Contact Center Outsourcing Annual Report 2016 The Rise of Digi PDF

Contact Center Outsourcing Annual Report 2016: The Rise of
Digital Contact Centers – Clear Evidence that Real Change is

Underway
Contact Center Outsourcing (CCO)
Annual Report – July 2016
Copyright © 2016 Everest Global, Inc.

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How to read this document
Information desired Where/how to locate the information
Summary of key  The section on key messages summarizes the CCO market insights
messages  The key messages are categorized along three dimensions:
– Market size and buyer adoption
– Value proposition and solution characteristics
– Service provider landscape
Key facts or analyses  A section is devoted to each dimension of the summary of key messages (listed
related to a specific above)
topic  Each section contains detailed charts on relevant topics within each dimension
 Refer to the table of contents (pages 4 and 5) to identify relevant topics covered
within each section
 Summary pages at the beginning of each section cover the key trends
Outlook for 2016-2017  The section provides Everest Group’s outlook on the CCO market for 2016-2017
Definitions of  Acronyms or technical outsourcing terms are defined in the glossary of terms
unfamiliar terms and (Appendix)
related research  Refer to the related Everest Group CCO research publications listed in references
(Appendix)
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Table of contents (page 1 of 2)
Topic Page no.

Introduction and overview 6
Summary of key messages 13
Section I: Market size and buyer adoption 16

 Summary 17
 Market size and growth 18
 Market Trends: 19
– Growth of outsourcing 19
– Evolving buyer requirements 20
 Contract characteristics: 23
– Contract activity 23
– Sourcing model adoption 24
– Contract scope 25
 Adoption trends by: 26
– Buyer industry 26
– Buyer geography 27
– Languages supported 29
– Buyer size 30
Section II: Value proposition and solution characteristics 31

 Summary 32
 Digital transformation of contact center 34

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Table of contents (page 2 of 2)
Topic Page no.

Section II: Value proposition and solution characteristics (continued)
 Value proposition 35
– Delivery model 36
– Channel mix 39
– Technology 42
– Automation 44
– Value-added services 46
– Pricing model 48
Section III: Service provider landscape 50

 Summary 51
 Service provider classification 52
 Service provider growth rate by player segment 53
 CCO market share 54
 Leading service providers by geography 55
 Leading service providers by industry 56
 Service provider investments 57
Outlook for 2016-2017 62
Appendix 65
 Publicly-announced contracts in 2015 66
 Glossary of terms 68
 CCO research calendar 70
 References 71

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Contents
 Introduction and overview
 Summary of key messages
 Market size and buyer adoption
 Solution characteristics
 Service provider landscape
 Outlook for 2016-2017
 Appendix

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Our research methodology is based on four pillars of strength
to produce actionable and insightful research for the industry
 Market thought leadership

 Actionable and insightful research
 Syndicated and custom research deliverables
1 2 3 4
Robust definitions and Primary sources of Diverse set of market Fact-based research
frameworks information touch-points
Total Value Equation
Strategic focus
Impact on cost of process
High
Impact on efficiency or
10x effectiveness of process
Impact on value
proposition to market
Process expertise
Service
Enterprises Providers
1x
Services
0.1x
Industry
Low
Low High
Domain expertise
Proprietary & Confidential. © 2011, Everest Global, Inc. 8 Service

Enablers
 Proprietary contractual database of 1,000+ CCO contracts (updated annually)

 Round-the-year tracking of 20+ service providers in the CCO space
 Dedicated team for BPO research, spread over two continents
 Over 20 years’ experience of advising clients on CCO-related decisions
 Executive-level relationships with buyers, service providers, technology providers, and industry associations

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Everest Group’s CCO research is based on multiple sources of
proprietary information (page 1 of 2)
1
 Proprietary database of 2,500+ CCO contracts (updated annually) Service providers covered in the analysis
 The database tracks the following elements of each CCO contract:
– Buyer details including industry, size, and signing region
– Contract details including Total Contract Value (TCV), Annualized
Contract Value (ACV), term, start date, service provider FTEs, and
pricing structure
– Scope including buyer geography and functional activities
– Technology including Customer Relationship Management (CRM)
technology, communication technology, and enabler technology
ownership & maintenance
– Global sourcing including delivery locations and level of offshoring
2
 Proprietary database of operational capability of 25+ CCO service
providers (updated annually)
 The database tracks the following capability elements for each service
provider
– Key leaders
– Major CCO clients and recent wins
– Overall revenue, total FTEs, and contact center employees
– Recent contact center-related developments
– CCO revenue split by geography, industry, and client size
– CCO delivery locations
– CCO service suite
– Contact center-related technology capability
Confidentiality: Everest Group takes its confidentiality pledge very seriously. Any information, which is contract specific, will only be presented back to the industry in an
aggregated fashion

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Everest Group’s CCO research is based on multiple sources of
proprietary information (page 2 of 2)
3
Buyer surveys and interactions
Global survey and one-on-one executive-level interviews are undertaken to understand how organizations perceive
performance of their CCO provider. The survey/interviews focus on different aspects of an outsourcing relationship including:
 Key drivers for outsourcing CCO
 Contract details (including process scope, signing year, and duration)
 Overall performance of the service provider including key strengths and improvement areas
 Detailed assessment of service provider performance across different elements, such as:
– Performance against key CCO metrics
– Performance across various contact center processes
– Performance during the implementation and transition phases
– Governance and relationship management

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Everest Group’s definition of the CCO market is centered on
the delivery aspects of customer interaction
Contact center pyramid Strategy

Value-added services
Operational services
Strategy
Channel management
 Traditional CCO, primarily
Customer analytics focused on individual
Customer retention management operational services
Performance management & reporting  Now, value-added services are
Outbound sales services increasingly being included in
CCO
Inbound sales services
Order fulfillment and transaction processing
Payment collections
Customer service
Customer interaction technology
 Everest Group defines the CCO market to include engagements which primarily support all forms of direct and indirect (or in
support of direct) interactions with customers, external and internal to the buyer organization, involving a structured multi-
channel and remote communication environment
 CCO does not include contact center services embedded within the scope of outsourcing engagements targeting processes
other than customer care, such as IT Outsourcing (ITO) or Human Resources Outsourcing (HRO)
Source: Everest Group (2016)

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We break each element into subprocesses of the customer
interaction value chain
Strategy (in-house) Strategy

 Contact center sourcing strategy
 Alignment of contact center
strategy with corporate strategy Operational services
Strategy
Channel management
 Channel mix Customer retention
 Customer data integration and management
Channel management
analysis  Customer lifecycle management
 Contact handling and routing Customer analytics  Customer experience
Customer retention management management

Customer analytics  Loyalty programs
 Customer profiling and
Performance management & reporting
segmentation Outbound sales services
 Big data / social media Inbound sales services Performance management &
monitoring and analysis reporting
 Customer satisfaction tracking
Order fulfillment and transaction processing
 SLA adherence
Payment collections  Key performance metrics
Customer interaction Customer service  Performance optimization
technology  Operational and management
Customer interaction technology
 Technology adoption strategy reporting
 Solution hosting, maintenance,
and support
Outbound sales Inbound sales Order fulfillment and Payment collections Customer service
services services transaction processing  Early-stage collections  Outbound service
 Outbound sales  Inbound sales  Order management – Channel identification – Query resolution / call-backs
– Telesales  Cross- / up-selling – Order validation – Customer loyalty  Inbound service
– Telemarketing – Order entry maintenance – Technology support / helpdesk
 Data management – Order processing  Late-stage collections – Service support
– Data collection  Order amendment / exception – Customer-at-risk analysis – Complaint handling
– Data cleansing handling – Customized treatment – Call escalation
and refresh  Product activation plan  General query handling
 Return/refund/rebate processing – Schedule-related enquiries
 Billing and delivery queries – General product or service
information requests

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Contents
 Appendix

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Summary of key messages (page 1 of 3)
Market size and buyer adoption
Stable growth and spend in CCO market Market size for CCO over time XX% CAGR
US$ billion
 The global CCO market grew at ~4% in 2015 to reach
US$75-78 billion, amounting to about a quarter of the total
global contact center spend 78-81
70-75 75-78
65-70
60-65
Rise of multi-geography and sole-source contracts 55-60
 As buyers look to consolidate their existing portfolio, a shift

towards fewer providers offering multi-geography and
sole-sourcing contracts has been observed in the last 12-18
months. However, when engaging new service providers,
buyers are looking to start with a smaller scope that grows
over time 2011 2012 2013 2014 2015 2016E
CCO revenue by industry over time (both new deals and renewals)
Highest growth in emerging geographies US$ billion
CAGR
 From a geography perspective, North America continues to 15-17 (2013-2015)
100% = 19-21
grab the largest portion of the CCO pie and will remain so 5-10%
Others1 9% 10%
for quite some time. Emerging geographies such as Asia Travel & hospitality 3% 4% 10-15%
Pacific, Middle East, and Latin America continue to drive Retail 5% 6%
Healthcare 8% 5-10%
the highest growth and present significant new opportunities 10%
Media 5%
5% 10-15%
Government 5%
6%
New economy buyers drive adoption of CCO Technology 10%
11% 5-10%
 Market growth is being driven from industries such as <5%
BFSI 17%
healthcare and travel & hospitality, while telecom and 17%
5-10%
banking, financial services & insurance (BFSI) continue to
<5%
dominate the market. New economy buyers within these 32%
Telecom 31%
industries, that usually fall in the mid- and large-sized <5%
category, will be the torch bearers for growth in the future

