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Creating a Global Footprint vCustomer Company Expansion Outlook

Creating a Global Footprint vCustomer Company Expansion Outlook. Presented By: Nichelle Joyner David Manaway John White Deanna Lowe. Presentation Agenda. Executive Summary V Customer Company Insight Industry Overview BPO Overview CRM Overview Financials Situation Recommendations

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Creating a Global Footprint vCustomer Company Expansion Outlook

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  1. Creating a Global Footprint vCustomer Company Expansion Outlook Presented By: Nichelle Joyner David Manaway John White Deanna Lowe

  2. Presentation Agenda • Executive Summary • V Customer Company Insight • Industry Overview • BPO Overview • CRM Overview • Financials • Situation • Recommendations • Conclusions to Be Drawn • Appendix

  3. vCustomer Company Insight

  4. vCustomer Mission VCustomer Company Insight, Industry Overview, BPO Overview, CRM Overview, Financials, Situation Recommendations, Conclusions to Be Drawn Appendix Our mission statement is:Provide a new paradigm for customer support using Best-in-Class • Technology • People • Service Solutions vCustomer is Focused on Best in Class Technology, People, & Service Solutions

  5. vCustomer Values VCustomer Company Insight, Industry Overview, BPO Overview, CRM Overview, Financials, Situation Recommendations, Conclusions to Be Drawn Appendix PartnershipGrowth through shared goals Quality Continuous Process Improvement ExcellenceRecognizing and rewarding employee excellence IntegrityDoing the right thing Respect Respect Dignity at every level in the organization Exceeding Customer ExpectationsConsistently encouraging proactive behavior vCustomer is Built on a Five Prong Value System

  6. Company Background VCustomer Company Insight, Industry Overview, BPO Overview, CRM Overview, Financials, Situation Recommendations, Conclusions to Be Drawn Appendix • Situation-vCustomer currently operates out of India, with CRM being 85% of operation and BPO AT 15% of operations • Complication- vCustomer has not reached its full potential as far as customers and industries it can reach • Key Questions- • Where- Where should vCustomer establish service centers? • How- How should vCustomer go about entering into the country(s)? • What- Additional consulting services could our firm offer to vCustomer what information is needed to do this and provide these services vCustomer case background information

  7. Key Milestones Timeline VCustomer Company Insight, Industry Overview, BPO Overview, CRM Overview, Financials, Situation Recommendations, Conclusions to Be Drawn Appendix September 2004: Fifth facility goes live in New Delhi January 2000: First client signed for email support 50 startup employees March 2002: Second processing center goes live in New Delhi May 2003: Touches the 2000 employee mark December 2000: Voice support enabled from V Customer India June 1999: vCustomer incorporated with funding from founders November 2003: Touches the 3000 employee mark September 2002: Touches the 1000 employee mark June 2001: First million dollar quarter January 2003: Third round of funding from WestRiver Capital October 1999: First India processing center set up April 2004: Fourth processing center in Pune goes live October 2003: Third processing center goes live in New Delhi, total capacity reaches 2300 workstations June 2002: First million dollar month June 2000: Second round of funding in which Warburg Pincus invests

  8. SWOT Analysis VCustomer Company Insight, Industry Overview, BPO Overview, CRM Overview, Financials, Situation Recommendations, Conclusions to Be Drawn Appendix • Close to 100% customer retention • Little to no Debt • Strong top management • Ability to develop customized • technology solutions • Size of the company makes it • difficult to compete with major • players in the industry • Training employees in a • multilingual capacity is costly • Not sufficiently globalized Strengths Weaknesses • New country/industry expansion • Opportunity to offer more services to • clients with more multi lingual agents • Opportunity and ability to acquire • another company if needed • Loss of profit margin if remaining in • India • Forced exit by leading players in the • industry (i.e. Wipro, IBM Global • services…) • Threat of acquisition by larger more • powerful companies Threats Opportunities vCustomer Company SWOT

  9. Industry Overview

  10. IT equipment Suppliers VCustomerCompany Insight, Industry Overview, BPO Overview, CRM Overview, Financials, Situation Recommendations, Conclusions to Be Drawn Appendix

