Background and Context The global sourcing market has evolved and grown rapidly to reach a size of ~US$116 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 and selective divestures during the economic crisis has led to the perception that the captive model is under threat. Stated reasons include captives are not delivering value and are 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 global offshore captive landscape across leading locations. The report is based on Everest Group’s proprietary captive database and is updated every six months. Besides providing details on global captive landscape trends and analysis, the report also contains a focus section that provides deep-dive of the captive landscape in a select geography. This report edition features the Philippines as the focus geography. Scope This research report leverages Everest Group’s proprietary captive database, the industry’s most comprehensive database on captives. The analysis is based on captives providing offshore delivery of global services, and excludes shared service centers of companies that serve domestic markets • The data and Everest Group’s experience have been supplemented adequately by interactions with captives and service providers on key topical themes of the study • This report is applicable to a broad set of stakeholders - buyers, service providers, captive organizations and industry influencers (investors, industry bodies, etc)

1. Topic: Global Offshore Captive Landscape and Trends
Focus Geography – The Philippines
Global Sourcing
Report: February 2012 – Preview Deck
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2. Our research offerings for global services
Subscription information Market Vista
 The full report is included in Global services tracking across functions, sourcing models, locations,
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– Global sourcing
Banking, financial Finance &
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services, insurance accounting
research, a subscription
may include analyst inquiry,
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options, please contact us:  Benchmarking | Pricing, delivery model, skill portfolio
– info@everestgrp.com  Peer analysis | Scope, sourcing models, locations
– +1-214-451-3110  Locations | Cost, skills, sustainability, portfolio
 Tracking services | Service providers, locations, risk
 Other | Market intelligence, service provider capabilities, technologies
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3. Background and scope of research
 The global sourcing market evolved and grew rapidly to reach a size of ~US$116 billion. Captives were 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 witnessed increased 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 also explored
and successfully established captive operations in China, the Philippines, Central and Eastern Europe, and Latin
America. Recently, Middle East and North Africa (MENA) has emerged as an attractive offshoring destination
 However, significant growth of third-party service providers and selective divestitures during the economic crisis led
to the perception that the captive model is under threat. Stated reasons include captive not delivering value and
being significantly more expensive than third-party service providers
 At the same time, mature users of captive articulate their commitment to the model and reinforce its importance in
their sourcing strategy and portfolio. Additionally, our discussions with global sourcing offices of large companies
and captive leadership reveal imperatives under way to expand the role of captive and its value proposition
 This research report provides an in-depth analysis of the global offshore captive landscape across leading locations.
The report is based on Everest Group’s proprietary captive database and is updated every six months. Besides
providing details on global captive landscape trends and analysis, the report also contains a focus section that
provides deep-dive into the captive landscape in a select geography. This edition features the Philippines as the
focus geography
Copyright © 2012, Everest Global, Inc.
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4. Buyer organizations have a range of options for capturing
value from offshoring, with captive 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 outsource business processes
cater exclusively to the parent operations that can be or IT services
company transferred back to the customer  Examples: Alcoa-Infosys, Rio
 Examples: American Express,  Example: eServe-Citigroup Tinto - Wipro
HSBC
Inverted BOT Managed third-party offshoring
 Offshore service providers  Full- / part-time resources on the
The focus of this report
provide only implementation ground to facilitate transition,
is on the captive model
support initially and are allowed relationship management, and
to buy into the entity at a later transfer of organization and
date domain knowledge to third-party
 Examples: AIG-Polaris, BA- providers
WNS  Example: Greenpoint-Infosys
BPO
Source: Everest Group analysis
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5. This research report leverages Everest Group proprietary
captive database that tracks offshore captives of leading
companies
Everest Group proprietary captive database
Unique characteristics Key dimensions tracked
 Industry’s most comprehensive database  Scale (FTE range)
of 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 and Fortune 500 companies)  Parent geographies
 Database covers more than 1,200 captive  Parent size (revenue range)
