service provider landscape, and also presents Everest Group s outlook for 2011 For more information on this and other research published by Everest Group, please contact us: Rajesh Ranjan, Vice President: Shruti Agrawal, Research Analyst: Everest Group Two Galleria Tower Noel Road, Suite 2100 Dallas, TX rajesh.ranjan@everestgrp.com shruti.agrawal@everestgrp.com Phone: info@everestgrp.com 9

10 About Everest Group Everest Group is an advisor to business leaders on the next generation of global services with a worldwide reputation for helping Global 1000 firms dramatically improve their performance by optimizing their back- and middle-office business services. With a fact-based approach driving outcomes, Everest Group counsels organizations with complex challenges related to the use and delivery of global services in their pursuits to balance short-term needs with long-term goals. Through its practical consulting, original research, and industry resource services, Everest Group helps clients maximize value from delivery strategies, talent and sourcing models, technologies, and management approaches. Established in 1991, Everest Group serves users of global services, providers of services, country organizations, and private equity firms in six continents across all industry categories. For more information, please visit and research.everestgrp.com. 10

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