This is a presentation made at the Domestic Business Services session at the NASSCOM BPO Summit held in Bangalore in June 2009. The presentation describes the experience of India's leading retail group, Future Group in creating a new venture - Future Knowledge Services to provide retail business and technology services to the group. The presentation also presents perspectives on Domestic BPO in India and business services/BPO in the retail sector. It also showcases diverse new technology enabled business capabilities developed for the retail business - a critical requirement for new retail businesses in India.

1. NASSCOM – BPO Strategy Summit 2009
Aligning BPO opportunities in the
domestic market
June 10, 2009 - Bangalore
Rajiv Prakash
Director – Business Services & Strategy
Future Knowledge Services – Future Group
rajiv.prakash@pantaloon.com
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2. Domestic services – some learnings & observations
• A different customer world – growth rates, scale, complexity, economics and
ambiguity
• Sourcing drivers differ from offshoring – operating model, controls, cost model
• Not just process migration but often process creation and engineering
• No significant cost arbitrage – demonstrating value demands innovation
• No piecemeal solutions, demand for delivery of outcomes - hence technology +
process + skill integration often a must
• The immense value of low legacy
• A sandbox – innovate locally, scale globally
• Need for a domestic ecosystem – need to create and support an Indian business
services and platform product provider base
• Smaller and specialised partners are better
• The extra-ordinary potential of people
• Incentives for domestic services needed – significant employment creation
potential
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3. 800 + Future Group’s Consumption Business
Stores, 70 +
50 + cities
Distribution
Centres
3 million + 40
articles Supply
chains
15 +
FY05
Formats,
FY08
10
6X revenue
Categories
growth
30,000 + 25,000 +
employees vendors
Modern retail - still at a nascent stage in India

4. Future Knowledge Services (FKS) – created as a shared
network of business and technology services for the group
Retail Business’ Needs Resultant FKS design principles
Costs & Long term, sustainable low cost model
Capex Capability to create capabilities
Group sourcing hub
Open delivery model – captive or
Controls & outsource agnostic
Compliance
Leverage low legacy
Architecture: Process – Technology
Integration, Open source, network centric
Consumer
Experience & Avoid mainstream locations –
Revenues Ahmedabad hub
Provide talent the opportunity and
environment to create an unique and
Scale valuable business
Vision: to create and deliver solutions
that will shape the consumption sector 4

5. FKS Organisation Profile
• Leadership: deep experience in international and India retail technology
& business services and consulting – TESCO, KPMG, A S Watson, Cisco
and Essar
• Organisation: 600+ members combining business services, technology
services and consulting – deep domain skills
• Partnerships: SAP, Sun, Cisco, Wipro, Reflexis, JDA, Wincor,
Greenplum, Newgen
• Delivery hub: Ahmedabad – over 60% of team
• Governance: Business – FKS Governance Council
• Established in 2007
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6. An integrated set of capabilities with deep domain expertise built
to serve end to end group requirements
Service Line Description
• Assistance with design of business solutions, process and organisation, and
• Business Advisory business analysis and planning
• Ongoing delivery of a complete business process as service with
responsibility for outcomes. Integrates people, application, infrastructure and
process.
• Service types include:
• Business Services - Transaction Processing (Payroll, F&A Services)
- Contact Center : (voice helpdesk services)
- Analytics and reporting: (Reporting, Research)
- Audit and monitoring
• Technology solution design. Includes design of application, system,
• Technology Advisory
database, network and other infrastructure architecture
• Development of new applications, maintenance, and management of
• Application Development applications, package implementation, integration and testing services
and Maintenance
• Infrastructure Management Services, Hardware procurement, deployment and
• Technology Infrastructure maintenance, field level technology operations
Management
• Management of programs and projects from a business, technology and
• Program Management change management standpoint
• Portfolio management
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7. This model has helped in the creation and delivery of
significant business capabilities across the value chain
Retail PLAN BUY MOVE SELL SERVICE SUPPORT
Business
FKS Delivery to Retail
Business Consumer
Costs / Controls Experience Scale
Benefits Investments
Targeted / Revenues
Key FKS Retail Business Services and Technology Initiatives since 2008
• Finance & Accounting Shared Services • Vendor Relationship Management Platform
• Master Data Management Services • Consumer Loyalty Programs
• Inventory Audit Services • Enterprise-wide Point of Sale Replacement
• Space Optimisation Services • SAP Platform ECC6
• Reporting & MIS Services • Warehouse Management
•Merchandise and Assortment Planning • Store Management Platform
• Promotions Management • Data Centre and Network Optimisation
• Time & Attendance Services
• Open Source Office Applications
• Payroll Management Services
• Business as usual
Application Technology Business
FKS
Capabilities
Business
Consulting + Technology
Design + Development
Maintenance
+ Infrastructure
Management
+ Program
Management + Process
Delivery
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8. FKS Business Services profile
FKS Business Services has the capability to deliver a complete business process as
a service with accountability for outcomes
• A full business capability as a service
• Integrates different capability components:
– Business solution and process design
– People
– Software application
– Infrastructure
• Integrates different service types:
– Transaction processing (Rule and decision based)
– Knowledge Services
– Contact management
– Audit and monitoring
• Processes can be digitised or physical
The following section showcases three such capability examples 8

