Thomas Bo Joergensen Mikkel M. Krogsgaard Jonas H. Levring Stefan K. Madsen

1. Creating New Markets Thomas Bo Joergensen Mikkel M. Krogsgaard Jonas H. Levring Stefan K. Madsen Tietgen Consultancy Inc. A Legacy of Growth

2. The vCustomer winning formula “Where do we expand? And how does the geography interact with our choices about what services to provide and what verticals to serve?” Sanjay Kumar

3. The vCustomer winning formula Bulgaria will be your launch pad for becoming the market leader of BPO within travel, hospitality, & retailing in Europe.

4. Where to go What to offer How to do it Tomorrow The situation today Information Technology Enabled Services Industry BPO (Business Process Management) CRM (Customer Relations Management) Type of business Share of revenue 15 % 85 % • - Data management • - Data Mining • - Data processing • - Data Validation • - Data Entry • - Content Digitalization • - Customer Care Solution • - Contact Center Consulting • - Technology Help disk • - Integrated CRM Solution • - Knowledge Solutions Services

5. Where to go What to offer How to do it Tomorrow You are serving four industries Retailing Technology Telecom Travels & Hospitality

6. Where to go What to offer How to do it Tomorrow Finding low cost and stable environment

7. Where to go What to offer How to do it Tomorrow Sorting by education and labor regulation

8. Where to go What to offer How to do it Tomorrow Over 40 indicators! Doing Business 2006 Ease of Doing Business Rank, Starting a Business:Rank, Procedures (number), Time (days), Cost (% of income per capita), Min. capital (% of income per capita), Employing Workers:Rank, Difficulty of Hiring Index, Rigidity of Hours Index, Difficulty of Firing Index, Rigidity of Employment Index, Nonwage labor cost (% of salary), Firing costs (weeks of wages), Paying Taxes: Rank, Payments (number), Time (hours), Profit tax (%), Labor tax and contributions (%), Other taxes (%), Total tax rate (% profit), Enforcing Contracts: Rank, Procedures (number), Time (days), Cost (% of debt), Economy Characteristics:GNI per capita (US$), Informal economy estimate (% GNP), Population. World Global Competatitiveness Report 05-06 Macroeconomics:Total GDP 2004 (bUSD), Recession expectations, Business Cost of Terrorism, Impact of Rules on FDI, Goverment Surplus/ defecit 2004, Inflation 2004,Technology:Firm-level Tech Readiness, Quality of Competition in the ISP Sector that insure quality, Extent of Business Internet Use HR: Quality of Educational System, Quality of Math and Science Education, Ease of Hiring Foreign Labour, Life Expectancy, Infrastructure:Overall infrastructure, Phone infrastructure, Government: Judicial independence, Efficiency of Legal Framework, Reliability of police services, Business Cost of Crime and Violence, Business Cost of Corruption, Foreign Ownership Restrictions, Restrictive Labour Regulations

9. Where to go What to offer How to do it Tomorrow From twenty to five

10. Where to go What to offer How to do it Tomorrow Top five countries

11. Where to go What to offer How to do it Tomorrow Top five countries Avg. monthly wage Cost of living Quality of living Mexico $89 L LVL South Africa $750 MH MH Slovakia $763 M MH Hungary $500 M MH Bulgaria $239 L MH Avg. monthly wage in US dollars Cost of living: Low, Medium, High Quality of living: Very Low, Low, Medium, High Source: Mercer among others

12. Where to go What to offer How to do it Tomorrow Finding your client market Billion $

13. Where to go What to offer How to do it Tomorrow Finding your client market Billion $ Total European market value: $ 76 billions

14. Where to go What to offer How to do it Tomorrow Covering the languages Total: ~321 mill English ~64 mill Italian ~58 mill Spanish ~41 mill German ~98 mill French ~60.5 mill

15. Where to go What to offer How to do it Tomorrow What can Tietgen Consultancy offer? Tietgen Consultancy will assist you in: • Entering Bulgaria • Developing product portfolio for BPO automation for the new European markets

16. Where to go What to offer How to do it Tomorrow How to develop product portfolio Analyze market to fit customer needs in automation Define additional services for vertical automation Create PDRs for cheap programming in India

17. Where to go What to offer How to do it Tomorrow Entering Bulgaria Bulgaria can be entered by: • Acquiring partner • Setting up a Bulgarian BPO-joint venture by exploiting existing partnership

18. Where to go What to offer How to do it Tomorrow Your choice Go with Tietgen Go to Bulgaria First thing Monday morning: We will perform a due diligence to decide between the two options Acquisition Joint venture Our immediate recommendation Joint venture with existing partner = choice

19. Where to go What to offer How to do it Tomorrow Financial assumptions Assumptions • CRM revenues: Low growth 5–6% • BPO revenues: High Growth 20-30% • Productivity: Parameter adm expenses/revenues • CRM adm exp/rev: Will fall with 2-3% points • BPO adm exp/rev: Will fall with 4-6% points

20. Where to go What to offer How to do it Tomorrow Financial effects Best case: 16.24% Likely case: 12.90% 8.96% Worst case: 8.60%

21. Where to go What to offer How to do it Tomorrow Key Performance Indicators Establish joint venture K1 Ensure high quality K2 Research in new markets and opportunities K3 Increase brand awareness K4 Reaching market goal in European BPO K5

22. Where to go What to offer How to do it Tomorrow Key Performance Indicators - Timeline When to measure High K1 K2 K2 K2 K2 K2 Emphasis K5 K3 K4 Low Mid/2007 Mid/2008 Mid/2009 End/2007 End/2008 End/2009

23. Where to go What to offer How to do it Tomorrow Risk Go with Tietgen Go to Bulgaria Risk with Tietgen = 0 Acquire Joint venture Note: Macro-risk is compared to the 3rd sorting of countries Total risk Acquisition (?+3.2) = ? Joint venture (2+3) = 5 1 = low, 5 = high = choice

24. The vCustomer winning formula Bulgaria will be your launch pad for becoming the market leader of BPO within travel, hospitality, & retailing in Europe.

