This preview deck of the full report provides an in-depth analysis of the global offshore captive landscape and insights into key trends in the last 30 months (2009 - H1 2011). The report also provides deep-dive of the captive landscape in six key industry verticals and a focus section on China. More information on the full report can be found at http://research.everestgrp.com/Product/11590

1. Topic: Global Offshore Captive Landscape and Trends
Focus Geography – China
Global Sourcing
Report: October 2011 – Preview Deck
Copyright © 2011, Everest Global, Inc.
EGR-2011-2-PD-0601

2. Background and scope of research
 The global sourcing market has evolved and grown rapidly to reach a size of US$ 105-110 billion. Captives
have been a core component of this evolution with companies such as Texas Instruments and GE setting
up offshore captive units in the late 1980s and early 1990s
 The last 15-20 years have witnessed increasing adoption of the captive model with a large number of
companies setting up/expanding their captive centers. While India continues to remain a leading geography,
companies have also explored and successfully established captive operations in China, the Philippines,
Central and Eastern Europe, and Latin America
 However, due to the significant growth of third-party service providers the impact of the economic crisis has
led to the perception that the captive model is under threat. Stated reasons include captives not delivering
value and being significantly more expensive than third-party service providers
 At the same time, mature users of captives articulate their commitment to the model and reinforce its
importance in their sourcing strategy and portfolio. In addition, our discussions with global sourcing offices
of large companies and captive leadership reveal imperatives under way to expand the role of captives and
their value proposition
 This research report provides an in-depth analysis of the offshore captive landscape in leading locations.
The report is based on Everest Group’s proprietary captive database and is updated after six months.
Besides details on global captive landscape trends and analysis, the report also contains a focus section
that provides deep-dive of captive landscape in a select geography
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3. Buyer organizations have a range of options for capturing
value from offshoring, with captives and third-party
outsourcing as the primary models
Offshore business models
Captive model Strategic alliance / Joint Venture Third-party outsourcing model
model
Pure captive model Build Operate Transfer (BOT)/ Pure third-party offshoring
 An internal cost center or a Joint Venture (JV)  Use of an offshore provider to
100% subsidiary company to  Provider-owned/joint operations outsource business processes
cater exclusively to the parent that can be transferred back to or IT services
company the customer  Examples: Alcoa-Infosys, Rio
 Examples: American Express,  Example: eServe-Citigroup Tinto - Wipro
HSBC
Inverted BOT Managed third-party offshoring
The focus of this report  Offshore suppliers provide only  Full/part-time resources on the
is on the captive model implementation support initially ground to facilitate transition,
and are allowed to buy into the relationship mgmt, and transfer
entity at a later date of org. and domain knowledge to
 Examples: AIG-Polaris, BA- third-party providers
WNS  Example: Greenpoint-Infosys
BPO
Source: Everest Group analysis
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4. This research report leverages Everest’s proprietary captive
database that tracks offshore captives of leading companies
Everest’s proprietary captive database
Unique characteristics Key dimensions tracked
 Industry’s most comprehensive database  Scale (FTE range)
on global captives located across India,
Rest of Asia, Europe, Latin America, and  Industry verticals
Africa
 Functions offered (e.g., IT, BP, ES / R&D)
 Tracks captives of leading firms (e.g.,
Forbes 2000, Fortune 500 companies)  Parent geographies
 Database covers more than 1,000 captive  Parent size (revenue range)
centers
 Location of delivery centers
 Focus on captives providing offshore
delivery of global services – excludes
shared services centers serving domestic
market
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5. Table of contents (page 1 of 2)
Topic Page no.
Section I: Executive summary 7
Section II: Overview of global captive landscape 11
 Summary 12
 Global offshore services and captive market: Size and growth 13
 Distribution of global offshore captive landscape by:
– Parent revenue 16
– Parent geography 17
– Industry vertical 18
– Functions supported 19
– Offshore delivery locations 21
Section III: Deep-dive in key industry verticals 24
 Summary 25
 Banking, Financial Services, and Insurance (BFSI ) 26
 Energy & Utilities (E&U) 29
 Healthcare 32
 Manufacturing, Distribution, and Retail (MDR) 35
 Technology 38
 Telecom 41
Section IV: Recent trends in global captive landscape (2009 – H1 2011) 44
 Summary 45
 Recent trends in captive set-ups and divestitures 46
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6. Table of contents (page 2 of 2)
Topic Page no.