2013 2015

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Solution characteristics
Transition of contact center to digital-era Value proposition Solution characteristics

 The value-proposition and solution characteristics of
Delivery 1
digitally transformed contact center have evolved focusing Delivery Focus on quality, rather than cost containment, has led
process to the adoption of a balanced onshore-nearshore-
model
on six solution characteristics – delivery model, channel excellence offshore delivery model
mix, technology, automation, value-added services, and 2
Channel mix Shift from voice-only contact center solutions to multi-
pricing model channel contact center with increased adoption of new-
age channels
Rise of onshoring activity to enhance experience Building 3
Technology Focus has shifted from CRM and communication
 To enable the best service quality, clients are actively digital technology to enabler technologies such as automation,
capabilities analytics, and social media
demanding higher onshore delivery capabilities. It has also
4
led to a growth in adoption of work-at-home agents model Automation Forward-looking solutions such as cognitive automation
and proactive customer outreach to increase service
quality and delight customers
Growth of digital channels in new contracts 5
 As mobile and Internet penetration increases globally, the Value-added The scope of CCO deals is expanding beyond
Enhancing services operational processes to include value-added processes
shift to digital channels such as social media and chat is business 6
being observed in the market, which is evident by the fact value Pricing Building non-linear, mutually beneficial pricing
/outcomes model structures, which reward service delivery that matches
that these two channels are the fastest growing and buyer expectations
account for 10% of the total revenue
Pricing structure in new CCO contracts over time
2012-2013 2014-2015
Inclusion within contracts
Increased adoption of enabler technologies
83% 82%
 Also, as service providers grapple with the challenge to
serve their customers using smarter solutions, they are
actively investing in enabler technologies such as
automation, analytics, and multi-channel capabilities. The
31%
same has also resulted in higher inclusion of value-added 20%
services in contracts, with more than 60% of contracts 13%
6%
having at least one of VAS within scope
FTE-based Transaction-based Outcome-based

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Service provider landscape
BPO pure-plays offering CCO saw higher growth 2015 CCO service provider revenue
Revenue in US$ billion Growth rate
 The CCO service provider landscape is broadly divided
(2014-2015)
into CCO specialists, BPO pure-plays, and integrated
IT+BPO players Teleperformance ~3.7 <5%
 Among these, CCO specialists dominate the market and Convergys ~3.0 <5%
are the largest in terms of sheer size, but have witnessed
Atento ~2.0 <5%
slowing growth in the past 12-18 months. BPO pure-plays
on the other hand, with a focus on delivering CCO as part Sitel ~1.4 <5%
of an integrated BPO offering, have been witnessing the Concentrix ~1.3 15-20%
highest growth in the market Sykes ~1.3
CCO <5%
specialists
Alorica ~1.2 95-100%
Targeted vertical and geography focus
 Service providers have a targeted focus with respect to TeleTech ~1.0 <5%
geography and industries, as evident by the fact that EGS ~1.0 <5%
except Teleperformance, no other service provider
Contax ~0.9 <5%
dominated all the geographies and key industries in 2015
Webhelp ~0.8 10-15%
Ramped up investments in scale and technology Transcom ~0.7 <5%

 Service providers continue to invest in building their scale
IT+BPO HPE ~0.6 <5%
and technology portfolio to meet evolving buyer players Dell ~0.5 5-10%
requirements. Enabler technologies have taken center
stage from a CCO investments perspective, accounting for Xerox ~1.6 <5%
almost half of the investments reported by providers in the Capita ~1.1 5-10%
last two years. Within enabler technologies, analytics, BPO pure-
Sutherland ~0.8 10-15%
automation, multi-channel solutions, and social media are plays
the leading investment themes Aegis ~0.5 <5%
Firstsource ~0.5 <5%

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Contents

– Summary
– Market size and growth
– Market trends
– Contract characteristics
– Adoption trends
 By buyer industry
 By buyer geography
 By languages supported
 By buyer size
 Appendix

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Market size and buyer adoption – summary
CCO global market size and growth

 The global CCO market grew at ~4% in 2015 to reach US$75-78 billion, with the overall global contact center spend standing at
US$300-350 billion
 Year 2015 witnessed larger buyers shifting their focus towards consolidating their portfolio and having fewer service providers for their
outsourcing needs. This was also indicated by buyers moving towards sole-source contracts instead of competitive bids
 Market witnessed growth in signings of multi-region contracts, as buyers aim to deliver consistent experience to their end-customers
across regions
 Buyer expectations from service providers continued to shift from labor arbitrage to enhanced capabilities along with flexibility and agility.
Also, they expect service providers to improve on value-driven KPIs such as increased role of analytics, proactiveness, and innovation
 The deal size for both new contracts and renewals witnessed a decline in 2015 due to buyers’ inclination to start with smaller scope that
grows over time, as well as inclusion of automation bringing down the cost of servicing. Also, with higher leverage of low-cost non-voice
channels, overall spending has decreased
Buyer adoption trends

 BFSI and telecom continue to be leading adopters of CCO services with about 50% of the market share. Retail and travel & hospitality
verticals have witnessed double-digit growth, while healthcare vertical has plateaued after witnessing steep growth over the past few
years
 While the mature markets of North America, Western Europe, and United Kingdom continue to grow at market rates, faster growth came
from Asia Pacific, Middle East, and Latin America. Countries such as China and India are driving business from “new economy” buyers,
who are leveraging customer service to win new customers as well as retain existing ones
 English continues to hold its dominant position as being the most preferred language for CCO delivery. Growth in Middle East as well as
countries in Asia Pacific has resulted in demand for CCO delivery in local languages from these regions, spurring growth in demand for
languages such as Chinese, Korean, Arabic, and other dialects from Middle East and Africa
 Large and very large buyers account for over 70% of the CCO revenue. However, market growth is driven by medium and large buyers
who have adopted aggressive expansion strategies across new geographies, as well as scaling up of their existing operations

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CCO market size and growth
The global CCO market grew at ~4% in 2015 to reach US$75-78 billion, accounting
for ~25% of the total contact center spend
Market size for CCO over time Overall contact center spend in 2015
US$ billion US$ billion
XX% CAGR
100% = 300-320
78-81
70-75 75-78
65-70
60-65
55-60
Outsourced ~25% ~75% In-house /

GICs
2011 2012 2013 2014 2015 2016E
Key reasons for declining market growth rate in 2014-2015:

 Increasing share of non-voice channels that entail lower cost per contact than voice channels
 Growing portfolio consolidation by buyers, which leads to a couple of years of relatively moderate growth rates
 With the advent of automation, service providers are moving away from traditional FTE-based business to stay relevant in the
market. This move entails a brief spell of low growth, which is expected to persist until providers reach maturity with the new
technology. Post this phase, growth is again expected to pick up in a few years

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Market trends | Growth of outsourcing
CCO players offer solutions and capabilities that many in-house centers lack, driving
further penetration of outsourcing in the market
Contact center sourcing mix over time

US$ billion
Key reasons for increasing share of outsourcing
CAGR  The CCO industry has evolved from low complexity
100% = 280-300 300-320 (2010-2015) transactional work to include a broad range of services that
drive the overall customer experience
Outsourcing 22% 25%  Outsourcing providers are gaining share globally in the
contact center market, driven by delivering greater value
than in-house centers:
– Third-party service providers bring best-of-breed
technology – such as analytics, automation, and
interaction solutions – that drives better efficiency and
effectiveness; many in-house centers may not have
access to such technologies and may also lack
experience using them
In-house 78% 75% – Most in-house centers lag CCO providers in managing
non-voice channels and value-added services
– Fast expansion of CCO in emerging buyer geographies
with low market penetration enables buyers to adopt
more advanced approaches quickly
– Service providers also typically have a broader
knowledge base for innovation than in-house centers,
leveraging best practices from experiences across
2010 2015 multiple buyers to improve customer satisfaction

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Market trends | Evolving buyer requirements (page 1 of 3)
When outsourcing, buyers are looking beyond cost reduction and place more
importance on factors such as gaining specific expertise and operational scalability
Key factors behind outsourcing 2014

Excerpts from buyers’ feedback
Importance on a scale of 1 to 5 2015
3.9
Cost reduction
3.7
2.7
Gaining specific expertise
lacked in-house
3.3
3.0
Improving agility/flexibility
3.1
Not Significantly
important important
Sample size: 78 buyer feedback surveys and interviews conducted between January 2014 till December 2015

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Buyers expect service providers to improve their performance around pro-activeness,
better insights, and innovation
Service provider KPIs