9. Capability 1 - Finance & Accounts Shared
Services
Scope & • 300 + person delivery centre in Ahmedabad serving Future Retail
Scale:
• 10 + end to end Processes – Accounts Payable incl Payments, Accounts
Receivable, Reconciliations and Reporting
• 2 million + transactions annually
Model: • Not lift and drop but migration to a to-be, standardised process model
• Full country transition from 200+ stores, warehouses and zones in 3 months
• No workflow, physical mail-room as an interim solution
• Transition managed by ex-finance department personnel
• Talent model – local graduates, internal finance dept staff migrated to Ahmedabad,
select supervisory hires sourced nationally
• Co-location of F&A Shared Services and Technology – SAP & Development teams
Platform • Cash management reporting and reconciliation
creation:
• Petty cash automation
• Invoice creation application on vendor collaboration platform
Benefits: Stronger controls, Better compliance, Cost Reduction 9

10. Capability 2 : Inventory Audit Service
Scope: • End to end delivery of physical stock-take process at the stores and
warehouses
• Computation of variances vis-à-vis book stocks, reconciliation and posting
• Shrinkage analytics and loss prevention advisory
Scale: • 250 + stores, frequency - 3 times a year, night-shifts
• 150+ people on rolls, 200+ FTE sourced from stores
Model: • Organised as 7 national hubs serving 60+ locations
• An example of technology, process, infrastructure and talent integration
• FKS designed business and technology solution, process architecture and
SOPs
• Team built through internal transfers – specialists and others
• Technology integration: Inventory Audit Application created, SAP
integration achieved, HandHeld Terminal deployed for the first time
Benefits: Accuracy, independence, stronger controls
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11. Capability 3 – Master Data Management Services
Scope & • Employee, Customer, Article (Product) and Vendor masters
Scale:
• Initial focus on Article (Product) Master – 3 million articles, annual creation 500,000+
articles
• Services:
- Article Lifecycle Management – Creation, Maintenance & Archival
- Meta-master management
- Legacy article cleanup
- Dimension and image capture
- Merchandise Hierarchy Mgmt
Model: •FKS designed - Business and Technology Solution, Process architecture and
SOPs – Designed as a SaaS model
•In-house designed MDM application with SAP integration – extensible across
multiple
categories
•Specialised skills – for exception mgmt and other services
•Product dimension capture – a physical process
Benefits: Clean, consistent, complete and rich master data and lighter database 11