Section IV: Recent trends in global captive landscape (2009 – H1 2011) (continued…)
 Recent trends in offshore captive landscape (2009 – H1 2011) by
– Parent revenue 47
– Parent geography 48
– Industry verticals 49
– Functions supported 50
– Key captive locations 51
 List of offshore captive divestitures (2009 – H1 2011) 56
Section V: Focus geography: Captive landscape in China 62
 Summary 63
 China’s offshore services and captive market: Size and growth 64
 Distribution of offshore captives in China by
– Headcount 67
– Parent revenue 68
– Parent geography 69
– Industry vertical 70
– Functions supported 71
– Locations 72
 Deep-dive into key industry verticals 74
Appendix 80
 Recent offshore captive set-ups (H2 2010 and H1 2011) 81
 Glossary of key terms 97
 Additional research recommendations 98
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7. This research report provides an in-depth analysis of the
global captive landscape and trends
Distribution of offshore captives by parent revenue Distribution of offshore captives by industry vertical
2011; Percentage June 2011; Number of Captives
100% = 1,142 100% = 1,142
<US$xx billion G
xx% xx%
F
US$xx billion xx% A
>US$xx billion xx% xx% E xx%
xx%
D xx%
xx% US$xx billion
xx%
C
xx% xx%
US$xx billion B
Distribution of offshore captives by delivery location Distribution of offshore captives by type of cities
June 2011; Percentage June 2011; Percentage
100% = 1,142 100% = 1,142
E C
D
xx%
xx%xx%
B
xx%
C xx%
xx% A
xx%
xx%
B A
Source: Everest Group (2011)
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8. The report analyzes the captive market across six key
industry verticals
Banking, Financial
Services, and
Insurance (BFSI)
Energy & Utilities
Telecom
(E&U)
Key industry
verticals
Technology Healthcare
Manufacturing,
Distribution, and
Retail (MDR)
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9. This study also provides an analysis of the recent trend (2009-
H1 2011) within the global captive landscape
Distribution of offshore captives by parent revenue
Number of offshore captive divestitures Percentage
100% = 1,142 64 76 42
xx
xx% xx%
>US$xx billion xx% xx%
xx% xx%
US$xx billion xx% xx%
xx% xx%
xx US$xx0 billion xx% xx% xx%
xx%
US$xx billion xx% xx%
xx <US$xx billion xx% xx% xx% xx%
Up to 2011 2009 2010 H1 2011
2009 2010 H1 2011
New captive set-ups
Distribution of offshore captives by functions Distribution of offshore captives by industry vertical
Up to 2011; Percentage 2009; Percentage 2010; Percentage H1 20112; Percentage Percentage
100% = 1,142 100% = 64 100% = 76 100% = 42 100% = 1,142 64 76 42
G xx% xx% xx% xx%
F x% xx% xx% xx%
E xx%
xx% xx% xx%
xx% xx%
ES / R&D xx% xx% xx% xx% xx%
D xx% xx%
C xx% xx%
B xx% xx%
IT xx% xx% xx% xx%
A xx% xx% xx%
xx%
BP3 xx% xx% xx% xx% Up to 2011 2009 2010 H1 2011
New captive set-ups
Source: Everest Group (2011)
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10. The report also covers a detailed analysis of the focus
geography – China
China offshore services market size Distribution of market by sourcing models
2010; US$ billion 2010; US$ billion
100% = ~XX 100% = ~XX
BP Captives
Xx-xx% Xx-xx%
Xx-xx% IT Xx-xx% Third-party
service provider
Distribution of offshore captives by headcount – range of FTEs
2011; Percentage  Xx  Xx
100% = 78
 Xx  Xx
 Xx  Xx
xx-xx
xx%
 Xx
 Xx Beijing Dalian
 Xx
xx-xx xx% Nanjing Jiangsu
Xi'an Shanghai
Chengdu
xx% <xx Sichuan Wuhan Suzhou
 Xx
 Xx Shenzhen  Xx
xx%  Xx Guangzhou
xx-xx Zhuhai  Xx
Foshan
 Xx
Source: Everest Group (2011)
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11. Appendix: Additional research recommendations
The following documents are recommended for additional insight on 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. Market Vista: Q2 2011 (EGR-2011-8-R-0579a); 2011. This report summarizes the key trends and developments for Q2 2011
in the global offshoring and outsourcing market
2. India Captive Market Landscape: Challenging Common Myths and Charting Future Role (ERI-2010-2-R-0472); 2010.
This report provides an in-depth analysis of the India captive landscape and insights into key trends. The report also
challenges common myths associated with captives and provides deep insights into their evolving role and value proposition
3. Captives are Staying Alive (EGR-2011-2-R-0565); 2011. This report is intended to help educate the market regarding the
often mis-represented story of the evolution of offshore captives. It is a pointed narrative of the evolution of the captive model
– with an eye towards how captives have often been misunderstood and misperceived
For more information on this and other research published by the Everest Group, please
contact us:
Amneet Singh, Vice President - Global Sourcing: amneet.singh@everestgrp.com
Salil Dani, Research Director: salil.dani@everestgrp.com
Ritika Dhingra, Knowledge Associate : ritika.dhingra@everestgrp.com
Everest Group
Two Galleria Tower
13455 Noel Road, Suite 2100 Phone: +1-214-451-3110
Dallas, TX 75240 E-mail: info@everestgrp.com
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12. 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 www.everestgrp.com and
research.everestgrp.com.
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13. Everest Group leads clients from insight to action
Contact us for more information about our consulting, research, and industry resources.
Dallas (Corporate Headquarters) Canada
info@everestgrp.com canada@everestgrp.com
+1-214-451-3000 +1-416-865-2033
+1-214-451-3110
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+1-646-805-4000 +91-124-496-1000
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+44-207-887-1483 +31-20-301-2138
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