Magic Quadrant: Customer Management Contact Center BPO, Worldwide

Magic Quadrant: Customer Management Contact Center BPO, Worldwide 19 December 2011 ID:G00226448 Analyst(s): TJ Singh, Johan Jacobs VIEW SUMMARY Gartner's 2011 Magic Quadrant for customer management contact center business process outsourcing services evaluates a vibrant provider landscape that is fast-changing due to evolving market conditions, customer needs and technology, in a volatile global economy. What You Need to Know The market for customer management (CM) contact center business process outsourcing (BPO) continues to expand as buyers shift their focus from cost containment to growth both revenue and profit growth and service improvements. While some aspects of these services are mature, it is important for buyers to evaluate service providers with the most relevant and consistent information available. The target audiences of this Magic Quadrant are buyers of CM contact center BPO services, those who are looking to expand or rightsize their providers and/or services, potential buyers of these services, and general market watchers, such as the investment community. This Magic Quadrant evaluates key players in the worldwide CM contact center BPO service provider landscape (see Figure 1). The research evaluates service providers on their CM contact center BPO capabilities in the Americas, EMEA and Asia/Pacific. The scope of services includes the management of service provider employees to the delivery of CM contact center BPO services to the management of customer experience. However, the direct management of subcontractors does not apply in this research. Rather, this project aims to assess a CM contact center BPO service provider's ability to recruit, train, manage, deploy and retain agents to support and deliver CM contact center processes and services for enterprise or government clients worldwide. CM contact center BPO initiatives require multiple skills and assets to be successful. CM contact center BPO service providers considered for this Magic Quadrant have a blend of the following: CM contact center BPO business expertise (for example, business process design and service delivery skills) Organizational expertise (for example, change management and training) Industry expertise (for example, communications, healthcare, utilities and financial services) Multi-CM vendor/product expertise (for example, homegrown platform experience or experience with third-party technologies and services, such as Amdocs, Microsoft, Oracle, salesforce.com, SAP, Avaya, Alcatel-Lucent/Genesys, Cisco and Interactive Intelligence) and technical expertise (for example, multiapplication integration and customer data repository strategy and design) CM contact center BPO program and project management expertise (for example, skills to take on new clients, portfolio management and governance, and customer contract management) Demonstrated innovation (for example, customer experience design and management) Capabilities to deliver CM contact center BPO services through onshore, nearshore, offshore (global delivery) or work at home (WAH) service delivery models Multichannel capabilities; that is, the ability to dynamically balance voice, Web self-service, email response, Web chat, social media, Web-based self-service and interactive voice response (IVR) self-service A broad group of providers offer CM contact center BPO services, and Magic Quadrants do not automatically include all service providers in a given sector. Many service providers focus and deliver discrete CM contact center BPO services rather than comprehensive CM contact center BPO services. Companies considered for evaluation in this research act as advisors, and they provide implementation and management services that encompass most or all levels of a CM contact center BPO service, as outlined above. Providers have been evaluated in detail using a combination of quantitative and qualitative criteria. While vendors may decline to provide references or to brief

Gartner on capabilities, vendors cannot elect to be excluded from a Magic Quadrant if they otherwise meet the inclusion criteria. Magic Quadrant Figure 1. Magic Quadrant for Customer Management Contact Center BPO, Worldwide Source: Gartner (December 2011) Market Overview The worldwide CM contact center BPO market is forecast to grow steadily through 2015. By that year, Gartner expects it will grow into a $48.6 billion business, with a five-year compound annual growth rate (CAGR) of 5% from 2010 through 2015. Gartner expects cost pressures to subside in the CM contact center BPO market due to limited scope for increased BPO services and market share. A recent Gartner user survey revealed that just over 45% of respondents (out of a total of 194 respondents) achieved less than 10% cost savings from their CM contact center BPO engagements; Gartner believes that this result is due to cost savings being achieved in the early days of these multiyear engagements that were from primarily labor arbitrage. In the past, buyers were focused more on their business goals and needs, but going forward, the focus is shifting to technology and process improvements, valueadded services, such as multichannel and analytics services, scalability, quality of service and more innovative ways of addressing the increasing levels of complexity in their business and customers. Buyers continue to exert a sense of cautious optimism in their decision making, as they consider acquiring CM contact center BPO services, even though the general economic outlook and sentiment suggest a prolonged economic malaise. Through 2011, buyers continue to face business issues, such as revenue and profit growth, new service channels and improving customer retention through better and more consistent customer experience. Service providers, on the other hand, continue to face operational issues, such as rising labor costs resulting from higher levels of inflation in nearshore and offshore locations; a stronger or weaker currency; service provider profitability; and technology and quality improvements. So in conclusion, buyers must handle