25. Q&A Q&A Where What How Situation Offer Finance Countries Develop portfolio KPI Markets Entering Bulgaria Risk Miscellaneous

26. Q&A – Situation Q&A Where What How Situation Offer Finance Countries Develop portfolio KPI Markets Entering Bulgaria Risk Miscellaneous Presentation Backup Services today Competitors New industries

27. Q&A – Countries Q&A Where What How Situation Offer Finance Countries Develop portfolio KPI Markets Entering Bulgaria Risk Miscellaneous Presentation Backup Over 40 Not China Top five

28. Q&A – Markets Q&A Where What How Situation Offer Finance Countries Develop portfolio KPI Markets Entering Bulgaria Risk Miscellaneous Presentation Backup Client market Client market detail Languages Competitors BPO definition

29. Q&A – Offer Q&A Where What How Situation Offer Finance Countries Develop portfolio KPI Markets Entering Bulgaria Risk Miscellaneous Presentation Backup What can TC Tietgen

30. Q&A – Develop portfolio Q&A Where What How Situation Offer Finance Countries Develop portfolio KPI Markets Entering Bulgaria Risk Miscellaneous Presentation Backup Develop Tietgen Horz vs. Vert

31. Q&A – Entering Bulgaria Q&A Where What How Situation Offer Finance Countries Develop portfolio KPI Markets Entering Bulgaria Risk Miscellaneous Presentation Backup Options Pros vs. Cons Choice Not China Bulgarian partner

32. Q&A – Finance Q&A Where What How Situation Offer Finance Countries Develop portfolio KPI Markets Entering Bulgaria Risk Miscellaneous Presentation Backup Assumptions Assumptions in detail Effects

33. Q&A – KPI Q&A Where What How Situation Offer Finance Countries Develop portfolio KPI Markets Entering Bulgaria Risk Miscellaneous Presentation Backup List KPI detail Timeline

34. Q&A – Risk Q&A Where What How Situation Offer Finance Countries Develop portfolio KPI Markets Entering Bulgaria Risk Miscellaneous Presentation Backup Risk

35. Q&A – Miscellaneous Q&A Where What How Situation Offer Finance Countries Develop portfolio KPI Markets Entering Bulgaria Risk Miscellaneous Backup Human factor Marketing Service

36. Key Performance Indicators

37. Assumptions in Detail Growth CRM: The market has been fairly exploited and growth has slowed: Hence Low growth 5 – 6% (Bulgaria inflation 4,1%) BPO:The Offshoring market is expected to grow at 20 - 25%. As CRM growth is assumed insignificant it is especially BPO- offshoring that will grow at this rate. Futhermore we plan to enter the European market where customers pay a premium: Hence High Growth 20-30% Productivity For productivity we use Adm. expenses/revenues as a parameter. Adm. expenses are considered mostly reliant on labour costs The initial ratios (2007) are estimated using peers within CRM and BPO. By moving to low wage country Bulgaria we expect the productivity to rise and hence the parameter to decline: In CRM: Will fall with 2-3% points. In BPO: Will fall with 4-6% points. This decline is catalysed as more and more labour/total labour is moved to Bulgaria. The decline will also rely on the degree of BPO-automation. This will eventually stagnate -> European union will most probably align wages over time as the country matures.

38. Competitors - % of firms by region

39. Competitors – Revenue group vs. offshore firms

40. Competitors – East EU offshore firm distribution

41. Bulgaria pros and cons

42. 3 reasons not to go to China • Lots and lots of red-tape and government intervention. • Poor ICT-infrastructure. Most importantly: • You believe the cultural differences to differ too much from you.

43. Finding your clients market • Europe: • - Austria • - France • Germany • - Ireland • - Italy • - Spain • Switzerland • United Kingdom • International • Argentina • - Australia • Canada • India • Mexico • New Zealand • South Africa • USA • Venezuela Regions Factors Retailing Travel & Hospitality Total consumption Languages Source: Euromonitor

44. Retailing BPO CRM

45. Technology BPO CRM

46. Telecom

47. Travel & Hospitality

48. Tietgen – A Legacy of Growth Analysis Based on quantitative and qualitative methods with a high focus on thought through and practical implications centered around Value-driven profitability. Delivery Written report and/ or presentation. Price policy Project driven. Recent clients Biosonic, Aldi, Brightcove.com.

49. Why you should go vertical

50. The Human Factor? ”Most clients are trying to eliminate the human factor altogether” – S. Kumar. V as in virtual = transferable and measurable, yet still indispensable The back office worker is a cost – The knowledge worker is an asset => All firms are trying to eliminate cost and increase assets.