One, Customer, Easy CALL CENTER GROUP Global Call Centers Is the World Flat? What does outsourcing mean for me? Can we compete in a global economy?

One, Customer, Easy CALL CENTER GROUP

Global Call Centers

Is the World Flat?

What does outsourcing mean for me?

Can we compete in a global economy?


Global Call Centers

Sharon Pettigrew

Principal

Call Center Group

March 21, 2006Women in Telecommunications

One, Customer, Easy

CALL CENTER GROUP© Call Center Group 2006.

Agenda

Market trends and drivers for global contact centers

Technology trends driving innovative services

Guidelines for Successful Outsourcing

Emerging Trends in Contact Centers & Outsourcing

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The World is FlatPEOPLE, PROCESS & TECHNOLOGYPEOPLE, PROCESS & TECHNOLOGY

CALL CENTER BUILDING BLOCKS

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Answer these questions:

Why are call centers changing so quickly?

What is outsourcing?Why do companies employ this

strategy?What technology trends are there

with outsourcing?What is the future ? - statistics on

trends, cost savings, efficiency

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Trends in Contact Centers

PEOPLE Outsourcing Off-Shore Centers Intelligent Routing Customer Value Based Service Integrated View of Customer throughout

lifecycle

PROCESS Multi-Channel Services Customer Self Service Options

TECHNOLOGY Customer – 360 degree view Seamless Integration is Goal Collaboration & “One Customer” Views

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Call Centers Contact Centers

Customer Requirements Expand

MULTICHANNEL: Face to Face, Phone, Email, Web, Chat

INTELLIGENT: Knowledgebase, Search Engines, Intelligent Autobots

INDIVIDUALIZED: Customer 360 degree view, History

ANY TIME, ANYWHERE: 24/7 Access GLOBAL: Follow the Sun Customer

Service

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TERMINOLOGY

Outsourced – Services provided by external partner specializing in business process outsourcingOff-shoreOff-shore – Services provided in another country, often India, China, Malaysia, Eastern EuropeNear-shoreNear-shore – Services provided in a location which is 2-3 hour plane ride from corporate office often Latin America for US companiesHome Sourced/Remote Agents – Home based workers connected via high speed data links for voice and data transmissionCRM – Customer Relationship Management - Software and process for managing the customer relationship throughout the lifecycle

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Core components of contact centers

Source: December 12, 2005, Tech Choices “The Forrester Wave™: Multichannel Contact Center Outsourcers: Q4, 2005”

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TRENDSTRENDS – Multi-channel support emerges as important criteria

Traditional telephone support dominates today but customer behavior is changing

Customers now demand cross-channel support

Integrated support required for online and speech-enabled IVR interactions

Lower cost channels offer financially attractive option to companies with large contact centers

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Source: December 12, 2005, Tech Choices “The Forrester Wave™: Multichannel Contact Center Outsourcers: Q4, 2005”

Multichannel customer support options

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Contact Center Core Services

Types of transactions supported: Range of transactions supported

Reporting and metrics: Supports clients with real-time access to metrics across a comprehensive set of reports

Process improvements: Internal process guidelines and adherence to industry quality processes

Quality monitoring and workforce management: Use of commercial applications with internal team dedicated to quality performance

Agent and supervisor training: Continuous training and advancement opportunities

Key

Perf

orm

ance

Key

Perf

orm

ance

Indi

cato

rs

Indi

cato

rs

One, Customer, Easy


Multichannel support includes eService

CSR collaborationCSR collaboration: Online support for chat, co-browse, and shared screens

Email support: Supports multiple types of email interactions with full integration to agent desktop

IVR support/speech recognition: Advanced capabilities to support speech-solutions in addition to DTMF

Offline support: Support for paper, forms, fax, fulfillment

CSR desktop integration: Agents view an fully integrated 360 degree view of customers

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Technology enables advanced services CRM integration

Flexible integration with leading vendors’ CRM applications

CTI support Ability to support client preferences across

major CTI platforms Outbound notification

Support of voice, text, SMS messaging System scalability

Largest current customer supported Survivability & Security

Comprehensive business continuity planning and redundancy


GLOBAL CALL CENTERS

WHY IS IT SUCH A HOT TOPIC?