myriad strategic and operational issues in an environment in which deals are getting more complex and customers/consumers are demanding more for less. This document looks beyond the economic drivers and focuses on key emerging trends that are fundamentally related to the CM contact center BPO business. The findings are based on aggregating the results of interactions with CM contact center BPO buyers and providers during the past 12 months. Four trends consistently appeared during that research: Socioeconomic and demographic evolution of large CM contact center BPO buying hubs or markets, such as North America, Western Europe and Japan, and the emergence of new markets developing countries and non-english-speaking markets. The "mobility evolution" Increasing numbers of mobile devices, such as the iphone, ipad, smartphones and so forth, and richer content and interaction on such devices, are driving demand for CM contact center BPO, not only in the matured markets, but more so in emerging markets. Growth in nonvoice (multichannel), automated and cloud-enabled CM contact center BPO services The growth of nonvoice and automated services, such as self-service, analytics and multichannel services, which are driven by technological changes, innovation, and a focus on service efficiency and effectiveness. Continued service provider consolidation The service provider landscape will continue to consolidate during the next three years as excess capacity is absorbed and service providers drive revenue growth and market share through mergers and acquisitions (M&As). For more information, see "Market Trends: Customer Management BPO, 2012." Market Definition/Description Gartner's definition of BPO is "the delegation of one or more IT-intensive business activities"; that is, BPO contracts always include the outsourcing of the business process administration to a third party and may include outsourcing the application maintenance and ownership, which are bundled as part of the process management statement of work. CM contact center BPO, which includes the processes linking an organization with its existing and potential customers, can be categorized in four subsegments: Customer selection Customer acquisition Customer retention Customer extension The four subsegments should also consistently be executed across the following four primary channels: Telephony inclusive of voice and IVR self-service Email response management Web chat Knowledge management for Web-based self-service Customer selection: Market segmentation and data analysis include the collection, management, augmentation, analysis and application of customer data in support of marketing and sales efforts. Campaign design and communication planning include campaign planning, communication planning, design and printing/developing of marketing collateral. Other customer selection includes testing, brand planning, account/territory planning, product introduction and other customer selection functions not included in the above categories. Customer acquisition:

Lead management and opportunity management include administration of business-tobusiness team selling across field and inside sales channels, and guiding sales executives through lead generation, qualification and quantification of the opportunity to deal closing. Telesales, telemarketing, Web sales and marketing include telephone calls made (outbound) or received (inbound) by agents either attempting to generate sales leads or complete immediate sales, as well as design, installation, operations and management of websites used to conduct marketing, sales and other commerce activities. Other customer acquisition includes direct mail campaign management, channel management, proposal generation, solution design, negotiation, deal closing and other customer acquisition functions that are not included in the above categories. Customer retention: Self-service includes leveraging an organizational knowledgebase to provide unassisted customer support. Self-service is a component of customer service and support. Inquiry handling and problem resolution include managing customer concerns either through outbound or inbound communications, over the telephone or over the Internet. Field service automation includes managing personnel resource allocation, communication of problem tickets, diagnostics, spares inventory and preventive maintenance in the field service and repair organization. Other customer retention includes order management, repair and returns handling, attrition management and other customer retention functions that are not included in the above categories. Customer extension: Customer data analytics include analysis of customer data with the purpose of extending services to current and new customers Upsell and cross-sell include identifying existing products and services purchased by a customer and using that information to influence the purchase of associated products and services. Other customer extension includes needs reassessment, campaign management and other customer extension functions that are not included in the above categories. Inclusion and Exclusion Criteria This research evaluates service providers on their CM contact center BPO capabilities, specific to the management of their own employees to delivery of those services. Direct management of subcontractors does not apply to this research effort. Rather, this project aims to assess a CM contact center BPO service provider's ability to recruit, train, manage, deploy and retain agents to support CM contact center processes for enterprise or government clients. CM contact center BPO initiatives require multiple skills and assets to be successful. CM contact center BPO service providers considered for this Magic Quadrant would have a blend of the following: CM contact center BPO business expertise (for example, business process design and service delivery skills) Organizational expertise (for example, change management and training) Industry expertise (for example, communications, healthcare, utilities and financial services) Multi-CM vendor/product expertise (for example, homegrown, Amdocs, Microsoft, Oracle, salesforce.com, SAP, Avaya, Alcatel-Lucent/Genesys, Cisco and Interactive Intelligence) and technical expertise (for example, multiapplication integration, customer data repository strategy and design) CM contact center BPO program and project management expertise (for example, project management skills to take on new clients, portfolio management and governance, and customer contract management) Ability for innovation (for example, customer experience management design and management)

