Opportunities for Brazil in the International Outsourcing Market Brazil Outsourcing 2008 February 26, 2008

Proprietary & Confidential. © 2008 Everest Global, Inc. 2 Everest is a global firm that helps leading companies capture value from services Value from services Service providers Service enablers Service recipients Everest provides Information (data and tools) Insight (research) Advice (consulting) Information (data and tools) Insight (research) Advice (consulting)

Proprietary & Confidential. © 2008 Everest Global, Inc. 3 Insurance companies Banks and financial services Travel and transportation Manufacturing & Retail Energy Our clients span across a wide variety of industries PARTIAL LIST Service Providers and Service Enablers Service Recipients

Proprietary & Confidential. © 2008 Everest Global, Inc. 4 The global offshoring market is growing at 30%+ annually ITO has becoming increasingly mainstream and continues to grow at ~30% annually BPO is becoming increasingly mainstream following the success of the offshore delivery model for IT services and is growing faster than the overall offshoring market ITO has becoming increasingly mainstream and continues to grow at ~30% annually BPO is becoming increasingly mainstream following the success of the offshore delivery model for IT services and is growing faster than the overall offshoring market Global sourcing market size US$ billion ~65% ~35% ~60% ~40% Information Technology Offshoring (ITO) market Business Process Offshoring (BPO) market

Proprietary & Confidential. © 2008 Everest Global, Inc. 5 Labor arbitrage continues to be a key driver for growth; other factors such as access to talent and business benefits have become increasingly important 2007 Change Drivers for offshoring Importance Sources:Everest experience; interviews with buyer organizations Business impact beyond cost savings is increasingly becoming important for buyers of BPO services Cost reduction due to labor arbitrage continues to be the dominant driver for BPO The importance of access to qualified talent as a driver for BPO has increased significantly in the last three years 2004 Reduce time to market Enhance capacity Improve productivity Improve service quality Access to talent Cost reduction Increased importance High Equal importance Low

Proprietary & Confidential. © 2008 Everest Global, Inc. 6 While Brazil has a small share of the market currently, it attracted significant attention in recent years Others 2 Canada Philippines India Latin America Business Process Offshoring market 2007; Percentage C&EE 1 Ireland 1Central and Eastern Europe 2Primarily includes Southeast Asian locations (e.g., Sri Lanka, Thailand) and African locations (e.g., Egypt, South Africa) Source:Everest Research Institute (2008) China-2% NOT EXHAUSTIVE 100% = US$26-29 billion New entrants in the market YearPlayersCountries 2006TCSBrazil IBMBrazil ACSBrazil GenpactMexico EvalueserveChile 2005AccentureBrazil TeleperformanceChile

Proprietary & Confidential. © 2008 Everest Global, Inc. 7 Three key factors provide Brazil an advantage as an outsourcing destination Source:Everest Research Institute (2008) CST ± 3 hrs Proximity and time-zone fit with North America provides significant advantage for functions that require real-time interaction Robust IT market, which provides a large skilled talent pool for IT functions Strong domestic market, which makes it attractive as a regional shared service hub for global companies Proximity and time-zone fit with North America provides significant advantage for functions that require real-time interaction Robust IT market, which provides a large skilled talent pool for IT functions Strong domestic market, which makes it attractive as a regional shared service hub for global companies

Proprietary & Confidential. © 2008 Everest Global, Inc. 8 Further, the labor pool available in key Brazilian cities is comparable to well-established outsourcing destinations Annual graduate pool estimates 1 by city 2006; 000’s 1Estimated based on assessment of total enrollments over past three years and the structure of the education system in each country Sources:Everest Research Institute analysis; Ministry of Education by country; Investment Promotion Agency by country Large labor pools that are comparable to Indian cities Can support large-scale operations for global players Large labor pools that are comparable to Indian cities Can support large-scale operations for global players

Proprietary & Confidential. © 2008 Everest Global, Inc. 9 However, with rapid currency appreciation providers will need to evolve their offerings to make them less dependent on labor arbitrage by “up-shifting” value proposition 1Center of Excellence Changing accountability Process Business Simple rulesJudgmentComplex rules COE 1 Dominant view of “value add” Changing capability/ distinctiveness Task Quality Standards Changing the type of work

Proprietary & Confidential. © 2008 Everest Global, Inc. 10 To illustrate the kind of opportunities for Brazil let us consider the rapid-growth area of Remote Infrastructure Management IMO market 2010; Percentage Infrastructure Management Outsourcing (IMO) US$ billion 100%= ~US$46 billion Traditional (onshore) Offshore 61% CAGR 7% CAGR Source: Everest Research Institute analysis 10% CAGR

Proprietary & Confidential. © 2008 Everest Global, Inc. 11 Capitalizing on these opportunities will require a phased approach to attract buyers and investors Source:Everest Research Institute (2007) Phase I: Create attractive investment environment to attract global companies Develop clear positioning Simplify operational set- up processes Financial Incentives to attract investors Address potential weaknesses and road- blocks Develop robust fact base to engage investors Increase supply of skilled labor pool Accelerate infrastructure development Government support towards ongoing growth Provide impetus for development of local support ecosystem Phase III: Address key enablers for future growth; focus on targeted growth areas Targeted marketing/branding Focused talent development Infrastructure enhancement Refined incentives Phase II: Build further momentum by de- bottlenecking growth Potentially most relevant given the current maturity

Proprietary & Confidential. © 2008 Everest Global, Inc. 12 To ensure success, government and industry need to focus on key initiatives and learn from the experiences of other countries Create a one-stop investment agency which provides potential investors with detailed fact-base, due-diligence support, and setup assistance Create focused “growth zones” which provide a combination of robust infrastructure and fiscal incentives to attract greater inward investment from outsourcing suppliers and captives Create a robust fact-base that provides a detailed, data- based view of capabilities, skills and potential for the Brazilian outsourcing and offshoring industry Undertake aggressive marketing to key investor groups through foreign offices and affiliates Czech Republic India Malaysia India Czech Republic Romania Example of initiativeExample of success

Proprietary & Confidential. © 2008 Everest Global, Inc. 13 Everest Group Consulting and Everest Research Institute Headquarters Two Galleria Tower Noel Road, Suite 2100 Dallas, TX U.S.A Everest Australasia Level 6, 90 Mount Street North Sydney, NSW 2060 Australia Everest India Ground Floor, Tower A Unitech Business Park South City - I, Gurgaon National Capital Region India Everest UK 83 Baker Street London, W1U 6LA United Kingdom Everest Group 150 E., 52 nd Street, 16 th Floor New York, NY U.S.A Everest Canada The Exchange Tower 130 King Street West, Suite 1800 Toronto, ON Canada M5X 1E Everest Australia 409a Wattletree Road East Malvern Melbourne, VIC 3145 Australia Get the answers today that lead to tomorrow’s success Peter Bendor-Samuel can be contacted at the Everest Group Headquarters ( )