vCustomer:
Christian Bonneau
Daniel Byrne
Stefanie Jones
Lindsay Rosenthal
Optimizing a
Global
Footprint
Objective
Objectives
Key Issues
Decision Overview
• Establish the most attractive market for:
• Offshore operations
• Potential clients
Off-Shoring
End Market
• Design the implementation plan for the
international expansion
Implementation
Additional
Recommendations
Q&A
• Recommend additional services
Key Issues
Objectives
Key Issues
Decision Overview
Off-Shoring
End Market
• Changing customer demands
• Near-shoring
• Single sourcing
• Higher value-added BPO
• Changing cost structures
• Rising wages in traditional low cost regions
Implementation
• vCustomer’s goals & competencies
Additional
Recommendations
Q&A
• Commitment to quality
• Best-in-class technology
• Low cost structure
Recommendation
Objectives
Key Issues
Offshore Country
Thailand
End market
United States
Decision Overview
Malaysia
Off-Shoring
China
Japan
End Market
Implementation
Additional
Recommendations
Q&A
India
Bulgaria
Western Europe
Offshore Criteria
Objectives
Financial Attractiveness
-Compensation
-Infrastructure
36%
-Tax & Regulatory
Thailand
People skills & availability
-Labour force
-Education
Malaysia
Key Issues
Decision Overview
Off-Shoring
-Attrition Risk
36%
China
End Market
Implementation
Additional
Recommendations
Business Environment
-Infrastructure
-Cultural exposure
-Initiatives in intellectual
property
-Ease of doing business
India
28%
Q&A
AT Kearney “Building the Optimal Global Footprint”
World Bank “Doing Business Economy Rankings”
Bulgaria
Drivers of Offshore Demand
Objectives
Key Issues
Decision Overview
-High wage
costs
Off-Shoring
High Potential
Economic
Gains From
Outsourcing
End Market
Implementation
Additional
Recommendations
Q&A
High Outsourcing Demand
-Inefficient
labour
End-market Analysis
Objectives
Wages
Key Issues
(high
wages)
EU
$ 127 B
Decision Overview
Off-Shoring
Efficiency
End Market
(high output)
(low output)
Implementation
Additional
Recommendations
Japan
$ <42 B
US
$277 B
Q&A
US department of Labor
(low
wages)
Market size:
$ 50 B USD
$ 100 B USD
$ 200 B USD
Most Attractive End Market:
Western Europe
Objectives
• Europe is the fastest growing consumer of BPO services
Key Issues
Decision Overview
Off-Shoring
End Market
Europe Grabbing Market Share
BPO + ITO Market
80%
60%
40%
Implementation
2002
20%
2006
0%
Additional
Recommendations
Q&A
United
States
Europe
Asia-Pacific
Top 5 Offshore Countries
Objectives
Bulgaria
Key Issues
Decision Overview
Western
Europe
Off-Shoring
End Market
Implementation
Additional
Recommendations
Q&A
United
States
China
Japan
Thailand
India
Malaysia
Fit with vCustomer’s Competencies
Objectives
Key Issues
Commitment to
Quality
• Educated in Sofia, speak many languages
• Excellent transportation time to market
Decision Overview
• IT Infrastructure risk is moderate but improving
Off-Shoring
Best in Class
Technology
End Market
• Internet connection per capita has more than
tripled over the past two years
Implementation
Additional
Recommendations
Q&A
• Privatization of BTC should lead to improved
telecom network
Low Cost
Structure
• Wages similar to India
• Inflation is moderate (<10%)
Recommendation
Objectives
Key Issues
Offshore Country
Thailand
End market
United States
Decision Overview
Malaysia
Off-Shoring
China
Japan
End Market
Implementation
Additional
Recommendations
Q&A
India
Bulgaria
Western Europe
Critical Implementation Issues
Objectives
Key Issues
Decision Overview
Off-Shoring
End Market
Implementation
Additional
Recommendations
Q&A
• Issues related to maintaining
vCustomer’s core competencies
• Maintaining low-cost structure as
Bulgaria’s labour market becomes
more mobile
• Best in class technology – guarantee
reliable access to broadband
• Dedication to quality
Low Cost Structure Implementation
Objectives
Key Issues
Decision Overview
Off-Shoring
End Market
Implementation
Additional
Recommendations
Q&A
• Very limited short-term wage
pressures
• Labour force mobility effecting longterm wage pressure
• EU labour mobility agreements (2011)
