India has a dominant share in the Global Sourcing industry. Captives constitute an important segment of the India offshore services market. However, due to the recent economic crisis and maturing supplier landscape, there is a perception that the model is under threat. Stated reasons include captives are not delivering value and are significantly more expensive than third-party suppliers.
At the same time, mature users of captives articulate their commitment to the captive model and reinforce its importance in their sourcing strategy and portfolio. In addition, Everest’s interactions with global sourcing offices of large companies and senior leaders in prominent captives reveal imperatives underway to expand the role of captives and strengthen their value proposition.
This research report provides an in-depth analysis of the captive landscape in India based on Everest’s proprietary captive database, the industry’s most comprehensive database on captives. The report also challenges common myths associated with captives and provides deep insights into their evolving role and value proposition.
This research report will assist companies considering setting up a captive center to understand the role played by captives in sourcing portfolio design and provide an opportunity to learn from the experience of other companies. It will also help existing captives and their parent companies to assess their evolution and growth with respect to the overall industry, and provide pointers towards optimizing value captured from captives and offshoring programs. In case of service provider organizations, this research will provide an education on key trends shaping the captive landscape, and enable contextualization and identify implications.
- This research report leverages Everest’s proprietary captive database, the industry’s most comprehensive database on captives. From an India standpoint, the database tracks offshore captives of 240 leading companies (e.g., Forbes 2000, Fortune 500 companies) employing ~300,000 offshore FTEs. The analysis is based on captives providing offshore delivery of global services, and excludes Shared service centers of companies that serve the Indian domestic market
- The report also draws on Everest’s deep experience in advising captives, global sourcing offices of leading companies and private equity investors on diverse set strategic issues – sourcing portfolio optimization, captive benchmarking and performance improvement, optimize captive value proposition and value capture, mergers & acquisitions, captive set-up support, etc
- The data and Everest’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)
This report analyzes the current captive landscape and key market trends , discusses the evolving value proposition of captives amidst a dynamic global sourcing market, and comments on the impact on sourcing portfolio design and optimization. Finally, the report also provides detailed profile of the India captive landscape and trends in four key industry verticals – Banking, Financial Services, and Insurance (BFSI), Manufacturing, Distribution, and Retail (MDR), Hi-tech, and Software.
The report concludes with a section on implications for key stakeholders, including early adopters of offshoring, India captive centers, parents of existing captives, and service providers. The implications are tailored to each of the segments outlined above to ensure relevance.