Rating on a scale of 1 to 5
Responsiveness 4.4  Buyers rated service providers highly on

traditional Key Performance Indicators
(KPIs)
Relationship  This indicates that providers are doing well
Traditional 4.4
management with respect to explicit and mutually
KPIs
agreed upon performance criteria
Implementation 4.2
 Buyers rated their incumbent providers

relatively lower on emerging performance
Proactiveness 3.8 criteria
 These are not explicitly stated in contract
agreements but have increasingly become
New age Better insights/ important in response to evolving buyer
KPIs 3.7
analytics needs
 Buyers expect service providers to perform
beyond the traditional KPIs and contribute
Innovation 3.7 towards better customer experience
Poor Excellent
performance performance

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Buyer perception of CCO providers heavily impacted by three key emerging KPIs:
relationship management, proactiveness, and innovation
Impact of individual KPI ratings on the overall performance of service providers1

Rating on a scale of 1 to 5 Low High
KPIs 2014 2015 Results based on annual buyer feedback surveys

2014-2015
 The relevance of key performance metrics increased
Responsiveness from one year to the next, and heavily impacted
buyers’ ratings of overall service provider performance;
these include relationship management, proactiveness,
Relationship
and innovation
management
 The growing relevance of emerging KPIs on the
Implementation overall rating indicates that buyers are increasingly
evaluating service providers on these new-age metrics
in addition to more traditional SLAs
Better insights / analytics
 Buyers expect service providers to proactively pitch for
innovative ideas in contact center operations and
capabilities
Proactiveness
 The impact of implementation on overall rating has
decreased in 2015, suggesting that smooth transition
Innovation and high quality implementation has become table-
stakes in the market
1 Based on the correlation coefficient between individual KPI ratings and overall ratings

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Contract characteristics | Contract activity
The size of both new contracts and renewals has shrunk in the last 18-24 months;
TCV of renewals/extension now stands at three times that of new contracts
Average TCV of CCO contracts (new) Average TCV of CCO contracts (renewals/extensions)
US$ million US$ million
49
39
32
24
15 13
2009-2011 2012-2013 2014-2015 2009-2011 2012-2013 2014-2015
 As buyers increasingly look at testing the waters with providers for new contracts, they start with a smaller scope that grows
over time. This has resulted in the size of new contracts going down over the last few years
 The size of renewals/extensions now stands at almost three times the size of new contracts, mainly due to the following
factors:
– As emphasis on digital services has expanded, scope of existing engagement during renewals has gone up with addition of
value-added services and non-voice channels
– Existing buyers are rationalizing the number of service providers in their portfolio, leading to larger contract size during
renewals and extensions
 TCV of renewals/extensions has also seen a decline in the past 18-24 months, as buyers put more emphasis on automation
and RPA, which impacts the FTE headcount required within the scope of the contract, thus reducing costs for the buyers.
Also, with advancement of technology that allows multi-channel solutions, more customer queries are now being transferred
to lower-cost channels such as chat

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Contract characteristics | Sourcing model adoption
Sole-source contracts have increased, indicating deeper relationships of buyers with
individual service providers compared to price-sensitive bidding scenarios
Sourcing model for CCO contracts over time

Percentage
 The share of sole-source contracts

Industries adopting
doubled in 2014-2015, which indicates
sourcing model1
that existing relationships between
 BFSI buyers and service providers continue to
55%  Telecom be strong. More contracts are being
 Healthcare signed by buyers based on prior
successful relationships with service
Competitive 78%
providers
 This trend also reiterates the fact that the
TCV of extension/renewal contracts is
Industries adopting increasing, which is also an indicator of
sourcing model1 growing confidence among buyers with
existing relationships
 Energy & utilities  The contracts with competitive sourcing
45%  Manufacturing model have witnessed a decrease over
 Technology the years, which leads to a balance in
Sole-source 22% sourcing model within CCO
2012-2013 2014-2015
1 Industries with more than 70% of contracts adopting the sourcing model
Sample size: 896 CCO contracts signed between January 2012 to December 2015

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Contract characteristics | Contract scope
As buyers consolidate their service provider portfolio, they look to serve multiple
geographies using the same service provider
Distribution of CCO contracts across buyer geography

Number of contracts
100% = 1815 502 146

 As buyers expand across multiple
Multiple regions 10% 12% geographies around the globe, they are
20% increasingly looking at using the same
service providers across regions for their
CCO operations
 This makes it easier for buyers to

manage their operations across different
regions by having consistent SLAs and
Single region 90% 88% operational parameters with regional
80%
variations
 It also allows buyers to offer a consistent

experience to their end-customers
irrespective of the region, and thus drive
higher customer satisfaction
Till 2012 2013-2014 2015
Sample size: 2,463 CCO contracts signed till December 2015


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CCO adoption by buyer industry
Growth in CCO adoption is being led by verticals such as retail, healthcare, and travel,
while growth in mature verticals such as telecom and BFSI has slowed down
CCO revenue by industry over time (both new deals and renewals)
US$ billion
CAGR
100% = 15-17 19-21 (2013-2015)  Travel & hospitality continues to experience
healthy growth in CCO adoption, led by Online
Travel Agencies (OTAs) and airlines
Others1 9% 10% 5-10%
Travel & hospitality 3% 4%  Surge in CCO within online retailers, especially
Retail 5% 6% 10-15%
within developing economies, is driving growth in
Healthcare 8% retail
10% 5-10%
Media 5%
Government 5%
5%
10-15% • The surge in CCO adoption in healthcare due to
6% the introduction of Affordable Care Act (ACA) in
Technology 10% the United States in 2012-2013 has settled now,
11% 5-10%
but the vertical continues to see steady growth
BFSI 17% <5%
17%  BFSI has seen flat growth, resulting in loss of
5-10% market share in the last 12-24 months
 Though telecom continues to be the largest CCO
<5% vertical, high cost pressure on players has led to
Telecom 32% 31% controlled outsourcing spend and below market
<5% growth rate for the vertical
 With telecom and BFSI being the oldest and the
most penetrated industries for CCO, growth
2013 2015 opportunity in these verticals is relatively lower
1 Others include energy & utilities, logistics, manufacturing, and professional services
Note: Based on the capability assessment of 25+ service providers covered in this analysis (refer to page 8 for a complete list)

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CCO adoption by buyer geography
North America continues to be the largest and the most important market for CCO;
growth in emerging geographies slowed in 2015 due to depreciating local currencies
CCO revenue by signing region over time (both new deals and renewals)
US$ billion
CAGR
 Latin America and Asia Pacific posted lower than expected
100% = 15-17 19-21 (2013-2015)
growth rates in 2015 due to depreciation of local currencies
against the US dollar, but otherwise posted high to moderate
LATAM 11% 10% <5% growth, over the last two years, when excluding currency effects
 China witnessed huge surge in demand, driven by adoption by
APAC 11% 12% MNC buyers who leveraged outsourcing in other regions, as well
5-10%
as by local buyers to compete with global brands
UK 13% 13%
~5%  United Kingdom continues to grow at just above market rate,
driven by public sector spending
CEMEA1 18% 18%
 While Continental Europe saw consolidation with several large
5-10% firms such as Capita and Webhelp picking up stake in smaller
ones, Middle East provided ample growth opportunities, as more
buyers tap into the markets in this region to drive their business
 North America continues to be the biggest market for CCO and

North America 48% 47% <5% posted a close to average market growth rate
 The importance of the market is highlighted by the fact that most
of the big-ticket M&As have been driven by focus on the North
American market
 With emphasis on onshoring and advancement in technology
2013 2015 resulting in higher agent efficiency, North America has managed
to maintain its growth rate in recent years
1 Continental Europe, Middle East, and Africa

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CCO adoption by buyer geography – focus on China
China is one of the fastest growing CCO markets globally and service providers are
keen to expand their delivery footprint over the region
China CCO market size China CCO market size by FTEs

US$ billion Number of FTEs in ‘000
CAGR CAGR
1.8-2.0 120-130
0.9-1.1 65-70
2010 2015 2010 2015
Major drivers of CCO in China

 Cost containment in core areas: CCO reduces cost of labor, technology and facilities through economies of scale and
typically labor arbitrage. Buyers can improve the focus on core operations by outsourcing
 Technology requirements: Service providers offer cutting edge technology services that help Chinese companies to
improve their customer service dramatically without any lapse of time through investment
 Focus on customer satisfaction: China’s CCO providers can support businesses navigating the country’s growing
consumer-centric culture by sharing best-practices from across their portfolios
 Leveraging global delivery: Global service providers are expanding presence in China to support Chinese operations for
existing MNC buyers, highlighting the advantages of a global delivery model

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CCO adoption by language
Asian and other languages have seen strong growth in the last 12-18 months, while
English language continues to account for more than half of CCO FTEs
Scale of languages supported

Number of FTEs in ‘000s
CAGR
100% = 750-800 850-900 (2013-2015)
Others1 2% 2% 15-25%  The strong growth momentum from Middle East

Asian languages2 10% 11% and Africa has resulted in healthy growth of other
5-10% languages over the last 18-24 months
European 5-10%  Asian languages were put on a high growth

34% 35%
languages3 trajectory by rise in CCO activity in China, which
also acts as a delivery location for other Asian
languages such as Korean and Japanese
 With key markets for English growing at

moderately, English continues to hold its
dominant position, however, its share has come
English 54% 52% <5% down in recent years
2013 2015
1 Others include Middle Eastern and African languages

2 Asian languages include Korean, Japanese, Mandarin, Cantonese, Indonesian, Vietnamese, Thai, Hindi, and other regional Indian languages
3 European languages include Spanish, Portuguese, French, Dutch, Danish, Russian, Norwegian, Nordic, Swedish, etc.