• Offer programs to retain employees
Best in Class Technology
Objectives
Key Issues
Decision Overview
Off-Shoring
End Market
Implementation
Additional
Recommendations
Q&A
• Bulgaria Telecom being privatized
• Long-term increase in quality of
infrastructure
• Meet with Mayor of Sofia and
Telecom head to reach access
agreement
• Potential for 1000+ job creation
powerful bargaining tool
Commitment to Quality
Objectives
Key Issues
Decision Overview
Off-Shoring
End Market
Implementation
Additional
Recommendations
Q&A
• Critical to client relationships
• Competence of employees key to
consistent service
• Large # unemployed university grads
• Continual training and quality
monitoring
Implementation Timeline – Functional
Analysis
Objectives
Key Issues
Logistics
Decision Overview
Off-Shoring
End Market
Human Resources
Implementation
Additional
Recommendations
Q&A
Marketing
Logistics
Objectives
Key Issues
Decision Overview
• Timeframe: 0-6 Months
• Analyze and execute entry method
• Continued partnership, acquisition, go it alone
• Site identification and secure leasing
Off-Shoring
End Market
Implementation
Additional
Recommendations
Q&A
• Starting with 11,500 sq. ft,
• Expandable to 23,000 sq. ft.
• Regulatory Approval (32 days)
• Establishment and testing of telecom services
• Install first 200 workstations
Logistics
Objectives
Key Issues
Decision Overview
• Timeframe: 6-12 Months
• Install 450 workstations
• Evaluate operations
Off-Shoring
End Market
Implementation
Additional
Recommendations
Q&A
• Timeframe: 18-24 months
• Install 450 workstations (total 1100)
• Increase proportion of BPO trained
CSRs
Human Resources Strategy
Objectives
Key Issues
Decision Overview
Off-Shoring
• Sales consultants
(20 initial, 5 annually subsequent)
• On-campus recruitment of European MBAgraduates
• Headhunting of established professionals
End Market
Implementation
Additional
Recommendations
Q&A
• CSRs, BPO clerks, admin staff
(1100 by year 3)
• Recruit through universities
• Screen for language, personality and aptitude
HR Strategy Continued
Objectives
Key Issues
Decision Overview
Off-Shoring
End Market
Implementation
Additional
Recommendations
Q&A
• Hands-on training for sales
consultants in India
• Work in service centres and on site
with clients
• CSRs and BPO clerks will receive
language and technical training
• Career evolution
• CSR → BPO Clerk → Sales Consultant
Marketing Plan
Objectives
Key Issues
Decision Overview
Off-Shoring
End Market
Implementation
Additional
Recommendations
Q&A
• Pitch Euro divisions of current clients
• Target market for sales staff:
• Medium sized international companies
• European based multinationals
• France, Germany and Spain
• Concentrate on established verticals
• Upsell CRM customers to BPO
Timeline
Logistics
HR
Marketing
Financial Projections
Objectives
Key Issues
Decision Overview
Off-Shoring
End Market
Implementation
Additional
Recommendations
Q&A
Product Mix
Call Centre
BPO
Sales (in millions of $)
India
Growth rate
Bulgaria
Growth rate
Total sales
EBITDA Margins
Call Centres
BPO
Forecasted EBITDA
Growth rate
2006
2007E
2008E
2009E
85%
15%
80%
20%
75%
25%
70%
30%
50
0
60
20%
0
72
20%
12
50
60
84
86
20%
24
100%
110
8.75%
15.24%
8.75%
15.24%
8.75%
15.24%
6.0
8.7
45%
11.8
36%
Product Differentiation Strategies
Process Specialization
Objectives
Present situation
Key Issues
Decision Overview
Payment services
Billing
CRM
Off-Shoring
Vertical Specialization
End Market
Implementation
CRM
Retail
Tele
Travel
Health
IT
Additional
Recommendations
CRM
Q&A
Capitalizing on customer demand
for a single source solution
Vertical Analysis
Objectives
Key Issues
Decision Overview
Off-Shoring
End Market
• Present verticals:
•
•
•
•
•
Telecom
Retail/ eCommerce
Technology (IT)
Travel & Hospitality
Health
Implementation
Additional
Recommendations
Q&A
• Recommended to expand one
vertical at a time
Vertical market decision criteria
Objectives
Key Issues
Decision Overview
Off-Shoring
End Market
• How many process within the vertical
does vCustomer currently serve?
