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Jennifer Gallardo Suzy Ryoo Matthew Sotelo Sheena Burke

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  1. Building Global Value v Customer Sheena Burke Jennifer Gallardo Matt Sotelo Suzy Ryoo Jennifer Gallardo Suzy Ryoo Matthew Sotelo Sheena Burke

  2. Value of Global Diversification Opportunity African Strategy Euro Strategy LA Strategy Alt. Strategies Appendices $Rev International Diversification 3 B Opportunity:$4 B 2 B 1 B Current 2007 2010 2015

  3. Recommendations Opportunity African Strategy Euro Strategy LA Strategy Alt. Strategies Appendices Expansion Egypt Czech Republic Chile Value Adding Services Verticals HR Seat Utilization

  4. Agenda Opportunity African Strategy Euro Strategy LA Strategy Alt. Strategies Appendices Criteria for Region / Country Selection Strategy & Entry Egypt Strategy & Entry Czech Republic Strategy & Entry Chile Value-Added Strategies

  5. Metrics Evaluation Opportunity African Strategy Euro Strategy LA Strategy Alt. Strategies Appendices Importance Measurements Financial Attractiveness • Maintains affordability • Ease of entry • Compensation • Infrastructure cost • Tax and regulatory costs • Ability to hire qualified people • Skilled work force to provide high quality • Multi-lingual to converse with customers • IT/BPO industry size and quality • Labor force availability • Educational level • Language skills • Attrition risk People Skills & Availability Business Environment • Competitive advantages • Reduce long-run risks • Legal and political stabilization • Access to markets • Economic & Political environment • Infrastructure quality • Cultural exposure • Intellectual property security Protect core competencies in order to take on risk

  6. Regional Analysis Unfavorable Favorable Opportunity African Strategy Euro Strategy LA Strategy Alt. Strategies Appendices Latin America Eastern Europe North Africa Asia Pacific Western Europe Criteria Wage Rate (30%) Geography (15%) Multi-lingual (10%) Worker Supply (10%) Infrastructure (10%) Competition (10%) Ease of Entry (15%) TOTAL AVERAGE .625 .75 .775 .475 .60 North Africa poses the smallest expansion risk

  7. North Africa Decision Criteria African Strategy Opportunity Euro Strategy LA Strategy Alt. Strategies Appendices Finances (35%) People (30%) Unfavorable Favorable Business Env. (35%) TOTAL .5880 • Egypt • Tunisia • Morocco • Senegal .5500 .5500 .5060 Within North Africa, Egypt has the greatest potential

  8. Egyptian Growth African Strategy Opportunity Euro Strategy LA Strategy Alt. Strategies Appendices Low wages Low wage growth rate High Unemployment Favorable tax policy / incentives Economic Conditions Undiscovered VALUE Only 2.9% of world’s IT outsourcing conducted in North Africa Multi-lingual Highly skilled / educated Similarities to E. Europe – however higher growth Workforce Favorable conditions will allow long-term possibilities

  9. Egypt Expansion Model African Strategy Opportunity Euro Strategy LA Strategy Alt. Strategies Appendices Wholly Owned Subsidiary Acquisition High ECONOMIC OPPORTUNITY FOR RETURNS VALUE Czech Republic Joint Venture Low Low High RISK Wholly Owned Subsidiary is best viable option due to rising costs

  10. Why not Webhelp? Euro Strategy Opportunity African Strategy LA Strategy Alt. Strategies Appendices 118 MILLION • Requires too much capital • Different core competencies • Quantity vs. Quality Webhelp would force vCustomer to take on debt

  11. Eastern Europe Decision Criteria Euro Strategy Opportunity African Strategy LA Strategy Alt. Strategies Appendices Finances (35%) People (30%) Unfavorable Favorable Business Env. (35%) TOTAL .5875 • Bulgaria • Slovakia • Estonia • Czech Republic .5875 .5938 .6313 Czech Republic allows safest entrance to E. Europe

  12. Movement into Czech Euro Strategy Opportunity African Strategy LA Strategy Alt. Strategies Appendices Located in E. Europe Shared cultures and values Multi-lingual: English, German, other E. European languages Proximity 74% labor cost savings from Germany 33% labor cost savings from outsource competitor: Ireland Government support Low Cost VALUE 200,000 University students total 25,000 IT Students Labor Availability Czech provides close geography and relatively lower costs

  13. Czech Expansion Model Euro Strategy Opportunity African Strategy LA Strategy Alt. Strategies Appendices Wholly Owned Subsidiary Acquisition High ECONOMIC OPPORTUNITY FOR RETURNS VALUE Czech Republic Joint Venture Low Low High RISK Wholly Owned Subsidiary is best viable option due to rising costs

  14. Taking the Scenic Route Euro Strategy Opportunity African Strategy LA Strategy Alt. Strategies Appendices Additional Savings: Smaller Municipalities PRAGUE Brno Ostrava Plzen Olumouc Save 10-30% Smaller cities will increase cost savings 10-30%