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THE WORLD IS FLAT 10 FLATTENERS

• Walls Down, Windows Up

• Netscape IPO• Work Flow

Software• Open Sourcing• Outsourcing

• Offshoring• Supply Chaining• Insourcing• Informing • The Steroids

** Reference: The World is Flat by Thomas Friedman, Chapter Two

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Offshore Best Practices

Go offshore for the right reasons.

Source: The future of outsourcing, Business Week, 1/31/06.

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Rules for Success

Choose your model carefully.

Get your people on board.


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Rules for Success

Be prepared to invest time and effort.

Treat your partners like equals.


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Case Studies – Different Solutions

Jet Blue – home sourcing in Utah Agents are all home based Work 25 hours/week – 30% increase in productivity(28% of firms use remote agents, although 61%

could)

Dell - Tech Support – ebb and flow – off shore Dell pulls back enterprise support, leaves consumer Announces doubling positions in India to 20,000

IndyMac Bancorp – financial services aggressive offshore outsourcing strategy Jumped from 22nd largest US mortgage issuer to #

9 in 3 years 18% return on equity outpaces rivals

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GLOBAL SNAPSHOT: Outsourcing trends Outsourcing contact centers continue strong

growth US and UK major markets for using

outsourcers Outsourcing represents approximately 15% of

total number of contact centers Sites expand and include on-shore, near-shore,

and offshore locations Many new vendors entering market resulting

in highly fragmented market with hundreds of vendors across the globe

Tier one vendors capture large percentage of market revenues while many smaller vendors expected to consolidate or be acquired

Source: Forrester Research

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WHY OUTSOURCE?Market drivers for outsourcing contact centers Lower operation costs Manage customers using leading edge

technology Avoid capital expense for building and

maintaining in house Deliver greater efficiency Support traffic spikes and seasonal traffic Improve revenue opportunities with upsell

and cross-sell options

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WHY NOT OUTSOURCE?WHY NOT OUTSOURCE? Barriers to outsourcing

Lose control of customer management Privacy and security issues Risk of lower customer satisfaction Concerns regarding poorer quality services Contact centers considered core internal

business processes Vendors lack of specific industry experience Cultural and language issues Complex technical requirements, no

expertise

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Hot Players - Offshore Outsourcing World

BUSINESS SERVICES SOFTWARE DEVELOPMENT

CALL CENTERS

1. Hewitt Associates US 1. Tata Consultancy India 1. Convergys US

2. ACS US 2. Infosys Technologies India

2. Wipro India

3. Accenture US 3. Wipro India 3. ICICI OneSource India

4. IBM US 4. Accenture US 4. ClientLogic US

5. EDS US 5. IBM US 5. 24/7 Customer India

6. Hewlett-Packard US 6. Cognizant Technology Solutions US

6. SR Teleperformance France

7. Wipro India 7. Satyam India 7. eTelecare International US

8. HCL Technologies India 8. Patni Computer Systems India

8. SITEL US

9. Tata Consultancy India 9. EDS US 9. Teletech US

10. WNS Global Services India

10. CSC US 10. CustomerCorp US

Data: Gartner Inc. Ranking based on frequency of queries from Gartner’s 10,000 global clients.

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Outsourcing Goes Global

Data: Gartner. A.T. Kearney, Nasscom, BusinessWeek.

