vcustomer: optimizing a global footprint christian bonneau daniel byrne stefanie jones lindsay...
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vCustomer: Optimizing a
Global
FootprintChristian Bonneau Daniel ByrneStefanie JonesLindsay Rosenthal
Objective
• Establish the most attractive market for:• Offshore operations • Potential clients
• Design the implementation plan for the international expansion
• Recommend additional services
Objectives
Key Issues
Decision Overview
Off-Shoring
End Market
Implementation
Additional Recommendations
Q&A
Key Issues
• Changing customer demands• Near-shoring• Single sourcing• Higher value-added BPO
• Changing cost structures• Rising wages in traditional low cost regions
• vCustomer’s goals & competencies• Commitment to quality• Best-in-class technology• Low cost structure
Objectives
Key Issues
Decision Overview
Off-Shoring
End Market
Implementation
Additional Recommendations
Q&A
Recommendation
End marketOffshore Country
United States
India
Malaysia
JapanChina
Thailand
Western EuropeBulgaria
Objectives
Key Issues
Decision Overview
Off-Shoring
End Market
Implementation
Additional Recommendations
Q&A
Offshore CriteriaFinancial Attractiveness -Compensation-Infrastructure
-Tax & Regulatory
People skills & availability -Labour force-Education
-Attrition Risk
Business Environment -Infrastructure-Cultural exposure-Initiatives in intellectual property-Ease of doing business
36%
28%
36%
AT Kearney “Building the Optimal Global Footprint”
World Bank “Doing Business Economy Rankings”
India
Malaysia
China
Thailand
Bulgaria
Objectives
Key Issues
Decision Overview
Off-Shoring
End Market
Implementation
Additional Recommendations
Q&A
Drivers of Offshore Demand
Objectives
Key Issues
Decision Overview
Off-Shoring
End Market
Implementation
Additional Recommendations
Q&A
-High wage
costs-Inefficient
labour
High Potential Economic
Gains FromOutsourcing
High Outsourcing Demand
End-market Analysis
Wages
(high wages)
(low wages)
Efficiency
(high output) (low output)
Market size:
$ 50 B USD
$ 100 B USD
$ 200 B USDUS department of Labor
US$277 B
EU $ 127 B
Japan $ <42 B
Objectives
Key Issues
Decision Overview
Off-Shoring
End Market
Implementation
Additional Recommendations
Q&A
Most Attractive End Market: Western Europe
• Europe is the fastest growing consumer of BPO servicesObjectives
Key Issues
Decision Overview
Off-Shoring
End Market
Implementation
Additional Recommendations
Q&A
0%
20%
40%
60%
80%
UnitedStates
Europe Asia-Pacific
Europe Grabbing Market ShareBPO + ITO Market
2002
2006
Top 5 Offshore Countries
Thailand
Malaysia
China
India
Bulgaria
Objectives
Key Issues
Decision Overview
Off-Shoring
End Market
Implementation
Additional Recommendations
Q&A
Western
Europe
UnitedStates
Japan
Fit with vCustomer’s Competencies
• IT Infrastructure risk is moderate but improving
• Privatization of BTC should lead to improved telecom network
• Internet connection per capita has more than tripled over the past two years
• Wages similar to India
• Inflation is moderate (<10%)
• Educated in Sofia, speak many languages
• Excellent transportation time to market
Objectives
Key Issues
Decision Overview
Off-Shoring
End Market
Implementation
Additional Recommendations
Q&A
Commitment toQuality
Best in Class Technology
Low CostStructure
Recommendation
End marketOffshore Country
United States
India
Malaysia
JapanChina
Thailand
Western EuropeBulgaria
Objectives
Key Issues
Decision Overview
Off-Shoring
End Market
Implementation
Additional Recommendations
Q&A
Critical Implementation Issues
• 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
Objectives
Key Issues
Decision Overview
Off-Shoring
End Market
Implementation
Additional Recommendations
Q&A
Low Cost Structure Implementation
• Very limited short-term wage pressures
• Labour force mobility effecting long-term wage pressure• EU labour mobility agreements (2011)
• Offer programs to retain employees
Objectives
Key Issues
Decision Overview
Off-Shoring
End Market