• Ex: 80% of Healthcare processes
• Employee compatibility
• In-house expertise
Implementation
Additional
Recommendations
Q&A
• Client evaluation
• Client characteristics, company size
• Survey current clients to establish needs
Additional Consulting Services:
General Off-shoring
Objectives
Key Issues
Determine optimal entry strategy
• Require more in-depth information about partner
and current agreement
Decision Overview
Off-Shoring
End Market
Implementation
Additional
Recommendations
Q&A
Contract Design
• Termination and buy-out clauses
Off-shore location monitoring
• Labour mobility and rapid wage adjustment
• Bi-Annual tailored reporting indicating trends
Decision Overview
Objectives
Production Country
End market
Product
Differentiation
Key Issues
Thailand
United States
Decision Overview
Malaysia
Off-Shoring
End Market
Implementation
Additional
Recommendations
Q&A
China
Japan
India
Bulgaria
Western Europe
Process
Specialization
Vertical
Specialization
Key Issues Revisited
Objectives
Key Issues
Decision Overview
• Changing customer demands
• Near-shoring
• Single sourcing
• Higher value-added BPO
Off-Shoring
• Changing cost structures
End Market
• Rising wages in traditional low cost regions
Implementation
• vCustomer’s goals & competencies
Additional
Recommendations
Q&A
• Commitment to quality
• Best-in-class technology
• Low cost structure
Question & Answer
Lindsay
Stefanie
Daniel
Christian
Appendix slides
Appendix: End Market Analysis
End-Market Analysis – Raw Numbers
Labour Unit Cost
Output
US
$90
$135
Japan
$92
$126
EU
$104
$122
Wages
(high
wages)
101
EU
$ 127 M
99
97
Efficiency
95
(high output)133 131 129 127 125 123 121 119
(low output)
93
91
US
$277 M
89
(low
wages)
APAC
$ 42 M
Market size:
$ 50 M USD
$ 100 M USD
$ 200 M USD
BPO Overall Market Size
BPO contracts by region
Americas
Europe
Asia/Pacific
% Growth in contracts
% Growth in $ Value of Contracts
2004
2005
2006
2004
2005
2006
36%
-4%
4%
68%
-21%
-28%
59%
0%
56%
63%
-26%
15%
100%
30%
38%
250%
21%
-41%
Based on BPO deals worth greater that $25 million in contract value
Source: PwC, Morgan Stanley
Appendix: Financial Analysis
vCustomer’s Financial Projections
Product Mix
Call Centre
BPO
Sales (in millions of $)
India
Growth rate
Bulgaria
Growth rate
Total sales
EBITDA Margins
Call Centres
BPO
Forecasted EBITDA
Growth rate
2006
2007E
2008E
2009E
85%
15%
80%
20%
75%
25%
70%
30%
50
0
60
20%
0
72
20%
12
50
60
84
86
20%
24
100%
110
8.75%
15.24%
8.75%
15.24%
8.75%
15.24%
6.0
8.7
45%
11.8
36%
EBITDA Margins of Comparable Companies
EBITDA Margins of Comparable Companies
BPO
EXLS
WNS
Average
2006
17.51%
14.06%
2007
15.76%
13.42%
2008
16.30%
14.40%
Average
16.52%
13.96%
15.24%
Call Centres
Teletech
ICT Group
Convergys
Average
2006
10.24%
4.20%
9.10%
2007
12.37%
3.50%
9.70%
2008
14.02%
5.10%
10.50%
Average
12.21%
4.27%
9.77%
8.75%
Sample BPO Contract Lengths & Value
Vendor
Accenture
Capita Group
Geosoft Tech
Tata Consultancy
Client
Unilever
Havant Bourough Council
Medquist
Transantiago
Source: Merrill Lynch
Source: Merrill Lynch
Industry
Contract length Value
Rev/Month Type
Manufacturer
84
1000
11.9 BPO
Government
84
26.1
0.3 BPO
Services
60
24.5
0.4 BPO
Travel & Transport
60
20
0.3 BPO
Precedent Transactions in the IT Industry
Average Price/Sales:
1.22
Source: Merrill Lynch
vCustomer’s Profile
• Emphasis on call centres
• 85% call centres
• 15% BPO
• Several locations in India
• Strategy
• High quality, great customer retention
• Best-in-class technology
• Low cost, but not lowest price
Source: VCustomer case
Target Acquisition Profile
• Emphasis on quality & customer
service