12. Costs, productivity & efficiency – approach to process
improvement
Approach
Consolidate/ Standardize/
Centralise Formalise
• Finance & Accounts Services • Merchandise and Assortment Planning
• Centralised Promotions Control • Time and Attendance
• Technology Services
Automate Redesign/
Innovate
• Master Data Management • Cash Management & Reconciliation
• Store Management • Vendor Relationship Management
• Shelf and Floor Space Optimisation
Innovate
• Customer Loyalty Programs
• Open Source Platforms
• Network Architecture
Examples of initiatives in following section
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13. FKS projects and services – focus on costs, controls,
customer experience and scale
Benefits:
Enterprise Planning Right product in the right store at the right time
• Integrated and robust planning process connecting categories to concepts
• Better managed inventory - effective Open-to-Buy Management
- Cost - Controls • Lesser markdowns
- Scale - Customer • Optimum space utilisation
/Revenue
Benefits
New Point of Sale Increased revenue due to better customer experience
• Faster checkout times
• Consistency and robustness of promotions across categories
- Cost - Controls • Quick and easy fraud detection
- Scale - Customer • Centralised and open source architecture – reducing operating costs
/ Revenues
Benefits:
Store Management
Effective execution of policies and projects at the store with optimised resources
• Granular definition and management of all store related tasks
- Cost - Controls
• Reduction in communication channels to the store
- Scale - Customer • Avoid duplication of tasks
/ Revenues • Simplified setting and monitoring of performance KPIs
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14. FKS projects and services – focus on costs, controls,
customer experience and scale
Payroll Management & Benefits:
Time and Attendance Moving to positive attendance and better controlled payroll process
• Effective controls in salary payouts
- Cost - Controls • Integrated uniform attendance recording and tracking system
- Scale - Customer • Centralized attendance and leave database with Employee Self Service (ESS)‫‏‬
/ Revenues • Increased productivity due to visibility of accurate data across zones, stores & HR
Finance & Accounts Benefits:
Shared Services Robust controls and better compliance
• Strengthen controls and compliance to standard operating procedures
• Improve turnaround times in processing
- Cost - Controls • Increase productivity and reduce processing costs
- Scale - Customer • Improve capacity and accuracy of reconciliations
• Better analysis of operational and financial performance
/ Revenues
• Help business focus better on core roles
Benefits:
Warehouse Management Better throughput of merchandise from supplier to store
• Increased inventory visibility
• Improved warehouse layout
- Cost - Controls • Increased order fulfillment, and accuracy
- Scale - Customer • Reduced operating costs
/ Revenues
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15. FKS projects and services – focus on costs, controls,
customer experience and scale
Customer Loyalty Benefits
Program Strengthening emotional connect to the Consumer
• Launched new prepaid and privilege cards to increase footfall and spending in
- Cost - Controls
stores
- Scale - Customer
• Reduced operating costs of Green Card due to centralisation of technology
/ Revenues
• Analytics providing greater insight to customer spending
Space Optimisation Benefits:
Services
Enhance returns on space deployed in stores
- Cost - Controls • Improve return from store-specific floor space investment
- Scale - Customer • Ensure Space Optimization - more space to high volume & high margin products
/ Revenues • Inventory Management - SKU and inventory rationalization based on space returns
• Enhanced Customer experience - Better display of products
• Improved reporting - Performance analysis by department, brand, etc on the space
allocated
Master Data Management Benefits:
Clean data
- Cost - Controls • Significant improvement in the accuracy and richness/completeness of article
- Scale - Customer master data
• Reduction in redundant article data
/ Revenues • Productivity and standardisation of article creation process
• Improved consumer satisfaction at stores and better quality of MIS
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16. An innovatively architected and executed technology
infrastructure provides the foundation for rapid scalability
Hardware
Data Center
Business
Availability
Software
20% cost Scale
reduction
Reduced
Operational
Expenses
Agility
Rapid
Deployment
PAN India Security
Locations:
SONA 2.0 Complaint Consolidation / Centralization / Standardization
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17. NASSCOM – BPO Strategy Summit 2009
Aligning BPO opportunities in the
domestic market
Rajiv Prakash
Director – Business Services & Strategy
Future Knowledge Services – Future Group
rajiv.prakash@pantaloon.com
17