Implementation
Additional Recommendations
Q&A
Best in Class Technology
• 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
Objectives
Key Issues
Decision Overview
Off-Shoring
End Market
Implementation
Additional Recommendations
Q&A
Commitment to Quality
• Critical to client relationships
• Competence of employees key to consistent service• Large # unemployed university grads
• Continual training and quality monitoring
Objectives
Key Issues
Decision Overview
Off-Shoring
End Market
Implementation
Additional Recommendations
Q&A
Implementation Timeline – Functional Analysis
Objectives
Key Issues
Decision Overview
Off-Shoring
End Market
Implementation
Additional Recommendations
Q&A
Logistics
Human Resources
Marketing
Logistics
• Timeframe: 0-6 Months• Analyze and execute entry method
• Continued partnership, acquisition, go it alone
• Site identification and secure leasing• 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
Objectives
Key Issues
Decision Overview
Off-Shoring
End Market
Implementation
Additional Recommendations
Q&A
Logistics
• Timeframe: 6-12 Months• Install 450 workstations• Evaluate operations
• Timeframe: 18-24 months• Install 450 workstations (total 1100)• Increase proportion of BPO trained
CSRs
Objectives
Key Issues
Decision Overview
Off-Shoring
End Market
Implementation
Additional Recommendations
Q&A
Human Resources Strategy
• Sales consultants(20 initial, 5 annually subsequent)• On-campus recruitment of European MBA-
graduates • Headhunting of established professionals
• CSRs, BPO clerks, admin staff (1100 by year 3)• Recruit through universities• Screen for language, personality and aptitude
Objectives
Key Issues
Decision Overview
Off-Shoring
End Market
Implementation
Additional Recommendations
Q&A
HR Strategy Continued
• 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
Objectives
Key Issues
Decision Overview
Off-Shoring
End Market
Implementation
Additional Recommendations
Q&A
Marketing Plan
• 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
Objectives
Key Issues
Decision Overview
Off-Shoring
End Market
Implementation
Additional Recommendations
Q&A
Timeline
Logistics
Marketing
HR
Financial Projections
2006 2007E 2008E 2009EProduct MixCall Centre 85% 80% 75% 70%BPO 15% 20% 25% 30%
Sales (in millions of $)India 50 60 72 86Growth rate 20% 20% 20%Bulgaria 0 0 12 24Growth rate 100%Total sales 50 60 84 110
EBITDA MarginsCall Centres 8.75% 8.75% 8.75%BPO 15.24% 15.24% 15.24%
Forecasted EBITDA 6.0 8.7 11.8Growth rate 45% 36%
Objectives
Key Issues
Decision Overview
Off-Shoring
End Market
Implementation
Additional Recommendations
Q&A
Product Differentiation Strategies
Billing
Present situation
CRM
Payment services
CRM
Process Specialization
Vertical Specialization
HealthTele TravelRetail
Capitalizing on customer demand for a single source solution
Objectives
Key Issues
Decision Overview
Off-Shoring
End Market
Implementation
Additional Recommendations
Q&A
CRM
IT
Vertical Analysis
• Present verticals: • Telecom• Retail/ eCommerce• Technology (IT)• Travel & Hospitality• Health
• Recommended to expand one vertical at a time
Objectives
Key Issues
Decision Overview
Off-Shoring
End Market
Implementation
Additional Recommendations
Q&A
Vertical market decision criteria
• How many process within the vertical does vCustomer currently serve?• Ex: 80% of Healthcare processes
• Employee compatibility• In-house expertise
• Client evaluation• Client characteristics, company size• Survey current clients to establish needs
Objectives
Key Issues
Decision Overview
Off-Shoring
End Market
Implementation
Additional Recommendations
Q&A
Additional Consulting Services:General Off-shoring
Determine optimal entry strategy• Require more in-depth information about partner
and current agreement
Contract Design• Termination and buy-out clauses
Off-shore location monitoring • Labour mobility and rapid wage adjustment • Bi-Annual tailored reporting indicating trends
Objectives
Key Issues
Decision Overview
Off-Shoring
End Market