  11. Value vs. Volume VCustomerCompany Insight, Industry Overview, BPO Overview, CRM Overview, Financials, Situation Recommendations, Conclusions to Be Drawn Appendix Market Value Forecast • In 2008, the market is forecast to have a value of $52 billion, an increase of 29.6% since 2003. Market Volume Forecast • In 2008, the market is forecast to have a volume of 6 million agent positions, an increase of 19.9% since 2003. • The US dominates the market with a share of 50.3%. A Promising Future For Market Value/Volume

  12. Challenges Rival companies and New entrants who pose a risk to vC in competition for marketshare Neutralities IT equipment suppliers who provide products to the entire industry Opportunities Buyers who need IT outsourcing capabilities to add more efficiency to their perspective companies Solution PositionvC as a leader in outsourcing solutions in comparison to competing and existing companies Acknowledge The IT costs is a necessary measure to insure sufficiency of office operations Benefit Continuing need for Outsourcing in many industries which will result in sustainable growth and stability for vCustomer Industry Analysis Conclusion VCustomerCompany Insight, Industry Overview, BPO Overview, CRM Overview, Financials, Situation Recommendations, Conclusions to Be Drawn Appendix Industry Outlook vCustomer Position

  13. BPO Overview

  14. SOUTH AFRICA Sound infrastructure and the cheapest electricity prices in the world Creation of 100,000 jobs by 2009, 25,000 of the jobs would be directly involved in BPO Time zone, which falls comfortably within European time zones INDIA Insufficient power (energy) support Rising wages causing increase in operating expenses 24 Hour support systems needed to meet needs of clients BPO South Africa vs. India

  15. CRM Overview

  16. South Africa Off shore Agents Positions 1400 Attrition 6% Call center growth 13% by 2008 Currently 494 call centers 2008 939 call centers India Off shore Agents Positions 6300 Attrition 60-70% Call center grew 37% to $2 billion in 2006 25 CTI Call Centers, 300-500 non CTI Call Centers 2008, 43 CTI Call, 510-850 non CTI Call Centers South Africa VS. India VCustomerCompany Insight, Industry Overview, BPO Overview, CRM Overview, Financials, Situation Recommendations, Conclusions to Be Drawn Appendix

  17. Financials

  18. South Africa Business Freedom 70% Corruption Freedom 45% Trade Freedom 68.8% Labor Freedom 58.5% Fiscal Freedom 79.3% Gov’t Freedom 79.3% Monetary Freedom 78.8% Investment Freedom 50% Financial Freedom 60% India Business Freedom 49.6% Corruption Freedom 29% Trade Freedom 51.2% Labor Freedom 55.1% Fiscal Freedom 84.8% Government Freedom 89% Monetary Freedom 77.2% Investment Freedom 40% Financial Freedom 30% Economic Freedom VCustomerCompany Insight, Industry Overview, BPO Overview, CRM Overview, Financials, Situation Recommendations, Conclusions to Be Drawn Appendix South Africa out Weighs India in Many Key Areas

  19. Market Value Forecast vCustomer can benefit from market growth VCustomerCompany Insight, Industry Overview, BPO Overview, CRM Overview, Financials, Situation Recommendations, Conclusions to Be Drawn Appendix Global Call Center Industry Analysis

  20. Incentives in South Africa Company Employment Company Employment Strategic Choice People 200 to 499, Investment expenditure of at least $10,277 per seat Grant qualification $5,138 to $6,194 People 500 + Investment expenditure of at least $12,388per seat Grant qualification Up to $7,200 GOOD BETTER VCustomerCompany Insight, Industry Overview, BPO Overview, CRM Overview, Financials, Situation Recommendations, Conclusions to Be Drawn Appendix

  21. Set Up Cost • Plant, Equipment (size 35,000-45,000sq. Ft.) $1,238,888 • Wage Expense ( plus telephony cost) 649 dollars x 1000 • Security Expense 25,000 per month • Insurance Expense 15,000 per month • Corporate Tax 30% of revenue • Agents 1,000 VCustomerCompany Insight, Industry Overview, BPO Overview, CRM Overview, Financials, Situation Recommendations, Conclusions to Be Drawn Appendix

  22. Revenue Forecast Millions 2008 Increase reflects opening of new facilities in South Africa Years VCustomerCompany Insight, Industry Overview, BPO Overview, CRM Overview, Financials, Situation Recommendations, Conclusions to Be Drawn Appendix