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CCO adoption by buyer size
Mid- and large-sized buyers are driving growth in the market, with contract activity for
small and very large buyers having slowed down
CCO revenue by buyer size over time (both new deals and renewals)
US$ billion
CAGR
100% = 16-18 19-21 (2013-2015)
 Revenue from small buyers grew at market rate,
15% driven by relatively small-sized service providers
Small buyers4 17% <5%
looking to expand their business by tapping such
clients
Mid-sized buyers3 15% 16% 5-10%
 Mid-sized and large buyers are leading the overall
growth in the market, driven by new economy
Large buyers2 19% 20% 5-10% companies that are leveraging customer service
to attract new customers and retain existing ones
 Very large buyers account for the highest market

share but witnessed the slowest growth, reflected
Very large buyers1 49% 49% <5% by the maturity of this buyer segment. New
growth in this buyer segment is being driven by
expansion of operations of these clients across
new markets such as China, Southeast Asia, and
Latin America
2013 2015
1 Very large buyers have revenue in excess of US$10 billion
2 Large buyers have revenue between US$5-10 billion
3 Mid-sized buyers have revenue between US$1-5 billion
4 Small buyers have revenue less than US$1 billion

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Contents
– Summary
– Delivery model
– Channel mix
– Technology
– Automation
– Value-added process
– Pricing model
 Appendix

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Value proposition and solution characteristics – summary
(page 1 of 2)
Value proposition
 In the digital age, changing customer preferences have resulted in focus beyond process excellence by
building digital capabilities and enhancing business outcomes
 There are six CCO solution characteristics that are driving this digital transformation – delivery model,
channel mix, value-added services, technology, automation and pricing model – as discussed below
Delivery model
 The delivery model has changed with more contracts having significant onshore delivery in response to the
growing demand of buyers to focus on customer experience and their expectation to have agents closer to
home
 The increased demand for onshore presence can also potentially increase the total cost of ownership for
buyers. They increasingly look for solutions such as WAHA, multi-channel adoption, and automation that
would reduce costs while ensuring high quality of customer service
 With technology advancements ensuring enhanced security and ease of implementation, buyers now
consider including WAHA delivery model in their CCO strategy
Channel mix
 While the share of voice channel has reduced over time, newer channels such as social media and chat
have witnessed high growth and now account for over 10% of the overall CCO revenue
 Multi-channel contracts accounted for nearly one-fourth of the total CCO contracts in which clearly
indicates the changing consumer preference to connect through multiple channels.
 Not surprisingly, inclusion of non-voice channels, especially chat, has grown rapidly within multi-channel
contracts in the past two years
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Value proposition and solution characteristics – summary
(page 2 of 2)
Technology
 Enabler technology investments continue to increase with the share rising to three-fourths of technology
investments
 Among enabler technologies, investments in automation, analytics and multi-channel solutions have
increased significantly in the past two years
Automation
 Increased adoption of advanced automation technologies has led to lower cost of ownership, reduction of
average resolution time, and increased customer delight for buyers
 The forward-looking automation solutions such as cognitive technology have maximum impact in customer
experience
 Inclusion of value-added services continues to grow steadily with more than 60% of contracts signed in
2014-15 having at least one of the value-added services within scope
 Compared to new contracts, renewals/extensions saw a much higher inclusion of value-added services
(44% vs. 70% for renewals)
Pricing model
 With the evolution of digital customer care, outcome-based pricing has become more relevant for buyers
and service providers
 Contracts with outcome-based pricing have more than doubled among new contracts, which indicates that
buyers increasingly adopt sophisticated KPIs to align pricing with service quality
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Digital transformation of contact center
As customer preferences are changing, buyers should focus beyond process excellence
by building digital capabilities and enhancing business outcomes
Evolving customer needs
Prompt and accurate issue

Multi-channel support Self-service Personalized experience
resolution
Customers Support across Preference for Customers

expect agents to emerging SELF self-service over expect to receive
understand their channels such SERVICE contacting a only filtered
issues and as chat and support agent for information that
resolve them in a social media elementary may be relevant
shorter duration enquiries to them
of time
Changing value proposition to meet emerging customer needs
Delivering process excellence Building digital capabilities Enhancing business outcomes

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The changing CCO value proposition is shaping the following
solution trends to deliver superior experience preferred by
digital consumers
Value proposition Solution characteristics
1
Delivery process Delivery model Focus on quality, rather than cost containment, has led to the adoption of
excellence a balanced onshore-nearshore-offshore delivery model
2
Channel mix Shift from voice-only contact center solutions to multi-channel contact
center with increased adoption of new-age channels
3
Building digital Technology Focus has shifted from CRM and communication technology to enabler
capabilities technologies such as automation, analytics, and social media
4
Automation Forward-looking solutions such as cognitive automation and proactive
customer outreach to increase service quality and delight customers
5
Value-added The scope of CCO deals is expanding beyond operational processes to
Enhancing services include value-added processes
business value
6
/outcomes Pricing model Building non-linear, mutually beneficial pricing structures, which reward
service delivery that matches buyer expectations
The following pages describe the above solution trends in more detail

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Delivery model (page 1 of 3)
Contracts with significant onshore delivery are constantly increasing, as buyers prefer
agents close to customers in a bid to enhance experience 1
Distribution of CCO contracts with offshore/nearshore components

Number of contracts
100% = 477 763 377  The delivery mix has been constantly
changing over the last five years to a balanced
model between onshore and offshore,
because of increased strategic priority of
Significant buyers towards customer retention than cost
35%
onshore delivery1 reduction. Low quality of service is considered
49% 53% to be the main reason for increasing buyer
preference for onshore contact centers
 However, as there is growing demand for

onshore delivery, buyers would also face
increase in total cost of ownership. Hence,
Predominantly they increasingly prefer multi-channel
offshore delivery2 65% contracts and automation solutions in a bid to
51% 47% reduce costs and increase service quality
 WAHA is also an option which buyers consider

as an alternative to increase in onshoring, as it
involves lesser cost of operations than
2008-2010 2011-2013 2014-2015 onshore FTEs
1 Contracts with more than 25% FTEs located in onshore locations

2 Contracts with more than 75% FTEs located in offshore/nearshore locations
Sample size: 1,617 CCO contracts signed between January 2008 and December 2015

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Delivery model – focus on WAHA (page 2 of 3)
With increased need for onshoring, buyers are open to including WAHA delivery
model in their CCO strategy 1
Factors driving WAHA adoption Key considerations for buyers
1
Fluctuations in staff requirements
Fluctuations in staff requirements Ensure alignment between strategy and

perceived success of implementation
As WAHA might
not be suitable
2 for all
Security and compliance
businesses,
Adopt security and compliance requirements
Increased onshoring requirements buyers should
with regards to customer data and agent
carefully assess
monitoring & authentication tools
the feasibility of
its adoption by
3 evaluating their
WAHA delivery model
business model,
Access to specialized talent The choice of delivery model - whether hub and
the risks
spoke, virtual, or hybrid will impact the scope of
associated, and
available WAHA capabilities
the value
derived by its
4
Company culture inclusion
Source talent from any location Familiarity and experience in managing a

remote workforce is necessary to fit WAHA into
organizational culture

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Delivery model – focus on WAHA (page 3 of 3)
The scale of WAHA delivery consists of pure-play WAHA providers and traditional
CCO providers 1
WAHA scale across leading service providers

Number of FTEs
Working Solutions 6,000  Pure-play WAHA providers have
WAHA model at the core of their
Arise 5,000
Pure-play business, with typically driving
WAHA Live Ops 5,000 more than 95% of their CCO
providers revenue through it
VIP Desk 4,000  Currently, about 25,000 WAHA
Kelly OCG 2,500 agents are employed by pure play
providers
Sykes 7,500
Alorica 7,000
Convergys 2,750
Sitel 2,100
 Traditional CCO providers have
Traditional Teletech 2,100
invested in WAHA model to
CCO
Teleperformance 2,000 supplement their brick & mortar
providers
model, with typically driving less
Concentrix 2,000 than 10% of their revenue through
Sutherland 1,650 WAHA
 Approximately, 30,000 WAHA
CGI 1,500 agents are employed by traditional
Xerox service providers
1,200

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Channel mix (page 1 of 3)
Voice channel has witnessed slow growth, while chat and social media channels now
cumulatively account for over 10% of the overall revenue 2
CCO revenue across channels over time