• Excellent technology
• Good reputation
• Extension of BPO opportunity
• Small to Mid sized firm within our
price range
Source: VCustomer case
WebHelp - Profile
•
•
•
•
•
Located in Algeria & Eastern Europe
Strong client base in Europe
Same business model
Potential candidate for merger
Average price/sales of precedent
transactions: 1.22
Source: Merrill Lynch, VCustomer Case
Appendix: Country Analysis
ATKearney Inc. GSL Metrics
Category
Sub-Categories
Financial Attractiveness compensation costs
Metrics
average wages
Median compensation costs for relevant positions (Call-centre representatives. IT prorgrammers and
local operations managers), as reported in the Mercer Human Resources Consulting Global Pay
Summary
Infrastructure costs
Tax and regulatory costs
rental costs
Commercial electricity rates
International telecom costs
Travel to major customer destinations
Relative tax burden
costs of corruption
Currency appreciation or depreciation
ATKearney Inc. GSL Metrics
Category
People skills, and
availability
Sub-Categories
Remote service sector
experience and quality ratings
Metrics
Education and Language
size of existing IT and BPO services
Contact center and IT center quality certifications
Total workforce
University-educated workforce
Workforce flexibility
Scores on standardized education and language tests
Attrition Risk
Relative IT and BPO sector growth and unemployment rates
Labour Force Availability
ATKearney Inc. GSL Metrics
Category
Business Environment
Sub-Categories
Country Environment
Infrastructure
Cultural Exposure
Security of intellectual property
(IP)
Metrics
Investor and analyst rating of overall business and political enviroment
A.T. Kearney Foreign Direct Investment Confidence Index
Security Risk
Regulatory burden employment rigidty
Government support for the information and communication technology (ICT) sector
Overall infrastructure quality
Quality of telecom, internet, and electrictiy infrastructure
Personal interaction score from A.T. Kearney/Foreign Policy Globalization Index
Investor ratings of IP protection and ICT laws
Software piracy rates
Information security certifications
Additional countries to GSL report
• Albania, Belarus, Bosnia & Herzegovina,
Croatia, Lithuania, Macedonia, Moldova,
Serbia
• People: World Bank indexes difficulty of
firing, hiring, etc
• Financial: Tax rate as % of profit, cost as
% property value, (world bank)
• Business Environment: Corruption Index
Augmented weighting to Offshore
Country Analysis
• GSL categories: Financial (40%), People
(40%), Business environment (20%)
• Total weight (90%)
• World Bank: Ease of doing business rank
• Total weight (10%)
• Overall weights:
•
•
•
•
Financial 36%
People 36%
Environment 18%
Ease of business 10%
Top Offshore Country rankings
Overall Ranking
GSL RANK
COUNTRY
World Bank
Ranking
total score
(GSL 90%,
WB 10%)
1
5
Thailand
18
6.3
2
8
Malaysia
25
9.7
3
2
China
93
11.1
4
1
India
134
14.3
5
10
54
14.4
6
3
135
16.2
7
14
43
16.9
8
6
Brazil
121
17.5
9
12
Serbia
68
17.6
10
17
Chile
28
18.1
11
9
Moldova
103
18.4
12
7
Philippines
126
18.9
13
15
Jordan
78
21.3
14
13
Vietnam
104
22.1
15
16
Ghana
94
23.8
16
23
Slovakia
36
24.3
17
20
Uruguay
64
24.4
18
19
Sri Lanka
89
26
19
18
Argentina
101
26.3
20
21
Pakistan
74
26.3
Bulgaria
Indonesia
Mexico
Offshore Country - Malaysia
Category
• Offshore salaries are more than double
those found in India and China
Financial
Attractiveness • Possibility of encountering corruption
costs
• Limited size/quality workforce impedes
People skills & country to gain large share of global
availability
IT business
Business
Environment