Implementation
Additional Recommendations
Q&A
Decision Overview
End marketProduction Country
United States
India
Malaysia
JapanChina
Thailand
Western EuropeBulgaria
Product Differentiation
Process Specialization
VerticalSpecialization
Objectives
Key Issues
Decision Overview
Off-Shoring
End Market
Implementation
Additional Recommendations
Q&A
Key Issues Revisited
• Changing customer demands• Near-shoring• Single sourcing• Higher value-added BPO
• Changing cost structures• Rising wages in traditional low cost regions
• vCustomer’s goals & competencies• Commitment to quality• Best-in-class technology• Low cost structure
Objectives
Key Issues
Decision Overview
Off-Shoring
End Market
Implementation
Additional Recommendations
Q&A
LindsayStefanie
DanielChristian
Question & Answer
Appendix slides
Appendix: End Market Analysis
End-Market Analysis – Raw Numbers
Wages
(high wages)
(low wages)
Efficiency
(high output) (low output)
Market size:
$ 50 M USD
$ 100 M USD
$ 200 M USD
US$277 M
EU $ 127 M
APAC $ 42 M
95125127129131133 123 121 119
97
99
101
93
91
89
US Japan EULabour Unit Cost $90 $92 $104Output $135 $126 $122
BPO Overall Market Size
BPO contracts by region
% Growth in contracts % Growth in $ Value of Contracts2004 2005 2006 2004 2005 2006
Americas 36% -4% 4% 68% -21% -28%Europe 59% 0% 56% 63% -26% 15%Asia/Pacific 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 Projections2006 2007E 2008E 2009E
Product MixCall Centre 85% 80% 75% 70%BPO 15% 20% 25% 30%
Sales (in millions of $)India 50 60 72 86Growth rate 20% 20% 20%Bulgaria 0 0 12 24Growth rate 100%Total sales 50 60 84 110
EBITDA MarginsCall Centres 8.75% 8.75% 8.75%BPO 15.24% 15.24% 15.24%
Forecasted EBITDA 6.0 8.7 11.8Growth rate 45% 36%
EBITDA Margins of Comparable Companies
EBITDA Margins of Comparable Companies
BPO 2006 2007 2008 AverageEXLS 17.51% 15.76% 16.30% 16.52%WNS 14.06% 13.42% 14.40% 13.96%Average 15.24%
Call Centres 2006 2007 2008 AverageTeletech 10.24% 12.37% 14.02% 12.21%ICT Group 4.20% 3.50% 5.10% 4.27%Convergys 9.10% 9.70% 10.50% 9.77%Average 8.75%
Sample BPO Contract Lengths & Value
Source: Merrill Lynch
Vendor Client Industry Contract length Value Rev/Month TypeAccenture Unilever Manufacturer 84 1000 11.9 BPOCapita Group Havant Bourough Council Government 84 26.1 0.3 BPOGeosoft Tech Medquist Services 60 24.5 0.4 BPOTata Consultancy Transantiago Travel & Transport 60 20 0.3 BPO
Source: Merrill Lynch
Precedent Transactions in the IT Industry
Source: Merrill Lynch
Average Price/Sales: 1.22
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
Financial Attractiveness average wages
rental costsCommercial electricity ratesInternational telecom costsTravel to major customer destinationsRelative tax burdencosts of corruptionCurrency appreciation or depreciation
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
compensation costs
Infrastructure costs
Tax and regulatory costs
MetricsCategory Sub-Categories
ATKearney Inc. GSL Metrics
size of existing IT and BPO services
Contact center and IT center quality certificationsTotal workforceUniversity-educated workforceWorkforce flexibilityScores on standardized education and language tests
Relative IT and BPO sector growth and unemployment rates
Remote service sector experience and quality ratings
Labour Force Availability
Education and Language
Metrics
People skills, and availability
Attrition Risk
Category Sub-Categories
ATKearney Inc. GSL Metrics
Business Environment Investor and analyst rating of overall business and political enviromentA.T. Kearney Foreign Direct Investment Confidence IndexSecurity RiskRegulatory burden employment rigidtyGovernment support for the information and communication technology (ICT) sectorOverall infrastructure qualityQuality of telecom, internet, and electrictiy infrastructurePersonal interaction score from A.T. Kearney/Foreign Policy Globalization Index
Investor ratings of IP protection and ICT laws
Software piracy ratesInformation security certifications
Infrastructure