REGION

CENTRAL & EASTERN EUROPE

CHINA & SOUTHEAST ASIA

LATIN AMERICA & CARIBBEAN

MIDDLE EAST & AFRICA

Market Size $3.3 Billion $3.1 Billion $2.9 Billion $425 Million

Top-Ranked Countries

Czech Republic, Bulgaria, Slovakia, Poland, Hungary

China, Malaysia, Philippines, Singapore, Thailand

Chile, Brazil, Mexico, Costa Rica, Argentina

Egypt, Jordan, United Arab Emirates, Ghana, Tunisia

Up-and-Comers

Romania, Russia, Ukraine, Belarus

Indonesia, Vietnam, Sri Lanka

Jamaica, Panama, Nicaragua, Colombia

South Aftrica, Israel, Turkey, Morocco

Emerging Local Providers

Luxoft(Russia), EPAM Systems (Belarus), Softline (Ukraine), DataArt (Russia)

NCS (Singapore), Bluem, Neusoft Group, Boraden Gate Systems (China)

Softtek (Mexico), Neoris (Mexico), Politec (Brazil), DBAccess (Venezuela)

Xceed (Egypt), Ness Technologies (Israel), Jeraisy Group (Saudi Arabia)

India still dominates services offshoring, with 60% of total industry revenues.India still dominates services offshoring, with 60% of total industry revenues.

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Offshoring – Global Competition

Every morning in Africa, a gazelle wakes up.

It knows that it must run faster than the fastest lion or it will be killed.

Every morning a lion wakes up.

It knows that it must outrun the slowest gazelle or it will starve to death.

It doesn’t matter whether you are a lion or a gazelle.

When the sun comes up, you better start running.

(Traditional African Proverb)

“If Americans and Europeans want to benefit from the flattening of the world and the interconnecting of all the markets and knowledge centers, they will have to run at least as fast as the fastest lion.”

Source: The World is Flat, Thomas S. Friedman

Source: The World is Flat, Thomas Friedman.


Thank you

Sharon Pettigrew

CALL CENTER GROUP

[email protected]

650-579-1298

One, Customer, Easy


Sources

• Business Week, Feature Article:The future of outsourcing, 1/31/06.

• Forrester Research, Tech Choices “The Forrester Wave™: Multichannel Contact Center – Outsourcers Q4”, December 12, 2005.

• Friedman, Thomas L., The World is Flat, A Brief History of the Twenty-first Century, Farrar, Straus & Giroux, © April 2005.

• Gartner Inc. Ranking based on frequency of queries from Gartner’s 10,000 global clients.

www.247customer.com29

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BUSINESS IS ABOUT DOING THINGS DIFFERENTLY.

Global Customer Operations Panel

Kathy Juve

VP-Sales, 24/7 Customer

www.247customer.comConfidential © 24/7 Customer Inc. 2006 | 30

Agenda

• Offshore outsourcing- key facts

• Multi-shoring

• What differentiates 24/7 Customer as an outsource partner?

• Best Practices


Offshore outsourcing industry: key facts

• Indian BPO industry(05-06): $6.3 B • Number people employed in BPO: 409,000• No of professionals in customer care: 150,000 • Total service providers in India: 500+• Global companies outsourcing to India: 350+• Number of US captives set up in India: 40

UK USA Others TotalFinancial services 26 65 3 94Services 15 67 2 84Telecom 25 17 4 46Insurance 8 20 1 29Airlines 1 4 20 25Technology 2 22 1 25Retail 2 19 1 22

Manufacturing 0 11 2 13Healthcare 3 9 0 12Travel 0 5 0 5Total 82 239 34 355

BPO FY 2004 FY 2005 FY 2006EIndustry revenues $3.2 Bn $ 4.6 Bn $ 6.3 B

People 216,000 316,000 409,000

Y-o-Y growth: 60%

Over 350 companies are outsourcing to offshore


Offshore: Business Drivers for Change

Onshore presence and control

Perception on what can be offshored

Lack of executive sponsorship

Competitive pressures

Cost reduction

Improvement in service levels

2002BPO service providers-” Same for

less”

2007Service delivery as a strategic asset and a competitive advantage

Scalability

Process maturity of offshore providers


Phase 1 – Cost reduction

Key practices

Sample key metrics

•Cost of application•Cost of rejection•Cost per sale•Cost to serve•Cost of performance•Impact of attrition on program•Quote to conversion