US$ billion
CAGR
100% = 14-16 17-18 19-21 (2011-2015)
Non-voice
Social media  Chat and social media have been

1%
3% 3% 4% 45%
Chat 4% the fastest growing channels in
E-mail 7% 7% 51% recent years, driven by increased
9% penetration of mobile and Internet
10% 21% devices
 Together, these channels now
constitute more than 10% of the
total CCO revenue
 E-mail continues to grow at a

Voice 89% healthy pace of 20-25% and is the
84%
78% 4% largest non-voice channel with over
10% share in total revenue
 Though voice continues to be the

primary channel of customer
interaction, it’s share dropped to
below 80% for the first time in 2015
2011 2013 2015

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Adoption of multi-channel contracts is gaining momentum, driven by changing
consumer preferences to connect through multiple channels 2
Adoption of multi-channel CCO contracts over time

Number of contracts
100% = 2,086 377
More than
23% 26%
two channels  Multi-channel contracts have steadily
increased over the past five years
 Around one-third of contracts signed in 2015

were multi-channel contracts, which clearly
indicates changing consumer preferences to
connect more through non-voice channels
One/two 77%
channels 74%  As buyers and service providers acknowledge
this trend, they increasingly adopt multi-
channel solutions within the scope of
contracts, that includes new-age channels
such as chat and social media
Till 2013 2014-2015


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Among multi-channel contracts, inclusion of new-age channels such as social media
and chat has grown rapidly in last few years 2
Inclusion of channels within multi-channel contracts Till 2013

Number of multi-channel contracts 2014-2015
 Voice continues to be the

Social 12% dominant channel included
media within multi-channel contracts
15%
New-age
 The inclusion of voice and email
channels
has decreased recently,
48% indicating the shift of consumer
Chat
58% preferences towards chat and
social media
88%  New-age channels such as

Email social media and chat have seen
83% maximum increase in inclusion
Traditional within multi-channel contracts
channels recently. It emphasizes
99% consumers’ growing preference
Voice for these new-age channels over
96% voice and email


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Technology (page 1 of 2)
There are three overarching technology categories in play in the CCO space – CRM
technology, communication technology, and enabler technology 3
CCO technology environment
Customer Relationship Management (CRM) technology
Enabler technology 1 Enabler technology 2 Enabler technology 3
Communication technology
CRM Communication Enabler

technology technology technology
Key Organize, automate, and Supports all access channels Facilitate better customer
objective synchronize all customer-facing that are used by customers experience by ensuring process
functions efficiency and quality of service
Technology Primarily proprietary, with some Mix of proprietary and Primarily proprietary, with some
ownership instances of partnership-led partnership-led instances of partnership-led
Maturity
High Medium to high Medium
level

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Technology (page 2 of 2)
The share of enabler technology among technology investments continues to
increase with more focus on analytics, multi-channel solutions and automation 3
CCO technology investments by category over time Enabler technology-related investments reported in
Percentage of investments 2014-2015
Number of instances
Enabler Others
tchnology 35%
12%
60%
72% Social media 12%
42% Analytics
Communication 40%
technology
Multi-channel 16%
26% solutions
CRM 19%
25% 18%
technology 14% 9%
Automation
2008-2010 2011-2013 2014-2015
 About three-quarters of the investments made by service providers were in enabler technologies with more focus on
strengthening analytics, social media, multi-channel and automation capabilities. Automation and multi-channel solutions
have seen significant rise in investments in the last 12-18 months. We discuss automation technologies in detail on slides 44
and 45
 While the share of CRM and communication technologies has declined from 65% to 27%, the share of enabler technologies
has more than doubled in the past five years
Sample size: Based on 150+ technology investments reported by service providers till December 2015

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Automation (page 1 of 2)
Among three types of automation solutions in CCO, the forward-looking automation
solutions have maximum impact on customer experience 4
Low High
High
Forward-looking automation
Automated post-service follow-up,
proactive consumer outreach, social
media monitoring, and notification
Assisted automation: Cognitive Emerging automation
Impact on technology that is able to learn the Self-service, virtual agents for
customer pattern of agent actions and recurring chats, robotic process automation,
experience issues over time and push relevant intelligent agent desktop interfaces
questions and responses that would and voice to text
be useful for conversations
Deflection of calls to completely
non-human interface, automating
time-consuming tasks to reduce Established automation
agents’ workload IVRs, ACDs and outbound e-
mail confirmations
Established older technology
solutions that were implemented
in contact center space long
before other process areas
Low Current adoption level High

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Automation (page 2 of 2)
The increased adoption of automation in CCO enables service providers to achieve
balance between cost-to-serve and customer satisfaction 4
Impact on CCO Benefits for buyers
1 Replacement of transactional jobs Transactional jobs would be replaced

reducing the total cost of ownership
Automation has led to reduction of repetitive tasks and empowers
agents to focus on solving complex customer problems
2 Automated text analysis and reply scripts First-level queries would be resolved much
faster reducing average resolution time
The text in e-mail and chat channels could be analyzed at the back-
end and automated reply scripts sent to customers
3 Proactive resolution of customer problems Results in customer delight, which

strengthens brand loyalty
Automation systems could also predict customers’ problems and
proactively solve them even before the customers realize them
4 Advanced information security Fraudulent activities would be reduced,

which would ensure information security
Processes which involve obtaining confidential customer information
could be automated without manual agent intervention
5 Artificial intelligence as virtual agents Improved flexibility/agility to dramatically

increase/reduce the number of agents
Virtual robots would be able to answer second-level queries that
involve deep probing and background analysis

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Value-added services (page 1 of 2)
Contracts with renewals/extensions have more value added services
included in the scope than in new contracts 5
Inclusion of value-added services1 in CCO contracts Inclusion of value-added services1 in CCO contracts
Percentage of contracts Percentage of contracts
New contracts
Renewals/extensions
Till 2010 42% 70%

64%
44% 43% 44%

2011-2013 57%
35%
2014-2015 62%
Till 2010 2011-2013 2014-2015
 Inclusion of value-added services within CCO contracts continues to grow at a steady rate, wherein more than 60% of
contracts signed in 2014-2015 have at least one of the value-added services within scope
 Contracts with renewals/extensions had greater inclusion of value-added services. As these services are relatively complex in
nature, buyers tend to include them mostly in cases of renewals/extension contracts, since buyer confidence is higher when
engaging with service providers where they have prior successful relationship
1 Value-added services include performance management, customer retention, customer analytics, and channel management

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Value-added services (page 2 of 2)
Customer retention and customer analytics have seen maximum growth in
inclusion among value-added services 5
Inclusion of value-added services within CCO contracts over time 2008-2011

Percentage of contracts 2012-2013
2014-2015
~1.5 X ~2.2 X
49% 48% ~2.2 X

46%
39%
36%
34%
~2.1 X
26%
22%
18% 19%
13%
9%
Performance management Customer retention Customer analytics Channel management
 All value-added processes have witnessed increased inclusion in contracts over the past few years
 While the inclusion of performance management and channel management has seen a steady growth, customer retention
and customer analytics has more than doubled in the past four years. This indicates the fact that buyers look beyond
outsourcing the traditional processes within CCO and expect that service providers have deep expertise in value-added
services in order to improve customer experience
Sample size: 1,617 CCO contracts signed between January 2008 and December 2015

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Pricing model (page 1 of 2)
Based on the level of pricing resource unit, there are four basic structures for
pricing in CCO 6
Typical options for pricing resource units Typical pricing structures in CCO
in outsourcing
Outcome-based pricing  Directly related to the
Based on the outcome achieved business
Business
by the service provider’s  Business outcome-oriented,
outcome
contribution (e.g., client not process-oriented
satisfaction and collections
achieved)
Transaction-based pricing
Based on the volume of output
(calls/e-mails) managed.
Additional/Reduced Resource  Aggregation or summary of
Charges (ARCs/RRCs) are also process activities
used to account for volume  Process groupings encourage
Process Process investment by service provider
fluctuations
output output to increase productivity
 Direct correlation to business
Fixed fee pricing drivers
Fixed fee for a pre-determined
volume of activity with a “dead
band”. Might include ARCs/RRCs
Input- / FTE-based pricing

 Strongly tied to cost drivers
Based on the service provider’s
 Direct correlation to “how” the
Process Process Process Process units of resource input to provide
process is performed
activity/input activity/input activity/input activity/input services (e.g., per executive
 Limited, if any, meaningful
deployed, and total call hours
correlation to business drivers
utilized)

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Pricing model (page 2 of 2)
More new contracts are being signed with outcome-based pricing, indicating
the evolution of pricing model to support the digital consumer experience 6
Pricing structure in new CCO contracts over time
Inclusion within contracts
2012-2013
83% 2014-2015
82%  Instances of FTE-based pricing, which is a
traditional pricing model, have reduced recently
among new contracts signed between 2012 and
2015
 Whereas, the adoption of outcome-based pricing

among new contracts more than doubled in 2014-
2015
 The increase in outcome-based pricing will

