1. The Contact Centre Industry -- Outsourcing Internationally World Summit on the Information Society: Women and ICT Tunis, November 2005

2. Objectives of Presentation 1.How a developing nation can make use of the information technology and educated workforce to develop an outsourcing and offshoring call centre industry 2.Examples from India, Malaysia and the Philippines

3. Who is COPC Inc.? Customer Operations Performance Center Inc. Founded in 1995 Grown to a worldwide staff of 60 associates in nine countries More than 750 onsite operational audits in 30 countries / average 10 audits per month 200,000 contact center seats Operations of all sizes From 10 to 5,000 customer contact seats Co-developers of the Industry Standards for contact centers worldwide

4. Global Footprint Argentina – Australia – Brazil – Canada – India – Japan Singapore – United Kingdom – United States Offices in nine countries around the world

5. Global Standard CanadaIreland United StatesEngland Dominican RepublicFrance ArgentinaNorway BrazilNetherlands Costa RicaGermany South Africa Japan Singapore Malaysia Philippines Hong Kong Australia India Pakistan 200 Companies – 300 Locations 35 Countries – 6 Continents Global Internal / External Operational Environments

6. Evolution of economy Early 1900s, the economy was predominantly driven by agriculture. The nations which had a strong agricultural production had a competitive advantage. Mid 1900s, industrial revolution became a dominant force in driving the economy. Manufactured goods and products delivered competitive advantage to nations. Late 1900s, the manufacturing economy gave way to the information economy where knowledge and information services play a key role in providing competitive advantage to a nation/company.

7. Key Terms and Relationships OnShore: The Client’s domestic locations (e.g. Canada, US and Europe) NearShore: Typically countries near the OnShore locations (e.g., Mexico and the Caribbean) Offshore: Locations significantly distant from the Onshore geography (e.g., India, the Philippines, and South Africa) Global Sourcing: The use of CSPs in multiple locations to service the Client’s customer transactions

8. Development of economy in emerging countries Singapore during her formative years of the 1960’s and 1970’s strong, effective and stable government investment in education and infrastructure attract large amounts of foreign direct investment India, over the past 5 years have developed a strong offshore industry with better educated people and low-cost workfoce

9. Alternative Locations

10. Why Companies Offshore? Top corporations are focusing more on core activities and outsource labor intensive service functions. Lower operating costs often dominate today´s company site selection criteria. Labor shortages/wage pressures are driving Contact Centers out of the their home countries to low cost international locations. International telecommunication costs are dropping in many geographical areas.

11. Moving Offshore: Key Challenges for European and U.S. Companies Companies which want to move their operations face two types of risks in deciding where to migrate transactions offshore: Location risks: Where should I go? Company risks: Who should I use? Additional risks include deciding which customer transactions to move offshore.

12. Moving Offshore: Key Challenges Location – Distance Physical Cultural Political, economic, and social stability Buyer staff safety Tax policy – Incentives Customs regulations Ease of implementation Transportation (air services, courier services) Location-specific factors

13. Moving Offshore: Key Challenges Labor pool Size, skills, cost, labor laws Unemployment, income levels Work ethic, flexibility Attrition, absenteeism Work expectations (e.g., company provided transportation, food, housing) Telecommunications infrastructure (carriers, fiber, cost) Reliability – redundancy Electric Power (Back-Up) Availability of replacement equipment Location-specific factors

14. Moving Offshore: Key Challenges Range of Services Offered Cost of Services (Quoted and Actual) Ability to meet commitments & hit targets Implementation capability (time to volume – the ramp) Technology Platform (compatibility) Workforce Skills – both coming in and required time to train Voice/culture neutralization Attrition/Absenteeism Experience Management team (capabilities, depth, and tenure) With the offshore markets under considerations (“we can set up a site for you there”) With the specific products/services being moved offshore Company-specific factors

15. India as an offshore site for U.S. and European companies Delhi Mumbai (Bombay) Pune Hyderabad Bangalore Chennai

16. Market Review: India Projected to grow 100%+ per year through 2005 Major players establishing “owned” centers 200-250 contact centres, some without customers CSRs paid US$150 to US$300/month “all in” Provide services for $13 to $18/hour voice “all in” Connectivity improving Aggressively marketing to US/UK companies

17. India Strengths Weaknesses General Stable economy Stable socially/politically Physically safe? English speaking Government support – in some parts Labor Available (high unemployment) Educated Low cost Good work ethic Average absenteeism Physical distance Cultural distance/difference Time difference – working daily at night Doesn’t show well “Expediting” payments Bureaucracy--slow implementation Attrition rates high – 50%+ Have to train “basic skills”  PC  Customer service  Typing  Language/accent/culture Lack flexibility Few experienced managers

18. India Infrastructure New technology/equipment New facilities Telecom  Inexpensive  Improving availability Power: Totally redundant Availability of critical equipment Availability, speed, and capability of repair technicians Strengths Weaknesses

19. Indian ITES - BPO Industry A US$ 5.0 b industry and growing stronger

20. Outsourcing of IT jobs to India could grow fivefold to $50 billion by 2008 if it can overcome a US labour backlash says a report by investment-analyst firm Brean Murray Institutional Research Indian ITES - BPO Industry

21. Looking Ahead India has the opportunity to be a world leader One prediction is that by 2008, India will employ two million people as call centre staff Opportunity for severe price competition Will need to keep “eyes wide open” and aggressively compete with other countries/regions

22. Malaysia as an offshore site for U.S. and European companies General Stable economy Stable socially/politically Physically safe Ability to find English speaking staff Government support Little Bureaucracy Physical distance from the U.S. and Europe However, focusing on customers in South East Asian regions of Multi-Nationals StrengthsWeaknesses

23. Malaysia as an offshore site for U.S. and European companies Labor More experienced CCC managers compared to 2002 Average absenteeism Ability to find English, Cantonese and some Asian languages to provide service to Asian regions of U.S. companies No experience with (and no desire to) accent neutralization Unfamiliar with U.S. or European culture Strengths Weaknesses

24. Malaysia as an offshore site for U.S. and European companies Infrastructure Available technology, power, telecom--things works here Very limited experience with centers of size >1,000 Strengths Weaknesses

25. Philippines as an offshore site for U.S. and European companies General English speaking Culturally close to US Unstable economy Uncertain political climate Limited government support Physical safety? Physical distance Bureaucracy--slow implementation StrengthsWeaknesses

26. Philippines as an offshore site for U.S. and European companies Labor Available (high unemployment) Educated Low cost Low attrition? Average absenteeism Infrastructure More experience than India--doing emails and calls for 3-5 years Many issues reported Strengths Weaknesses

27. Companies are looking for alternative to India – source: ContactCentre.net 13 Nov 2005 The high turnover rate of Indian call centre staff and cultural differences has prompted a British internet service provider to relocate its call centre from the subcontinent to South Africa. An ISP with 250,000 customers, has shifted its call centre to Durban a £2 million (US$3.5 million) the main reason - high levels of turnover among call centre agents in India. South Africa is believed to have the second-lowest turnover rate in the world, at between 5-15 % a year, whereas, India's rate was about 35%. “South Africa has a very good population that is culturally diverse for call centre work."

28. Tunisia as an offshore site for U.S. and European companies Should review the opportunities for the outsourcing industry Review strengths and opportunities Educated population Developing infrastructure Political stability Same Time Zone as Europe and the Middle East Culturally close to Europe French and Arabic language skills France, Belgium, French Canada and the rest of the French-speaking world Multi-national companies Arabic language needs

29. Thank You