  15. Latin America Decision Criteria LA Strategy Opportunity African Strategy Euro Strategy Alt. Strategies Appendices Finances (35%) Finances (35%) People (30%) People (30%) Unfavorable Favorable Business Env. (35%) Business Env. (35%) TOTAL • Brazil • Chile • Mexico • Uruguay .6188 .6313 .5938 .5938 Chile provides a cheaper base to serve Spanish speaking markets

  16. Chilean Opportunity LA Strategy Opportunity African Strategy Euro Strategy Alt. Strategies Appendices Spanish population to serve USA and Latin America Chilean government promoting bilingualism Language Skills 57 Free Trade Agreements Transparency Index: 20/163 Reliable Infrastructure Ease of Doing Business VALUE 43% College Attendance Earn pay premium over other South American countries Skilled Labor Chile is an open door with an untapped market

  17. Entering Chile LA Strategy Opportunity African Strategy Euro Strategy Alt. Strategies Appendices Wholly Owned Subsidiary ? Acquisition High ECONOMIC OPPORTUNITY FOR RETURNS VALUE Chile Joint Venture Low Low High RISK Method of entry depends on economic conditions

  18. Finger on the Trigger… LA Strategy Opportunity African Strategy Euro Strategy Alt. Strategies Appendices EGYPT • Immediate Window of Opportunity • Low saturation & wage inflation, but may change CZECH REPUBLIC • Possible Window of Opportunity • Good location to service Europe, but higher wages CHILE • Future Window of Opportunity • High-quality labor for emerging Hispanic market TRIGGER • War Chest – no debt • Need for expansion • Gov’t Incentives TRIGGER • Rebuilding of War Chest • Pressure from customers for greater cultural closeness TRIGGER • Customer request for more Spanish service • 25% Hispanic share in US population ENTER NOW REBUILD WAR CHEST WAIT FOR BOOM IN HISPANIC MARKET Capital and growth of markets trigger growth

  19. Timeline 2007 2008 2010 2013 2015 African, Euro, LA Strategy Timeline Opportunity Alt. Strategies Appendices Egypt Value Added Services

  20. Timeline 2007 2008 2010 2013 2015 African, Euro, LA Strategy Timeline Opportunity Alt. Strategies Appendices Czech Republic Egypt Value Added Services

  21. Timeline 2007 2008 2010 2013 2015 African, Euro, LA Strategy Timeline Opportunity Alt. Strategies Appendices Chile Egypt Czech Republic Value Added Services

  22. Additional Services Alt. Strategies Opportunity African Strategy Euro Strategy LA Strategy Appendices Information Needed Possible Solution Manufacturing Verticals / BPO Market • Vertical analysis reports • Past penetration of verticals • Employees' education background • Client feedback Focus on verticals in high growth regions Human Resources • Current salary rates • Organizational chart • Number of employee per organization level Add bilingual recruiter, decrease English speaking workers, global recruiting • Number of customers per location • Type of services provided per customer • Peak calling times per geographic location Seat Utilization Diversification of client base across regions throughout each service type Target BPO market, human resources and seat utilization

  23. Value of Additional Services Alt. Strategies Opportunity African Strategy Euro Strategy LA Strategy Appendices $Rev Additional Services Additional: 1 – 2 B 3 B Opportunity:$4 B 2 B 1 B Current 2007 2010 2015

  24. Recommendations Opportunity African Strategy Euro Strategy LA Strategy Alt. Strategies Appendices Expansion Egypt Czech Republic Chile Value Adding Services Verticals HR Seat Utilization

  25. Building Global Value v Customer Sheena Burke Jennifer Gallardo Matt Sotelo Suzy Ryoo Jennifer Gallardo Suzy Ryoo Matthew Sotelo Sheena Burke

  26. Appendix Appendices Opportunity African Strategy Euro Strategy LA Strategy Alt. Strategies • Global ITeS-BPO Services Market 2006 • Revenue from Scope of Services • Country Metrics • FAO Suppliers Market Share in 2006 • Offshore Location Attractiveness • Webhelp Valuation • SWOT Analysis • Decision Tree • Exit Strategy • Key Success Factors • Verticals • Human Resource Strategy • 5 Forces Analysis • Egypt Agent Position Growth (2) • Impression of Outsourcing in Verticals • Users of Offshore Outsourcing • Future Users of Offshore Outsourcing • ATKearney 2007 Africa • ATKearney 2007 Europe • ATKearney 2007 Latin America • Czech Republic Costs • Market Life Cycle • Seat Utilization • Final Financials

  27. Revenue from Scope of Services Appendices Opportunity African Strategy Euro Strategy LA Strategy Alt. Strategies Source: Gartner Dataquest Index

  28. Global ITeS-BPO Services Market 2006 Appendices Opportunity African Strategy Euro Strategy LA Strategy Alt. Strategies Source: BPO India Index

  29. FAO Suppliers Market Share in 2006 Appendices Opportunity African Strategy Euro Strategy LA Strategy Alt. Strategies Source: Everest Research Institute Index