31% continue, as buyers are able to measure the
quality of service accurately through sophisticated
20% KPIs and align the outcome to the pricing
13%  As digital customer care evolves, the focus of
6% buyers is more on customer experience and,
hence, adoption of outcome-based pricing would
be more relevant for buyers and service providers
FTE-based Transaction-based Outcome-based
Sample size: 557 new CCO contracts signed between January 2012 and December 2015

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Contents
 Value proposition and solution characteristics

– Summary
– Service provider classification
– CCO market share
– Leading service providers by geography
– Leading service providers by industry
– Service provider investments
 Appendix

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Service provider landscape – summary
 The service provider landscape for CCO includes CCO specialists, BPO pure-plays, and integrated
IT+BPO players
 The market is dominated by CCO specialists, with nine specialists having revenue in excess of US$1
billion. Teleperformance, Convergys, and Atento are the top three service providers in the CCO space.
Xerox and Capita were the only non-CCO specialists with over US$1 billion in revenue
 The leading service providers in terms of market share differ significantly across geographies. Except for
Teleperformance, no other service provider is a top player across all the major geographies
 The mix of leading providers also changes across the key industry segments with variations across
telecom, BFSI, technology, healthcare, retail, and travel & hospitality. Teleperformance again featured
among the top players across all these industries
 Technology is the leading investment theme in CCO, followed by scale. Enabler technologies accounted
for about half of the reported investments in 2014-2015. Analytics, automation, and multi-channel tools
were the major areas of investments within enabler technologies
 Consolidation within CCO continued into 2015 as well, with some of the big scale acquisitions and mergers
including that of West Corp’s CCO arm by Alorica and multiple acquisitions of smaller companies within
Europe by both Webhelp and Capita

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The service provider landscape for CCO includes CCO
specialists, integrated IT+BPO players, and BPO pure-plays
NOT EXHAUSTIVE
CCO specialists IT+BPO players BPO pure-plays
 Predominantly focused on contact  Integrated players that provide  Have significant presence across
center outsourcing services across ITO and BPO BPO segments (e.g., FAO, PO, and
 Do not have a significant play in  Have a significant ITO portfolio HRO) beyond CCO
other BPO/ITO segments beyond BPO  Do not have a significant ITO play

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The strategic focus for each category of CCO players is
strongly influenced by a different set of competitive dynamics
and legacy capabilities
Player segment Growth rate Growth strategies employed
(2014-2015)
 Despite big mergers such as that of Alorica and

Low growth West Corporation in 2015, the growth of CCO
CCO specialists
(<2%) specialists was subdued, led by de-growth of
Latin American CCO specialists due to currency
woes
 Moderate growth in business, driven by

Moderate growth integration and use of their IT capabilities to
IT+BPO players offer solutions in areas such as analytics and
(4-6%)
robotic process automation
 Focus on organic growth, driven by investments

High growth in innovation, customer analytics, and multi-
BPO pure-plays channel services
(5-10%)
 Go-to-market strategy of delivering CCO as part
of an integrated BPO offering
 Leaders in creating integrated front-to-back
office offerings along specific vertical industries

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Teleperformance and Convergys lead the overall market with
the largest CCO revenue, followed by several other players
having more than US$1 billion in revenue
2015 CCO service provider revenue1 Growth rate
(2014-2015) XX% Growth rate
Revenue in US$ billion
Teleperformance ~3.7 <5%

Convergys ~3.0 <5%  Teleperformance and
Atento Convergys are by far the
~2.0 <5% biggest CCO service providers,
Sitel ~1.4 <5% being the only two providers to
Concentrix ~1.3 15-20% be at or have crossed the US$3
Sykes ~1.3 billion mark
CCO <5%
specialists Alorica ~1.2 95-100%
TeleTech ~1.0 <5%  High growth for Alorica on the
EGS ~1.0 <5% back of its acquisition of West
Corp’s CCO business
Contax ~0.9 <5%
Webhelp ~0.8 10-15%
Transcom ~0.7 <5%  Webhelp and Capita posted
strong growth on the back of
IT+BPO HPE ~0.6 <5%
acquisitions of smaller firms in
players Dell ~0.5 5-10% Europe
Xerox ~1.6 <5%
Capita ~1.1 5-10%
BPO pure-plays  Sutherland witnessed above
Sutherland ~0.8 10-15% industry growth on the back of
Aegis ~0.5 <5% winning new client logos and
Firstsource ~0.5 <5% renewing existing contracts
1 Includes service providers with revenue over US$500 million
Note: The analysis does not take into consideration the acquisition of EGS by Alorica announced on June 1, 2016

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The leading service providers in terms of market share differ
significantly across geographies
Top five CCO service providers based on market share across geographies
North America EMEA LATAM APAC
Source: Based on operational capability assessment of 25+ service providers; annual reports; Everest Group estimates

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The mix of leading providers also changes by industry
segments
Top five CCO service providers based on market share in leading industry segments
Telecom Technology BFSI Retail Travel & hospitality Healthcare
Source: Based on operational capability assessment of 25+ service providers; annual reports; Everest Group estimates

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Investments (page 1 of 4)
Among the different categories of service provider investments, enabler
technologies accounted for the majority in the last two years
CCO-related investments reported in 2014-2015 NOT EXHAUSTIVE
Number of instances
100% = 117
Others CRM technology  Enabler technologies accounted for over half of the
total investments reported by service providers in
7% 6% 2014-2015. Most of these investments were made in
Communication
12% technology analytics, social media, and multi-channel technologies
 Majority of the investments related to CRM and

Scale 28% enabler technologies were made internally
 The partnership model saw a higher contribution over

internal investments to develop capability related to
communication technology
 Service providers also invested in setting up centers of

47%
Enabler excellence, customer experience labs, and dedicated
technology hubs for analytics and social media
Sample size: 150+ investments reported till 2015


57
EGR-2016-1-R-1823
Investments – focus on enabler technology (page 2 of 4)
Majority of the enabler technology-related investments were focused on analytics,
automation, and multi-channel tools, with most of them being developed in-house
Enabler technology-related investments reported in 2015 NOT EXHAUSTIVE

Number of instances
M&A Partnerships Internal
• HGS developed solutions related to interaction analytics and Assisted Chat that uses analytical modelling
• Knoah invested in KnoahsARK 360, a cloud-based & mobile-compatible reporting and analytics solution
• Alorica invested in Alorica Outreach – a B2C revenue-generation solution that promotes “Smart Calls”
Analytics 1 9 • Xerox invested in Xerox Analytical and Customer Experience services
• Aegis and Intelenet invested in speech and text analytics
• Genpact partnered with Arria, a company that creates language narratives from complex data sources
• WNS invested in RePAXSM – an automated, on-demand, passenger experience solution, as well as

RoboTKTexchange – a robotic platform to reissue tickets due to schedule change
• Tech Mahindra invested in Blue Prism that emulates human execution of repetitive processes with existing
Automation 7 applications and RPA UNO, an RPA for back-office operation
• Intelenet’s Phantom Robotics Automation Solutions (PRPA) deploys rapid automation of manual, rules-based,
and back-office administrative processes
• HGS is using RPA to automate client work, as well as increase accuracy and decrease processing time
Multi-channel • TCS invested in solutions such as Click to Call, Click to Chat, and Web Chat
1 7 • Alorica invested in multi-channel solution that offers a seamless brand experience across different channels
tools
• HGS developed Digital Natural Assist (DNA) to streamline customer service communications across all
channels
• Genpact invested in Multichannel Customer Acquisition & Servicing (MCAS) system of engagement
• Aegis invested in omnichannel contact center solution
• Conduit Global partnered with Touchcommerce to offer high caliber chat technology to its clients
Social media 2
• Intelenet developed social media analytics tools for measuring, analyzing, and interpreting interactions and
associations between people, topics, and ideas on social media channels
• TCS is working on Digital Social Experience Management – a unified single window social media interaction
platform to cater to the customer interaction needs from prominent social media touch-points

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EGR-2016-1-R-1823
Investments – focus on scale (page 3 of 4)
Majority of scale-related investments are internally supported with a few
large-ticket acquisitions
Scale-related investments reported in 2015 NOT EXHAUSTIVE
Number of instances
 WNS opened two new delivery centers in South Africa

 EXL established a new delivery center in South Africa for a United Kingdom-based insurer
 HGS expanded its facility at Windsor, Ontario to cater to the increased demand in Canada
 Knoah expanded its seating capacity at its Las Vegas center
 Alorica invested US$10 million to expand operations in Lipa, Philippines
Internal 9  Teletech opened new offices in North America and Philippines
 HGS expanded its operations in Canada and Philippines by opening new centers as well as ramping
up existing ones
 EGS ramped up its operations across Philippines, North America, and Latin America
 Dell expanded its delivery centers across India and United States
 Alorica acquired West Corp’s CCO business