• Well-developed infrastructure
• Attractive business environment
• Stable political environment
Source: http://news.com.com/Outsourcings+next+big+thing--Malaysia/2100-1011_3-5344618.html
Offshore Country - Thailand
Category
• Slightly higher offshore salaries than
Financial
India and China
Attractiveness • Higher level of corruption = higher costs
•Low literacy rate (92%)
People skills & •Growing services labour force (37%)
availability
Business
Environment
•Strong growth rates in 03-04 (~6%)
•Separatist movements causes unstable
government
https://www.cia.gov/cia/publications/factbook/geos/th.html
Offshore Country - China
Category
•Cost effective solution, similar to India
Financial
Attractiveness
•Huge labour force
People skills & •Difficulty with English language
availability
Business
Environment
•Difficulty in establishing the necessary
connections
•Early stages of call centre development
Offshore Country - Philippines
Category
• 1/3 Higher offshore salaries in
Financial
comparison to India and China
Attractiveness •Wage Inflation & attrition is a concern
•Excels in high quality call centres
People skills & •Strong labour force
availability
• High corruption rate = Higher costs
Business
Environment
Offshore Country - Poland
Category
Financial
Attractiveness
People skills &
availability
Business
Environment
• Higher wage costs
• Skilled Labour force
• Stable
Offshore Country - Mexico
Category
Financial
Attractiveness
• Higher wage costs
•Large labour force
People skills & •Rigid labour laws
availability
•Poor education
Business
Environment
• Reasonably stable
• Proximity to the US
• Poor infrastructure
Offshore Country - Brazil
Category
Financial
Attractiveness
• Wage costs almost double India
• Large population
People skills &
• Strong technical skills
availability
Business
Environment
• Reasonably Stable
Appendix: BPO Trends
BPO Industry Mix (by Vertical)
BPO Market by Industry (by Vertical)
Other
25%
BFSI
37%
Healthcare
6%
Retail
6%
Telecom
13%
Source: PwC, Morgan Stanley
Manufacturing
13%
BPO Segment Mix (by Process)
Segment Mix
Product
engineering
7%
Sales & Marketing
34%
Human Resources
3%
Finance &
Accounting
4%
Customer service
10%
Logistics
42%
Source: PwC
BPO Segment Growth Rates
Human Resources
Finance & Accounting
Customer service
Logistics
Sales & Marketing
Product engineering
Procurement
Training
2005
13,009
14,358
40,619
178,731
146,526
27,313
583
1,333
2006E
15,128
16,405
46,357
198,769
156,836
32,789
708
1,738
2007E
17,651
18,770
52,165
221,494
165,967
38,819
862
2,160
2008E
20,614
21,673
59,321
248,129
175,131
45,424
1,056
2,725
2009E 05-09 CAGR
23,915
12.9%
25,328
12.0%
66,843
10.5%
280,034
9.4%
187,781
5.1%
53,037
14.2%
1,291
17.2%
3,002
17.6%
Total
422,472
468,730
517,888
574,073
641,231
Source: Morgan Stanley
8.7%
Top 25 BPO Service Providers
Source:
Top 10 BPO Providers & Mkt Share
Source: Gartner
Global Players in Offshore Outsourcing
Source: Business week
Offshore Salaries by Region
Source:
General Regional Trends
• Philippines – focus on customer
service/call centres
• Eastern Europe – focus on finance &
accounting
• Russia – focus on embedded
software/product development
• South America – Spanish Language skills
• China – interest slowing rising for
outsourcing (0% in 2004 vs. 8% now)
Source: Morgan Stanley
BPO Trends in India
• Current trends:
•
•
•
•
Explosion of growth
Entry of big players
Declining pricing & margins
Trend towards near shoring
• Conclusion: Indian companies must
become more global to survive &
thrive
Source: PwC, Wachovia
India: BPO Industry Trends
Trends
What can vCustomer do?