  30. Offshore Location Attractiveness Appendices Opportunity African Strategy Euro Strategy LA Strategy Alt. Strategies Source: A.T. Kearney 2004 Offshore Location Attractiveness Index Index

  31. SWOT Analysis Appendices Opportunity African Strategy Euro Strategy LA Strategy Alt. Strategies • STRENGTHS • 100% Customer retention • Fast growth • Technical support • Low infrastructure • High quality • Customized solutions • WEAKNESSES • Smaller company • Unwilling to take on debt • Multi-lingual needs • OPPORTUNITIES • Eastern Europe estimated to triple from 2005 to 2008 • BPO market • Health care sector • Resources to expand • Lower cost with expansion • THREATS • Expansion of competition • Growing too fast • India market growth slowing • Lack of skilled workers Index

  32. Porter’s 5 Forces Analysis Appendices Opportunity African Strategy Euro Strategy LA Strategy Alt. Strategies • Barriers to Entry • Existing companies • Governmental regulations • Customer base • Suppliers • Shortage in labor • Wage rate • Competitors • Webhelp • Webpro • Convergys • Sutherland Group • Customers • Many companies to choose from • Desire higher end customers • Substitutes • In-house IT support Index Index

  33. Agent Positions- Egypt Appendices Opportunity African Strategy Euro Strategy LA Strategy Alt. Strategies Source: Datamonitor Index

  34. Agent Positions Annual Growth- Egypt Appendices Opportunity African Strategy Euro Strategy LA Strategy Alt. Strategies Source: Datamonitor Index

  35. Impresssion of Verticals Appendices Opportunity African Strategy Euro Strategy LA Strategy Alt. Strategies Source: Gartner Index

  36. Users of Offshore Outsourcing Appendices Opportunity African Strategy Euro Strategy LA Strategy Alt. Strategies Source: Gartner Index

  37. Future Users of Offshore Outsourcing Appendices Opportunity African Strategy Euro Strategy LA Strategy Alt. Strategies Source: Gartner Index

  38. Czech Costs Appendices Opportunity African Strategy Euro Strategy LA Strategy Alt. Strategies Cost Savings for Czech over Germany: (3000 euros per month) * (12 months) = 36000 euros *1.2 dollars/euro = 43000 dollars. (43000-11000)/43000 = 74% cost savings Index

  39. Middle East and Africa Index Appendices Opportunity African Strategy Euro Strategy LA Strategy Alt. Strategies Source: ATKearney Global Services Location Index 2007 Index

  40. Central & Western Europe Index Appendices Opportunity African Strategy Euro Strategy LA Strategy Alt. Strategies Source: ATKearney Global Services Location Index 2007 Index

  41. Latin America & the Caribbean Index Appendices Opportunity African Strategy Euro Strategy LA Strategy Alt. Strategies Appendices Source: ATKearney Global Services Location Index 2007 Index

  42. Decision Tree Appendices Opportunity African Strategy Euro Strategy LA Strategy Alt. Strategies Appendices North Africa Acquisition Expansion Asia-Pacific Wholly-Owned Subsidiary Eastern Europe Licensing No Expansion Latin America Joint Venture Western Europe Selected pathway Not selected pathway Index

  43. Exit Strategy Appendices Opportunity African Strategy Euro Strategy LA Strategy Alt. Strategies Appendices Scale Back Number of Agents Insufficient Demand Concentrate on Current Customers Target Additional Regions to Service Liquidate Assets Unreasonable Rise In Costs Scale Back Number of Agents Index

  44. Market Life Cycle Appendices Opportunity African Strategy Euro Strategy LA Strategy Alt. Strategies Appendices Mature Level of Growth Growth Decline Implementation Cycle Stage Index

  45. Key Success Factors Appendices Opportunity African Strategy Euro Strategy LA Strategy Alt. Strategies Appendices Potential for Growth Population Density Per Capita Income Key Success Factors Cost Competition Index

  46. Human Resources Bilingual Agent C Bilingual Agent B Bilingual Agent A Alt. Strategies Opportunity African Strategy Euro Strategy LA Strategy Appendices Sanjay Kumar CEO Vice President Global Recruiting (Bilingual) Index

  47. Seat Utilization Alt. Strategies Opportunity African Strategy Euro Strategy LA Strategy Appendices Problem: Seat utilization amongst various service centers • Information needed: • Number of customers per location • Type of services provided per customer • Peak calling times per geographic location Possible Solution: Diversification of client base across regions throughout each service type Index

  48. Vertical / BPO Market Alt. Strategies Opportunity African Strategy Euro Strategy LA Strategy Appendices Problem: Vertical focus within growing BPO market • Information needed: • Industry vertical analysis reports on market growth by region, recent and future developments, and necessary improvements for profitability • Detailed infrastructure to existing hiring and recruitment • Existing figures on past attempts for penetration of newly developing industry verticals • Figures of service center peak activity times and utilization • Specific Data of current employees' education background • Detailed Records of client feedback and suggestions for necessary improvement Possible Solution: Diversification of client base across regions throughout each service type Index