  23. Financial Conclusions Investing in South Africa would increase the overall revenue of vCustomer and would create a steady line of capital to benefit further expansion EMPLOYMENT STABILITY INCREASE WAR CHEST Government plans to create 100,000 new jobs linked to call centers Risk factor of investment in South Africa is LOW LOW ENTRANCE BARRIERS Deregulation in telecom industry would bring down cost of lines VCustomerCompany Insight, Industry Overview, BPO Overview, CRM Overview, Financials, Situation Recommendations, Conclusions to Be Drawn Appendix

  24. Financial Future Merits In 2006 State of the Nation Address President Thabo Mbeki identified the call center industry as a government strategy to increase the country economic growth rate and boost the economy. VCustomerCompany Insight, Industry Overview, BPO Overview, CRM Overview, Financials, Situation Recommendations, Conclusions to Be Drawn Appendix

  25. Situation&Recommendations

  26. South Africa Map vCustomer’s Promise land

  27. Situational Review VCustomerCompany Insight, Industry Overview, BPO Overview, CRM Overview, Financials, Situation Recommendations, Conclusions to Be Drawn Appendix Current Situation Proposed Situation • Observations • High attrition rate 60% • Saturated Service Market • Stronger accent problematic to customers • Observations • Low attrition rate 6% • According to Datamonitor, by 2008 South Africa will be ahead of India with quality and service • South Africa has pool of multilingual agents servicing call agents South African Call Centers are Clearly More Beneficial Than Indian Call Centers

  28. Benchmarking Best in Class Practices Our benchmarking approach created three strategic recommendations to establish a more efficient reverse service location Benchmarking Approach Research CRM/BPO Best in Class Practices Defined V Customer Current State Operations Tested Best in Class Practices Applicability Defined Strategic Recommendations • Benchmarked industry best practices • Best in class practices were obtained from: • Public sector case studies • Public private sector case studies • Public industry specific trend articles • Reviewed all identified best in class practices within research phase and determined their applicability to the • V Customers specific business problem Definition • Reviewed business problem and identified overall case situation, complication, key question, and key messages • Further researched and reviewed the business problem to further detail V Customers current state situation (e.g. process flow model) • Defined recommendations based on best in class practices that were identified as having substantial impact and implementation success Our Practices will be Based Upon Best in Class Practices VCustomerCompany Insight, Industry Overview, BPO Overview, CRM Overview, Financials, Situation Recommendations, Conclusions to Be Drawn Appendix

  29. Implementation Plan VCustomerCompany Insight, Industry Overview, BPO Overview, CRM Overview, Financials, Situation Recommendations, Conclusions to Be Drawn Appendix Making The Shift

  30. Conclusions to Be Drawn

  31. What This All Means • Increasing value will allow vCustomer to reach its full operating potential • The industry is stable and optimal for company growth • Financial and Government Incentives will result in a low cost of entrance • Our recommendations and implementation plan will allow vCustomer to become and remain a leading competitor in vital markets

  32. Thank You For Your Time and Attention We Will Now Open The Floor To Any Questions

  33. Appendix

  34. vCustomer's Comprehensive Retail Services Portfolio VCustomerCompany Insight, Industry Overview, BPO Overview, CRM Overview, Financials, Situation Recommendations, Conclusions to Be Drawn Appendix

  35. vCustomer's telecom services portfolio VCustomerCompany Insight, Industry Overview, BPO Overview, CRM Overview, Financials, Situation Recommendations, Conclusions to Be Drawn Appendix

  36. vCustomer's technical services portfolio VCustomerCompany Insight, Industry Overview, BPO Overview, CRM Overview, Financials, Situation Recommendations, Conclusions to Be Drawn Appendix

  37. vCustomer's travel & hospitality services portfolio VCustomerCompany Insight, Industry Overview, BPO Overview, CRM Overview, Financials, Situation Recommendations, Conclusions to Be Drawn Appendix

  38. Five Force Analysis VCustomerCompany Insight, Industry Overview, BPO Overview, CRM Overview, Financials, Situation Recommendations, Conclusions to Be Drawn Appendix

  39. Business Analytics VCustomerCompany Insight, Industry Overview, BPO Overview, CRM Overview, Financials, Situation Recommendations, Conclusions to Be Drawn Appendix vCustomer’s ‘solutions’ approach ensures operational excellence through efficient real time responses focused on issues that impact customer satisfaction, through proactive monitoring and reporting. With operational systems which react to customers needs in real time. Which allows vcustomer capabilities such as: • Effective Resource Management • Analyzing and Validating Client Forecasts • More accuracy in scheduling shifts • Enabling better handling of Peak volumes