Cultural Exposure
Security of intellectual property (IP)
Metrics
Country Environment
Category Sub-Categories
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 rankingsOverall 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 Bulgaria 54 14.4
6 3 Indonesia 135 16.2
7 14 Mexico 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
Offshore Country - MalaysiaCategory
Financial Attractiveness
• Offshore salaries are more than double
those found in India and China• Possibility of encountering corruption
costs
People skills & availability
• Limited size/quality workforce impedes
country to gain large share of global
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 - ThailandCategory
Financial Attractiveness
• Slightly higher offshore salaries than
India and China• Higher level of corruption = higher costs
People skills & availability
•Low literacy rate (92%) •Growing services labour force (37%)
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 - ChinaCategory
Financial Attractiveness
•Cost effective solution, similar to India
People skills & availability
•Huge labour force•Difficulty with English language
Business Environment
•Difficulty in establishing the necessary connections•Early stages of call centre development
Offshore Country - PhilippinesCategory
Financial Attractiveness
• 1/3 Higher offshore salaries in
comparison to India and China•Wage Inflation & attrition is a concern
People skills & availability
•Excels in high quality call centres•Strong labour force
Business Environment
• High corruption rate = Higher costs
Offshore Country - PolandCategory
Financial Attractiveness
• Higher wage costs
People skills & availability
• Skilled Labour force
Business Environment
• Stable
Offshore Country - MexicoCategory
Financial Attractiveness
• Higher wage costs
People skills & availability
•Large labour force •Rigid labour laws•Poor education
Business Environment
• Reasonably stable
• Proximity to the US• Poor infrastructure
Offshore Country - BrazilCategory
Financial Attractiveness
• Wage costs almost double India
People skills & availability
• Large population
• Strong technical skills
Business Environment
• Reasonably Stable
Appendix: BPO Trends
BPO Industry Mix (by Vertical)
BPO Market by Industry (by Vertical)
Manufacturing13%
Other25%
Healthcare6%
Telecom13%
Retail6%
BFSI37%
Source: PwC, Morgan Stanley
BPO Segment Mix (by Process)Segment Mix
Sales & Marketing34%
Human Resources3%
Finance & Accounting
4%
Customer service10%
Logistics42%
Product engineering
7%
Source: PwC
BPO Segment Growth Rates
2005 2006E 2007E 2008E 2009E 05-09 CAGRHuman Resources 13,009 15,128 17,651 20,614 23,915 12.9%Finance & Accounting 14,358 16,405 18,770 21,673 25,328 12.0%Customer service 40,619 46,357 52,165 59,321 66,843 10.5%Logistics 178,731 198,769 221,494 248,129 280,034 9.4%Sales & Marketing 146,526 156,836 165,967 175,131 187,781 5.1%Product engineering 27,313 32,789 38,819 45,424 53,037 14.2%Procurement 583 708 862 1,056 1,291 17.2%Training 1,333 1,738 2,160 2,725 3,002 17.6%
Total 422,472 468,730 517,888 574,073 641,231 8.7%
Source: Morgan Stanley
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
Source: PWC Report: The Evolution of BPO in India – April 2005
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
India – HR Related IssuesTrends What can vCustomer do?
Increased Attrition
- 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
- Use competency approach (skill tests)
- Use realistic job-previews
- Join NASSCOM skill registry
Industry
Repositioning
- 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
• Specific recruiting considerations:• Creating brand recognition to attract
potential candidates• Ensuring “fit” between new hire and
company• Essential to evaluate employee
competencies
Objectives
Key Issues
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: 7,500-8,000
• 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/B39690605outsourcing.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