Original cost

base in the US

Cost savings

Additi-onal

telecom costs

Managemnt costs

Net offshore

cost

Economies of scale

Process improve

ment benefits

New cost base

Direct savings- 40% to 50%Additional savings 15%-25%

Performance

benefits

•Maturity of process and clear back end metrics

•Driving vendor performance through well defined metrics and periodic tracking of costs

• Defining cost goals for stage 2 benefits

•Helping vendor meet their operational goals and challenges. e.g.- contribution towards rewards/ incentivisation etc


Phase 2 – Business impact

Impact of performance on business

•From operating metrics to business value•Business value of competence or Centre of Excellence•Impact of business value by vendor to enhance total performance

Sample key metrics

•Value per application•Business impact on customer satisfaction

•Total Value of Partner

Highlights

•BPO service providers are able to show positive impact of performance on business value


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Global delivery


Multi-shore: the era of global sourcing

• Offshore, onshore, nearshore, multishore, anyshore!

• “Multi-shore in BPO involves delivering a suite of service offerings leveraging a low risk mix of onshore, nearshore and offshore resources in multiple locations and distributing them globally”

Benefits

• Risk mitigation against political instabilities & natural calamities

• Enables faster time-to-market

• Access to specific needs in terms of capabilities/ language


Global Sourcing Maturity

Ma

turi

ty

Level 5

Level 4

Level 3

Level 2

Level 1

Ready Efficient Effective Optimized Transformational

Ris

k

Multiple stages in global sourcingCost

advantagePerformance enhancement

Performance optimization

Knowledge leverage

Productization

Value mapping


Key success factors in global delivery

1. Process standardization

2. Multi process integration across geographies

3. Creating centers of excellence by geography

4. Standardization of human capital management

5. Global account management framework


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24/7 CustomerDelivering effective business performance


Corporate fact sheet

• Who we are An “Integrated Customer Lifecycle Management” company with headquarters in

Los Gatos, CA, providing call center and back office services

• Our business 6,000 people

Over 8 million transactions per month

$1.5 billion in transaction value managed for our customers

Funded by Sequoia Capital

Strong presence in BFSI, Technology, Retail, Logistics industry

Over 15 marquee clients

• Our performance #1 vendor in performance across 70% of all programs

#1 or #2 vendor in performance across 80% of all programs


Industry recognition

Rated among Top 5 hot players in the Offshore Outsourcing World - Business

Week, January 06

Recipient of the IT Leadership Award instituted by IT people in association

with NDTV and DNA- Jan 06

Ranked amongst the Top 5 Contact Centers worldwide - neoIT-Jan 06

24/7 Customer listed in the Leaders category of Global 100 of IAOP

Featured in Pulitzer award winning author Tom Friedman’s “World is Flat”

Awarded the “Emerging Star” by TiEcon- May 05

Featured in “Results” a book on organizational DNA

Among the top 50 best managed companies by the Black book of

Outsourcing-Mar 05

A NASSCOM Top 15 company


Integrated Customer Lifecycle Management Services

• Integrates the touch points in the

entire interaction lifecycle

• Provide a holistic view into end

customer management

• Provides customer and brand

behavior insights

• Improves efficiency and effectiveness

of customer management at reduced

costs

A powerful, integrated model that addresses all the

touch points in the entire interaction lifecycle while

also providing insights in terms of customer and brand

behavior

A powerful, integrated model that addresses all the

touch points in the entire interaction lifecycle while

also providing insights in terms of customer and brand

behavior


What differentiates 24/7 Customer?