Location Changes
- Find near shore opportunities for end user markets
Structural Changes
- Focus more on domain/industry specialized BPO process
Product Offering
- Create higher-end processes (Value-added)
Cost Structure
Changes
- Offer customers
Client
Relationships
- Partnership-based
Cost of Manpower
& Infrastructure
- Need to diversify geographically
Deal Structure
- BOT / Joint Venture / Captive Model
Migrations
Strategies
- Offer value-added services throughout all processes
Risk & Contracts
- Create process that mitigate risk
- Continue to maintain strong customer relationships to stray
from exit-clauses
Source: PWC Report: The Evolution of BPO in India – April 2005
India – HR Related Issues
Trends
Increased
Attrition
What can vCustomer do?
- Focus on more stable work environments (value-added)
- Locate in Tier II or III
- Reinforce company brand image
- Continue more process-based not person-based
Retention
Strategies
- Continue HR initiatives
- More emphasis on career planning and cross-training
- Support anti-poaching agreements
- Leadership initiatives
- Recognition/Remuneration strategies
Recruitment
Strategies
Industry
Repositioning
- Use competency approach (skill tests)
- Use realistic job-previews
- Join NASSCOM skill registry
- Support initiatives for “long-term career” projects
- Create career track within own company
Appendix: Bulgarian Market
Bulgaria – Key Strengths
• Stable
• Part of the EU
• Currency pegged to the Euro
• BB+ rating
• Innovative
• Ranked #2 in the EMEA in IT
• Best time to market
• According to World bank report on
business climate
Source: Invest Bulgaria Agency, World Bank
Bulgaria – Key Strengths
• Set up time:
• Average of 32 days with 9 processes
• Prices of goods are declining
• Recently invested a significant
amount in transportation
infrastructure
• Average annual wage in Bulgaria in
2006 was 4,255 leva (2,175.55 euro)
http://www.sofiaecho.com/article/expectations-for-bulgarias-economic-growth-in-2007-reach-58-per-cent/id_22042/catid_67
http://www.sofiaecho.com/article/world-bank-grants-bulgaria-409m-euro-for-trade-and-transportation-projects/id_22039/catid_67
Bulgaria - Trends
Source: Invest Bulgaria Agency
Bulgaria - Trends
Source: Invest Bulgaria Agency
Bulgaria - Critical HR Issue
Objectives
• Specific recruiting considerations:
Key Issues
• Creating brand recognition to attract
potential candidates
• Ensuring “fit” between new hire and
company
• Essential to evaluate employee
competencies
Decision Overview
Industry Analysis
Country Analysis
Product Analysis
Implementation
Source: http://www.goaleurope.com/main?p=30&more=1&c=1
Skill Competencies
for BPO Employees in Bulgaria
• 7 distinct skills sets:
•
•
•
•
•
•
•
Keyboard skills
Verbal ability
Spoken English/French/German/Spanish
Comprehension & writing ability
Office software usage
Numerical analytical skills
Concentration & accuracy ability
• All employees should be tested on these
competences prior to being hired
Source: http://www.nasscom.in/Nasscom/templates/NormalPage.aspx?id=2374
Sofia - Infrastructure
• Strong infrastructure
• Centre for international railway &
automobile routes
• Public transit is well-developed
• 500,000 cars in Sofia
• Centrally heated
Source: Wikipedia
Sofia - Education
• 16 Universities
• Largest university
enrolls 14,000 students
per year
• Large share of
unemployed people with
higher education
• 27% vs. 7% for rest of the
country
Source: Wikipedia, Sofica investor presentation
Sofia - Language
Source: Sofica investor presentation
Sofia - Wages
• Average annual wage in 2006 was
4,255 leva (3000 USD)
• BPO wages similar to India: 7,5008,000
• Relatively low inflation: approx 10%
(versus mid-teens for India)
Source: Bulgarian News Net
Sofia - Government
• Mayor - Boyko Borisov
• Founder of GERB
•
•
•
•
•
New political organization
Stated goal is to fight crime & corruption
Preserving family as cornerstone of society
Becoming energy independent