 Capita acquired European firm avocis to expand its presence in Germany, Austria, and Switzerland
 HGS acquired a majority stake in US.-based Colibrium Partners and Colibrium Direct (Colibrium), a
wellness automation technology firm, to strengthen its position in the healthcare sector
M&A 6  HGS acquired Mphasis Group’s domestic India business
 EXL acquired RPM Direct, an insurance-focused analytics firm to tap into its extensive consumer
database
 Webhelp acquired parts of Germany-based Walter Services, Italy and Czech Republic-based OnLine,
CSM in Switzerland, and Callpex, a Turkey-based customer management firm


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EGR-2016-1-R-1823
Investments – others (page 4 of 4)
While investments in CRM technology and CoEs are internal in nature,
majority of communication technologies are built through partnerships
Investments reported in 2015 NOT EXHAUSTIVE
Number of instances
• EGS invested in social media CRM that builds upon CRM capabilities by leveraging social media channels
CRM • Minacs invested in ALT CRM capability which is capable of collecting big data, analyzing it, and automating
technology 2 response on a multi-channel platform
• EGS invested in call routing technology that aligns agent and caller personalities to improve performance
• HPE entered into a partnership with Avaya to upgrade its CCO platform
• EXL invested in Avaya SIP infrastructure
• Sitel invested in AT&T IP Flex Technology to eliminate the costs for TDM trunks, provide instant capacity for
Communication customer call spikes, and eliminate toll free charges
5 1
technology • TCS upgraded its existing Avaya & Aspect platform
• EGS partnered with Verint for audio recording platform
Centers of • Alorica set up Center of Analytical Excellence, which is a dedicated team of graduates and postgraduates that
Excellence work as internal consultants for process optimization
(CoE) 1 4 • EXL invested in executive Innovation Lab in Philippines for positive client showcasing
/ specialized • HGS MENA was set up in 2015 to tap opportunities in the Middle East markets
hubs • Minacs set up its second analytics command center in Nova Scotia, United States
• Dell partnered with a leading customer interactions company to develop innovation labs and showcase
centers in Dell facility


60
EGR-2016-1-R-1823
More detailed analysis of the CCO service provider
landscape including the PEAK Matrix has been published
in CCO Service Provider Landscape Study 2016
Leaders
Market Success
Major Contenders
Measures success
achieved in the market
Aspirants
Measures ability to deliver services successfully

Delivery capability
captured through five subdimensions – scale,
scope, enabling capabilities, delivery footprint,
and buyer satisfaction
 Detailed analysis of service provider market shares

CCO service
 Relative positioning of service providers on the Everest Group PEAK Matrix and analyses along
provider
various assessment dimensions
landscape
 Service provider trends and key investments made
 Detailed profiles of 25+ service providers playing in the CCO space

CCO service
 Four- / five-page profile of each CCO service provider
provider
 Each profile provides a comprehensive picture of the provider’s service suite, scale of operations,
compendium
client portfolio, recent developments, delivery locations, and Everest Group’s detailed assessment of
its capabilities

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EGR-2016-1-R-1823
Contents
 Appendix

62
EGR-2016-1-R-1823
Outlook for 2016-2017 (page 1 of 2)
Steady market growth as  The CCO market is expected to grow at ~4% over the next couple of years, as
CCO market transitions service providers transition from traditional service delivery to meet client
to digital age requirements in the digital age and stay relevant in the market. Post this phase,
growth is again expected to pick up in a few years
Growth to be driven by  Asia Pacific, Middle East, and Eastern Europe are expected to drive growth in the
emerging markets future, while United States will continue to remain the most important CCO market
in the foreseeable future
 Healthcare, retail, and travel & hospitality are expected to drive fast-paced growth
due to changes happening in these industries
 New economy companies are expected to drive growth in the mid- and large-buyer
segments, while they will also have an impact on traditional CCO buyers and how
they do their business
Increased cost of  Tincreased demand for onshoring would further increase the total cost of ownership
ownership due to rise in for buyers. Hence, buyers would look for alternative solutions such as multi-channel
onshoring delivery, WAHA model, and automation technologies to reduce cost of operations
and he increase value for their customers
Multi-channel solutions  Multi-channel solutions, especially inclusion of chat and social media, would
to be dominant across continue to increase with more customers preferring to connect with brands through
new contracts new-age channels than voice channel

63
EGR-2016-1-R-1823
Outlook for 2016-2017 (page 2 of 2)
Automation to replace  Increased adoption of automation would have an impact on the relevance of
transactional work done offshore delivery, as processes could be executed onshore at much lower cost than
from offshore locations in offshore locations. Buyers and service providers must, therefore, consider the
role of automation and its impact on shoring mix
 Channel management to provide an integrated single-view to customers through
multiple touch-points is going to be more critical in coming years to deliver a
seamless experience
More consolidation  The market will continue to see M&As in the coming years, as service providers
expected in CCO space look to maintain market supremacy from share perspective as well as plug gaps in
their capabilities by acquiring other firms

64
EGR-2016-1-R-1823
Contents
 Appendix
– Publicly-announced contracts in 2015
– Glossary of terms
– CCO research calendar
– References

65
EGR-2016-1-R-1823
Publicly-announced CCO contracts in 2015 (page 1 of 2)
NOT EXHAUSTIVE
Service Buyer Buyer signing
Quarter Buyer provider industry region Brief description
Q4 2015 City of El Paso DATAMARK Government United States DATAMARK, Inc. was selected by the City of El Paso to staff
and manage the city’s 311 Customer Service Call Center. The
call center, staffed by approximately 34 agents, handles calls in
English and Spanish placed to the city’s 311 non-emergency
phone number
Q4 2015 First Hawaiian TSYS BFSI United States TSYS announced that the First Hawaiian Bank signed an
Bank agreement for TSYS to continue its more than 15-year old
relationship
Q4 2015 Florida Xerox Government United States The Florida Department of Transportation (FDOT) has awarded
Department of Xerox a contract for the implementation of a state-of-the-art
Transportation customer service system for processing toll transactions across
the state
Q4 2015 Whirlpool Transcom Retail Europe Transcom signed an agreement with Whirlpool Corporation to
Corporation implement a call center integration program across Europe
Q3 2015 Banco Santander Transcom BFSI United States Transcom announced that it renewed its agreement with Banco
Santander for outsourced customer care services
Q3 2015 NCP Bellrock Others United Bellrock was awarded a new maintenance management
Kingdom contract with NCP. The scope of the contract also includes 24/7
contact center services
Q3 2015 Commerzbank Worldline BFSI Germany Worldline and Commerzbank extended their existing processing
contract for a further seven years. In addition to technical
processing, the contract also provides customer services

66
EGR-2016-1-R-1823
Publicly-announced CCO contracts in 2015 (page 2 of 2)
NOT EXHAUSTIVE
Service Buyer Buyer signing
Quarter Buyer provider industry region Brief description
Q2 2015 Dixons Carphone DHL Retail United DHL was awarded a £78 million, three-year contract with
Kingdom Dixons Carphone to manage its UK national distribution to
stores and customer service centers
Q2 2015 Centers for General Healthcare United States General Dynamics will provide contact center support for health
Disease Control Dynamics departments, healthcare providers, and more than 3,300 users
and Prevention of the Centers for Disease Control and Prevention’s Vaccine
Tracking System (VTrckS), a secure web-based system
Q2 2015 Australian Optus Government Australia Optus extended its managed services contract with the ATO
Taxation Office until June 20, 2018. Under the extension, Optus will continue to
(ATO) deliver all voice and data communications (mobile and fixed),
contact center, and videoconferencing services
Q1 2015 National Careers Serco Government United Serco secured a new three-year contract for delivering contact
Service Kingdom center services for the National Careers Service
Q1 2015 Nextel AlmavivA do Telecom Brazil AlmavivA do Brasil , a subsidiary of AlmavivA, signed a Euro
Communications Brasil 100 million euro contract with Nextel for the management of call
center, back-office, collection, and retention.
Q1 2015 Reliance Vertex Telecom India Reliance Communications awarded a nearly Rs750-crore deal
Communications to the Indian unit of UK-based Vertex to outsource its call center
and shared services operations

67
EGR-2016-1-R-1823
Glossary of key terms used in this report (page 1 of 2)
Term Definition
ACV Annualized Contract Value is calculated by dividing the Total Contract Value (TCV) by the term of the
contract
ARC/RRC Additional/Reduced Resource Charges are used to adjust the “base fee” charged by service providers to
account for an increase/decrease in the volume of services relative to the agreed baseline. Typically, the
baseline is a range of volumes, resulting in a “dead band”
BPO Business Process Outsourcing refers to the purchase of one or more processes or functions from a
company in the business of providing such services at large, or as a third-party provider
Buyer The company/entity that purchases outsourcing services from a service provider
Contract term The duration of the outsourcing contract. It drives the schedule over which the buyer or service provider
amortizes capitalized costs, or the period over which Net Present Value (NPV) / Internal Rate of Return
(IRR) is calculated
Dead band Dead bands are specified ranges of volumes (e.g., ±10% of current volumes) for which the price is
constant. The price may be either a fixed price (e.g., US$0.5 million) or a per-unit price (e.g., US$1.00 per
invoice). Outside of the specified range of volumes, the price changes in a defined manner, which is
negotiated. From a buyer’s perspective, dead bands are used to create predictability of charges; from a
service provider’s perspective they are used to reduce the administrative effort required to invoice a buyer.
The design of dead bands reflects the variability of a service provider’s cost structure and its risk tolerance
FAO Finance and Accounting Outsourcing is the transfer of ownership of some or all finance and accounting
processes or functions to a service provider. This could include administrative, delivery, or management-
related processes or functions
FTEs Full-Time Employees on the rolls of the company