  40. Healthcare Insurance in the USA  (Oct. 2005) MARKET SIZEThe US market for health insurance has grown by 11.2% since 2003 to reach a value of US$200.7 billion in 2004.Over the five-year review period, premium sales increased by 58.5%.Growth slowed somewhat in 2004 after several years of steadily increasing double-digit rates, but health insurance costs, like other health care expenses, continue to outpace inflation and other general economic indicators.The high cost of brand-name prescription drugs, technological advancement, and generally unhealthy habits across most of the population all contribute to higher health costs, which in turn lead insurers to raise premiums in order to remain profitable.The premiums being paid for health insurance are rising as 70.9% of insured Americans, who have employment-based insurance are being required to bear a greater proportion of premiums as employers find themselves unable to keep up with such rapidly growing health benefit costs.There is currently no consensus on how to deal with health costs, so leading insurers see an opportunity to take the initiative in looking for VCustomerCompany Insight, Industry Overview, BPO Overview, CRM Overview, Financials, Situation Recommendations, Conclusions to Be Drawn Appendix

  41. Emerging Outsourcing Players VCustomerCompany Insight, Industry Overview, BPO Overview, CRM Overview, Financials, Situation Recommendations, Conclusions to Be Drawn Appendix

  42. BPO Information

  43. India BPO VCustomerCompany Insight, Industry Overview, BPO Overview, CRM Overview, Financials, Situation Recommendations, Conclusions to Be Drawn Appendix • India’s BPO industry started with foreign “captives”, or subsidiary organizations that handled the respective parents’ in-house work. • Pioneers in BPO operations like GE, American Express, and British • Airways, arrived in India in the late 1990s. • For instance, GE’s Indian subsidiary, GECIS, handled administrative processing work for the parent firm’s financial businesses. • These companies were joined by some domestic call-center operations such as 24x7, EXL, Spectramind, Daksh, and vCustomer.3

  44. BPO South Africa VCustomerCompany Insight, Industry Overview, BPO Overview, CRM Overview, Financials, Situation Recommendations, Conclusions to Be Drawn Appendix Key factors • Time zone, which falls comfortably within European time zones • English-language capacity • South Africa produces 300,000 school leavers and 100,000 graduates a year • Low budget deficit • Sound infrastructure and the cheapest electricity prices in the world • Highly attractive lifestyle

  45. Scope of BPO Services VCustomerCompany Insight, Industry Overview, BPO Overview, CRM Overview, Financials, Situation Recommendations, Conclusions to Be Drawn Appendix

  46. Global Spending on IT and BPO Off shoring VCustomerCompany Insight, Industry Overvie. w, BPO Overview, CRM Overview, Financials, Situation Recommendations, Conclusions to Be Drawn Appendix MILLIONS YEARS

  47. BPO Conclusion In conclusion the BPO market in India is extremely saturated, and rising wages, and operating cost make it difficult to remain competitive. In order for vCustomer to expand and remain competitive we recommend that vCustomer relocate to the new BPO promise land which is South Africa.

  48. BPO South Africa Facts VCustomerCompany Insight, Industry Overview, BPO Overview, CRM Overview, Financials, Situation Recommendations, Conclusions to Be Drawn Appendix South African government's strategy • Raise economic growth to 6% and halve poverty and unemployment by 2014. • Deregulation and promotion of competition adding that a five-year, R30-billion investment • Creation of 100,000 jobs by 2009, 25,000 of the jobs would be directly involved in BPO

  49. South Africa BPO Industry VCustomerCompany Insight, Industry Overview, BPO Overview, CRM Overview, Financials, Situation Recommendations, Conclusions to Be Drawn Appendix South African government's strategy • South Africa's BPO industry employs 80,000 people, with, probably, less than 5,000 devoted to foreign businesses • The government will allocate one billion rand, or US$138 million, • To subsidize service-provider training for call center and other types of outsourcing work.

  50. Companies In South Africa VCustomerCompany Insight, Industry Overview, BPO Overview, CRM Overview, Financials, Situation Recommendations, Conclusions to Be Drawn Appendix • Other companies investing in the country include IBM - with 1,540 special technical support staff working in its South African integrated delivery centre, servicing 280 European companies including Boots. Shell is also setting up a captive support centre in the country to support its Benelux customers.

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