2nd in popular polls
• Karate expert – coach of national team
Source: Wikipedia
Bulgarian Competitors
• Sofica
• Approx. 40 agents
• Serves IT, telecom, transport, utilities
and financial sector customers
• Differentiating on service quality,
foreign language fluency, cultural and
business compatibility
Source: Sofica
Bulgarian Competitors
• Call Centre Bulgaria
• Approx. 75+ agents
• Use VOIP technology
• Provides inbound and outbound
services for European, East European
and domestic (Bulgaria) clients
• Multi-language low cost platform
Source: Call Centre Bulgaria
Bulgarian Competitors
• Aii Data Processing
• Approx. 250+ agents
• Focused on information and editorial
services, data processing and business
services
• Provides BPO activities in credit
management, billing, telemarketing &
telesales
Source: Aii data processing
Contingency Plan - Slovakia
• Capital city – Bratislava
• Economy based on:
• Services from high tech firms (e.g. IBM,
Dell, Accenture)
• Engineering
• Chemical and electrical industries
• Recent trends:
• Service and high-tech oriented businesses
are thriving
• Many global companies are building their
outsourcing and service centres or have
plans to build in the near future here
Source: Wikipedia
Appendix: Implementation Plan
Implementation – Facility Size
• 1 employee per $21K in sales
• $24M in sales → 1150 Employees
• 20 sq. ft. per employee
• 1150 Employees → 23K sq. ft.
Implementation – Labour Force
• 1 employee per $21K in sales*
• $24M in sales → 1150 Employees
• 93% staff billable, 7% support and
sales**
• 1150 Employees → 80 support and
sales → 40 sales and consultants
*Benchmarked from Tata and WNS
**Benchmarked from WNS
Bulgaria IT Infrastructure
• Infrastructure risk is moderate
• The main risk arises from the unreliable
quality of the telephone network that can
make access to the Internet slow
• The quality of telecoms infrastructure is
likely to improve now that the privatisation
of the fixed-line telecoms operator, BTC,
has been completed
• Although historically low, the total
international connection per capita has
more than tripled for the past two years
Vertical initial analysis:
• Present verticals:
• Telecom
• Small addressable market, high offshore
penetration
• Retail/ eCommerce
• Largest addressable market
• Technology (IT)
• Many large clients
• Travel & Hospitality
• Lowest addressable market, do it yourself trend
• Health
• High level of trust, two tier systems
Sources
• Morgan Stanley – IT Services – Outsourcing & Consulting
– 2007 Outlook & Trends Report, January 22, 2007
• Businessweek feature on outsourcing http://www.businessweek.com/magazine/toc/06_05/B3969
0605outsourcing.htm
• Merrill Lynch – Mid-Quarter IT outsourcing Review –
September 7, 2006
• Price Waterhouse Coopers – The Evolution of BPO in
India – April 2005
• Wachovia – Global Delivery of IT/BPO Outsourcing –
November 16, 2006
• A.T. Kearney – Building the Optimal Global Footprint –
2005
Sources
• Company websites (vCustomer, Call
Centre Bulgaria, Sofica, Aii Data
Processing)
• Invest Bulgaria Agency
• World Bank
• Wikipedia
• Credit Suisse, EXLService Holdings,
March 2, 2007
• Credit Suisse, WNS Global Services,
March 2, 2007
• Bulgarian news net
Bulgaria
• Reasons for high graduate
unemployment rates:
• A sluggish market causes periodic
fluctuations in the labour market
• Youngest and oldest workers tend to
be the most because firms recruit few
young graduates and lay off the oldest
workers
Source: http://www.eurydice.org/portal/page/portal/Eurydice/FigurePage?pub=052EN&fig=A7&SizeCode=null&SVG=TRUE
Bulgaria
• Reasons for Bulgarian labour force
staying in Bulgaria:
• EU15 states are very reluctant to open
labour market to Bulgaria
• CE-8 is currently under scrutiny, not
favouring Bulgaria’s labour force
• Trends for governments to create
incentives to keep skilled labour force
within
Source: http://transitioneconomies.blogspot.com/2006/10/bulgaria-and-romania-green-light.html