68
EGR-2016-1-R-1823
Glossary of key terms used in this report (page 2 of 2)
Term Definition
GIC Global In-house Centers are service delivery operations in lower cost geographies, which are owned and
operated by the same company receiving the services (i.e., not third-party outsourcing)
HRO Human Resources Outsourcing is the transfer of ownership of some or all human resource processes or
functions to a service provider. This could include administrative, delivery, or management-related
processes or functions
ITO Information Technology Outsourcing is the transfer of ownership of some or all information technology
processes or functions to a service provider. This could include administrative, delivery, or management-
related processes or functions
Offshoring Transferring activities or ownership of a complete business process to a different country from the country
(or countries) where the company receiving the services is located. This is primarily done for the purpose of
gaining access to a lower-cost labor market, but may also be done to gain access to additional skilled labor,
establish a business presence in a foreign country, etc. Companies may utilize offshoring, either through an
outsourcing arrangement with a third party, or by establishing their own captive presence in the offshore
location, among other business structures
PO Procurement Outsourcing is the transfer of ownership of some or all procurement processes or functions to
a service provider. This could include administrative, delivery, or management-related processes or
functions
Service provider A company/entity that provides outsourcing services to another company/entity
TCV Total Contract Value is the potential revenue associated with the contract and estimated at the
commencement of the contract (e.g., sum total of revenue accrued to the service provider from the contract
over the entire contract term, usually measured in millions of dollars)

69
EGR-2016-1-R-1823
CCO research calendar
Published Current
Topic Release date
CCO Pricing Trends: The Realities of Outcome-Based Pricing Adoption January 2016
Clever Machines at Your Service February 2016
Analytics Business Process Services (BPS) – Annual Report 2016 March 2016
Service Delivery and Demand Dynamics in Latin America March 2016
Heralding a New Era of Transformative Business Process Services through Technology April 2016
Analytics Business Process Services (BPS) – Service Provider Landscape with PEAK Matrix™ Assessment 2016 April 2016
Contact Center Outsourcing (CCO) – Service Provider Landscape with PEAK Matrix™ Assessment 2016 May 2016
Analytics BPS – Service Provider Profile Compendium 2016 June 2016
Making the Work-At-Home-Agent (WAHA) Model Work: A Buyer’s Perspective June 2016
Achieving Maximum BPO Value: How Smart Buyers Structure Contact Center Relationships June 2016
The Dynamics Behind the Alorica - EGS Deal June 2016
Unlocking Next-Generation Value through Technology-Embedded Business Process Services | Part 1 July 2016
Contact Center Outsourcing (CCO) - Annual Report 2016 July 2016
Technology in BPS - Market Landscape Refresh Q3 2016
Contact Center Outsourcing (CCO) – Service Provider Profile Compendium 2016 Q3 2016
Technology in BPS – Service Provider Compendium 2016 Q3 2016
Technology in BPS - Service Provider Landscape 2016 Q3 2016
Healthcare CCO: An Updated Market Overview and PEAK Matrix Q4 2016
RPA and Technology Innovation in CCO Q4 2016
SDA in Business Process Services (BPS) – Service Provider Landscape Q4 2016
SDA in BPS - Service Provider Profile Compendium 2016 Q4 2016

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EGR-2016-1-R-1823
Additional CCO research references
The following documents are recommended for additional insight into the topic covered in this report. These documents either
provide additional details or complementary content that may be of interest
1. Contact Center Outsourcing (CCO) – Identifying the Differentiators of High Growth CCO Providers (EGR-2015-1-R-1636);
2015. This viewpoint provides coverage of service providers that have expanded at a higher pace than the market growth rate, and the
growth strategies adopted by them that have allowed them to expand at such pace. It looks at how these new areas of focus being
pursued by these service providers are shaping up in the contact center space and are driving growth in the industry.
2. Contact Center Outsourcing (CCO) – Service Provider Profile Compendium 2015 (EGR-2015-1-R-1579), 2015. This report provides
comprehensive, fact-based snapshots of 20+ major CCO service providers. Each profile highlights a service provider’s delivery
capability, market strategy, key organizational developments, delivery footprint, and client portfolio along various dimensions such as
geography and industry. In addition, each profile provides the positioning of the service provider on the Everest Group PEAK Matrix with
an insightful analysis of its capabilities.
3. Contact Center Outsourcing (CCO) – Service Provider Landscape with PEAK Matrix™ Assessment 2016 (EGR-2016-1-R-1771);
2016. This report focuses on service provider positioning in the CCO market, changing market dynamics & emerging service provider
trends, and assessment of service provider delivery capabilities.
For more information on this and other research published by Everest Group, please contact us:
Katrina Menzigian, Vice President: katrina.menzigian@everestgrp.com

Skand Bhargava, Practice Director: skand.bhargava@everestgrp.com
Jayapriya K, Senior Analyst: jayapriya.k@everestgrp.com
Sharang Sharma, Analyst: sharang.sharma@everestgrp.com
CCO Team: CCOresearch@everestgrp.com
Website: www.everestgrp.com | Phone: +1-214-451-3000 | Email: info@everestgrp.com

71
EGR-2016-1-R-1823
About Everest Group
Everest Group is a consulting and research firm focused on strategic IT, business
services, and sourcing. We are trusted advisors to senior executives of leading
enterprises, providers, and investors. Our firm helps clients improve operational
and financial performance through a hands-on process that supports them in
making well-informed decisions that deliver high-impact results and achieve
sustained value. Our insight and guidance empowers clients to improve
organizational efficiency, effectiveness, agility, and responsiveness. What sets
Everest Group apart is the integration of deep sourcing knowledge, problem-
solving skills, and original research. Details and in-depth content are available at
www.everestgrp.com and research.everestgrp.com.
Dallas (Headquarters) Stay connected

info@everestgrp.com
+1-214-451-3000 Websites
New York www.everestgrp.com

info@everestgrp.com research.everestgrp.com
+1-646-805-4000
Toronto
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@EverestGroup
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Contact Center Outsourcing Annual Report 2016: The Rise of

Digital Contact Centers – Clear Evidence that Real Change is

Copyright © 2016 Everest Global, Inc.

 Healthcare & Life Sciences  Locations | Cost, skills, sustainability,

Copyright © 2016, Everest Global, Inc.

Information desired Where/how to locate the information

Topic Page no.

Summary of key messages 13

Section I: Market size and buyer adoption 16

Section II: Value proposition and solution characteristics 31

Copyright © 2016, Everest Global, Inc.

Topic Page no.

Section III: Service provider landscape 50

Outlook for 2016-2017 62

Copyright © 2016, Everest Global, Inc.

 Introduction and overview

 Summary of key messages

 Market size and buyer adoption

 Service provider landscape

 Outlook for 2016-2017

Copyright © 2016, Everest Global, Inc.

 Market thought leadership

Total Value Equation

Proprietary & Confidential. © 2011, Everest Global, Inc. 8 Service

 Proprietary contractual database of 1,000+ CCO contracts (updated annually)

Copyright © 2016, Everest Global, Inc.

Copyright © 2016, Everest Global, Inc.

Copyright © 2016, Everest Global, Inc.

Contact center pyramid Strategy

Source: Everest Group (2016)

Copyright © 2016, Everest Global, Inc.

Strategy (in-house) Strategy

Customer retention management management

Copyright © 2016, Everest Global, Inc.

 Introduction and overview

 Summary of key messages

 Market size and buyer adoption

 Service provider landscape

 Outlook for 2016-2017

Copyright © 2016, Everest Global, Inc.

Market size and buyer adoption

 As buyers look to consolidate their existing portfolio, a shift

category, will be the torch bearers for growth in the future

Copyright © 2016, Everest Global, Inc.

Transition of contact center to digital-era Value proposition Solution characteristics

Copyright © 2016, Everest Global, Inc.

Service provider landscape

Ramped up investments in scale and technology Transcom ~0.7 <5%

Copyright © 2016, Everest Global, Inc.

 Introduction and overview

 Summary of key messages

 Market size and buyer adoption

 Service provider landscape

 Outlook for 2016-2017

Copyright © 2016, Everest Global, Inc.

CCO global market size and growth

Buyer adoption trends

Copyright © 2016, Everest Global, Inc.

Outsourced ~25% ~75% In-house /

2011 2012 2013 2014 2015 2016E

Key reasons for declining market growth rate in 2014-2015:

Source: Everest Group (2016)

Copyright © 2016, Everest Global, Inc.