• Based on mathematical models that can create predictability, scalability, repeatability and sustainability of business performance

• Based on Toyota Production System

• Delivers predictability of performance across processes

• 10% outperformance

Innovation labs

Science behind Performance

24/7 Production SystemEff

ectiv

enes

s

Efficiency

• Improvement in business performance of customer lifecycle processes

24/7 Customer consistently enhances performance of business processes across the end consumer lifecycle thereby creating a sustainable competitive advantage to its customers


Our outperformance highlights

Customer Geography Service Ranking across centers*

Top 5 credit card company US Customer acquisition No. 1

Top 5 online retail company US Chat/ email support No. 1

UK’s no 1 insurance company UK, Canada Customer Lifecycle Management No. 1

Largest independent credit card issuer in the world

US, UK and Canada Customer acquisition No. 1

Global top 3 freight and transportation company

UK,Ireland Customer service No. 1

Global top 3 hardware company US Technical support No. 1

Top 3 US Bank US Customer acquisition No. 1

Global top 3 Merchant services provider

US Settlements support/ Technical support

No. 1

Top 10 UK insurance company UK Customer acquisition No. 1

A diversified business group into travel, leisure, hospitality

UK Customer support, back office services, finance and accounting

No. 1

Global Top 3 ATM company US Technical support No. 1

24/7 Customer is the no. 1 service provider for over 70% of all client

engagements

24/7 Customer is the no. 1 service provider for over 70% of all client

engagements

*Includes in house and outsourced centers


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Best Practices


Some best practices in contact centers

1. Knowledge managementCreating an organization wide knowledge repository that reduces rework, defects and improves

efficiency

2. Business Process ImprovementJoint initiatives with customers using Six Sigma and lean techniques

3. Transaction analyticsCreation of powerful insights into end customer behavior using advanced statistical analytical

models

4. Platform for innovationCreation and testing of business process transformation using innovation as a key driver


The Payback on Proactive Customer Service

A simple, conservative business case

Strategic drivers of Proactive Customer Service

• Improve Customer Satisfaction, Loyalty, Revenue• Increase strength/reputation of brand• Increase repeat business and cross-sales• Increase Quality of Service (wait times, abandon rate) • Improve Employee Morale• Reduce returns due to poor customer service• Reduce cost of sales via customer referrals • Reduce Customer Care overhead• Reduce Training Costs• Reduce Turnover, hiring/on-boarding Costs

Great Service drives repeat sales

Situation Re-Purchase Probability

Product with no problems 76%

Product with problems and no recovery mechanism

32%

Product with problems with a WOW recovery system

89%

Source: Purdue University Center for Customer-Driven Quality, Dr. J. Anton

Financial/Tactical drivers of Proactive Customer Service

• Reduced Call and eMail Volume Large amount of service inquiries are repetitive Proactive Customer Service reduces call volume 10%-

30% and eMail volume by 50%-70%

• Increase Agent Productivity (email and calls) Increase agent Calls/eMails per day Decrease Call/eMail Handle Time

• Reduce KM maintenance cost The “repetitive questions” are constantly changing The largest TCO item: Maintaining the KM’s

Maintenance is the largest TCO component of a Custom Support KM Repository

Maintenance47%

Content Development

28%

Hardware2%

Software10%

Integration13%

Source:Gartner March 2003, “Customer Self-Service: Reducing Customer Maintenance Costs”, Esteban Kolsky.

Proactive Customer Service Reduces Maintenance Costs

• Best Practices A – C• Customer Support index• SmartAssistant • SmartSensing• Automate updating process• Multi-tenant infrastructure:

Ease to get started, use, and support

Maintenance is ~50% of the costof a customer service KM Repository

53

Results of Best Practices

54

Customer Success Index (CSI)

• CSI Methodology – Identifies key variables

that directly impact the value of your solution

• Monitors Top Vital Signs– Tune-Ups– Software Version– Site Traffic– Features Enabled– Integrations

• Dynamic– Real-time information

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On Demand Delivery

Eliminates over 80% of ownership

costs

Deployment up to 5 times faster

On Demand In-House

One, Customer, Easy CALL CENTER GROUP Global Call Centers Is the World Flat? What does outsourcing mean for me? Can we compete in a global economy?

Documents

center group global

customer service slide

customer behavior

centers customer requirements

customer views slide

center building blocks

contact centers people

lifecycle slide