centers
 Location of delivery centers
 Focus on captives providing offshore
delivery of global services – excludes
shared services centers serving the
domestic market
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6. Table of contents (page 1 of 2)
Topic Page no.
Section I: Executive summary 8
Section II: Overview of the global captive landscape 12
 Summary 13
 Global offshore services and captive market: Size and growth 14
 Distribution of the global offshore captive landscape by:
– Parent revenue 17
– Parent geography 18
– Industry vertical 19
– Functions supported 20
– Offshore delivery locations 22
Section III: Deep-dive into key industry verticals 25
 Summary 26
 Banking, Financial Services, and Insurance (BFSI ) 27
 Energy and Utilities (E&U) 30
 Healthcare 33
 Manufacturing, Distribution, and Retail (MDR) 36
 Technology 39
 Telecom 42
Section IV: Recent trends in the global captive landscape (2009-2011) 45
 Summary 46
 Recent trends in captive set-ups and divestitures 47
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7. Table of contents (page 2 of 2)
Topic Page no.
Section IV: Recent trends in the global captive landscape (2009-2011) (continued…)
 Recent trends in offshore captive landscape (2009-2011) by:
– Parent revenue 48
– Parent geography 49
– Industry verticals 50
– Functions supported 51
– Key captive locations 52
 List of offshore captive divestitures (2009-2011) 57
Section V: Focus geography: Captive landscape in the Philippines 64
 Summary 65
 The Philippines’ offshore services and captive market: Size and growth 66
 Distribution of offshore captives in the Philippines by:
– Headcount 70
– Parent revenue 71
– Parent geography 72
– Industry vertical 73
– Functions supported 74
– Locations 75
 Deep-dive into key industry verticals 77
Appendix 82
 Recent offshore captive set-ups (2011) 83
 Glossary of key terms 100
 Additional research recommendations 101
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8. 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 2011; Percentage
100% = 1,193 100% = 1,193
G
<US$xx billion
xx% xx%
F
US$xx billion E xx% A
>US$50 billion xx% xx% xx%
xx%
D xx%
xx% US$xx billion
xx%
C
xx% xx%
US$xx billion B
Distribution of offshore captives by delivery location Distribution of offshore captives by type of cities
2011; Percentage 2011; Percentage
100% = 1,193 100% = 1,193
E C
D xx%
xx% xx%
B
xx%
C xx%
xx% A
xx%
B xx% A
Source: Everest Group (2012)
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9. The report analyzes the captive market across six key
industry verticals
BFSI
Energy and
Telecom
Utilities (E&U)
Key industry
verticals
Technology Healthcare
MDR
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10. This study also provides an analysis of the recent trend (2009-
2011) within the global captive landscape
Number of offshore captive divestitures Distribution of offshore captives by parent revenue
Percentage
100% = 1,193 65 82 83
8 >US$xx billion xx% xx% xx%
xx%
xx% xx%
US$xx billion xx% xx%
xx% xx%
2 xx% xx%
1 US$xx billion xx% xx%
US$xx billion xx% xx%
<US$xx billion xx% xx% xx% xx%
2009 2010 2011 Up to 2011 2009 2010 2011
New captive set-ups
Distribution of offshore captive by functions Distribution of offshore captives by industry vertical
Up to 2011; Percentage1 2009; Percentage1 2010; Percentage1 2011; Percentage1 Percentage
100% = 1,193 100% = 65 100% = 82 100% = 83 100% = 1,193 65 82 83
G xx% xx% xx% xx%
F x% xx% xx% xx%
IT E xx%
xx% xx% xx%
xx% xx%
41% 28% 22% 19%
D xx%
xx% xx%
C xx% xx%
B xx% xx%
ES / R&D 42% 45% 55% 66%
A xx% xx% xx%
xx%
BP3 44% 40% 39% 29% Up to 2011 2009 2010 2011
New captive set-ups
Source: Everest Group (2012)
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11. The report also covers a detailed analysis of the focus
geography – The Philippines
Philippines IT-BPO export revenue by service segments Distribution of market by sourcing models
US$ billion 2011; FTEs
100% = XX XX 100% = ~XX
IT/ESO xx% xx% Captive
Non Voice BPO xx% xx-xx%
xx%
Voice BPO xx% xx%
xx-xx%
Third-party service
provider
2006 2011E
Distribution of offshore captives by headcount – range of FTEs
2011; Percentage
100% = XX  XXX  XXX
 XXX  XXX
 XXX  XXX
XX-XX 

XXX
XXX
Baguio 

XXX
XXX
XX-XX xx%  XXX
Clark
Pasig
Bulacan
 XXX
Manila Makati
xx%  XXX Mandaluyong
Muntinlupa Quezon
 XXX
 XXX  XXX
 XXX Taguig Alabang
 XXX
 XXX  XXX
xx% XX-XX
 XXX
 XXX
XX-XX xx% Bacolod Cebu  XXX
 XXX
 XXX
xx%
XX-XX
Source: Everest Group (2012)
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12. Appendix: Additional research recommendtions
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. Global Offshore Captive Landscape and Trends, Focus Geography – China (EGR-2011-2-R-0601); 2011. This report
analyzes the global offshore captive landscape and key trends for the last 30 months (2009 - H1 2011). The report also
provides a deep-dive analysis on the offshore captive landscape in China covering market size and growth, distribution of
captive landscape, and deep-dives into industry verticals
2. Global Locations Compass – China (EGR-2011-2-R-0606); 2011. The report provides detailed data and analysis on the
global services landscape in China
3. Global Locations Compass - The Philippines (EGR-2012-2-R-0637); 2011. The report provides detailed data and analysis
on the global services landscape in the Philippines
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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13. 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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