Capabilities to deliver CM contact center BPO services through onshore, nearshore or offshore (global delivery) service delivery model Ability to not only provide services on the voice channel, but also provide services across Web self-service, email response, Web chat and IVR self-service A broad group of providers offer CM contact center BPO services. Magic Quadrants do not include all service providers in a given sector. Many service providers focus only on parts of the overall solution. Companies considered for evaluation in this Magic Quadrant research are those that act as advisors and provide implementation and management services that encompass most or all levels of a solution, as outlined above. Further, providers will also be evaluated in more detail using a combination of quantitative and qualitative criteria. Note that vendors cannot elect to be excluded from a Magic Quadrant, assuming they meet the inclusion criteria. Quantitative Criteria Service providers that demonstrate CM contact center BPO service client-derived revenue, with: o A minimum revenue of $400 million (in U.S. dollars, estimated for the 12 months preceding publication) for worldwide CM contact center BPO service revenue; or o A minimum of 20,000 CM contact center BPO full-time equivalent (FTE) agents Qualitative Criteria Ability to provide references from at least five existing CM contact center BPO service clients from the Americas, as well as five from EMEA or Asia/Pacific (a minimum of 10 references). A global/multicountry company, with a commitment to CM contact center BPO services Market share and client base in at least two regions (that is, North America, Latin America, EMEA or Asia/Pacific) Capabilities to serve clients globally; must have global service delivery centers in at least two regions (that is, North America, Latin America, EMEA or Asia/Pacific) For the purpose of this Magic Quadrant research, Gartner assessed service providers with comprehensive CM contact center BPO service offerings (that is, customer-facing processes that providers offer from across the four subsegments that make up CM contact center BPO). Excluded from this research are: Added Accounts receivable management (collections) IT help desk HR or other enterprise services, including back-office functions. Field sales automation This includes management and administration of face-to-face interactions between sales teams and clients. The four types of field sales models are: influencer (using industry experts); opportunity-driven (used primarily for large-value products); project-driven (used for selling professional services); and iterative (based on ongoing relationships, such as consumer packaged goods [CPG]). Alorica, Sutherland Global Services and Vertex Business Services were added to the 2011 Magic Quadrant. Dropped No vendors were dropped.

Evaluation Criteria Ability to Execute Gartner analysts evaluate technology and service providers on the quality and efficacy of the processes, systems, methods or procedures that enable BPO service provider performance to be competitive, efficient and effective, and to positively impact revenue, retention and reputation. Ultimately, BPO service providers are judged on their ability and success in capitalizing on their vision. The following criteria were used to evaluate service provider positions. Product/Service: Core CM contact center BPO services offered by the service provider that compete in/serve the defined market. This includes current CM contact center BPO service capabilities, quality, feature sets, skills, and so forth, whether offered natively or through partnerships as defined in the market definition and detailed in the subcategories. Subcategories include assessment of services in key CM contact center BPO business skill selection, acquisition, retention and extension; assessment of technical knowledge and skills (that is, service delivery); and effectiveness in developing services to meet emerging market need and usage of all the channels identified above. Overall Viability (Business Unit, Financial, Strategy, Organization): Viability includes an assessment of the overall organization's financial health, the financial and practical success of the business unit, and the likelihood of the individual business unit to continue investing in these services, to continue offering the services and to advance the state of the art within the organization's portfolio of services. Sales Execution/Pricing: The service providers' capabilities in all CM contact center BPO presales activities and the structures that support them. This includes deal management, pricing and negotiation, presales support, and the overall effectiveness of the sales channel. Market Responsiveness and Track Record: Ability to respond, change direction, be flexible and achieve competitive success as opportunities develop, competitors act, customer needs evolve and market dynamics change. This criterion also considers the CM contact center BPO service provider's history of responsiveness and the ability to quickly scale up or down on the number of seats based on the customer's changing requirements. Marketing Execution: The clarity, quality, creativity and efficacy of programs designed to deliver the organization's message to influence the CM contact center BPO market, promote the brand and business, increase awareness of the services, and establish a positive identification with the brand and organization in the minds of buyers. This mind share can be driven by a combination of publicity, promotional, thought leadership, word-of-mouth and sales activities. Customer Experience: This criterion considers specific client feedback on clients' experience working with the CM contact center BPO provider and the provider's ability to deliver on key metrics that drive the overall client experience when working with the CM contact center BPO provider. Operations: The ability of the organization to meet its goals and commitments. Factors include the quality of the organizational structure, including skills, experiences, programs, systems and other vehicles that enable the organization to operate effectively and efficiently on an ongoing basis. Subcategories include applied use of proprietary methodologies and CM contact center BPO global delivery model footprint and capabilities. Completeness of Vision Gartner analysts evaluate CM contact center BPO service providers on their ability to convincingly articulate logical statements about current and future market direction, innovation, customer needs, and competitive forces and how well they map to the Gartner position. Ultimately, service providers are rated on their understanding of how market forces can be exploited to create opportunity for the provider.

Market Understanding: The ability of the provider to understand buyers' needs and to translate these needs into products and services. It includes service providers that show the highest degree of vision, listen and understand buyers' wants and needs specific to CM contact center BPO, and can shape or enhance those wants with their added vision. Subcategories include the service provider's knowledge and articulation of key market direction and trends, and the analysis of the service provider's executive leadership (including caliber, thought leadership, continuity, operational capabilities, and so forth). Marketing Strategy: A clear CM contact center BPO marketing strategy with a differentiated set of messages consistently communicated throughout the organization and externalized through the website, advertising, customer programs and positioning statements. Sales Strategy: The strategy for selling CM contact center BPO services that uses the appropriate network of direct and indirect sales, marketing, and service and communications affiliates that extend the scope and depth of market reach, skills, expertise, technologies, services and the customer base. Offering (Product) Strategy: A service provider's approach to CM contact center BPO service development and delivery that emphasizes differentiation, functionality, methodology and feature set as they map to current and future requirements. Subcategories include service provider strategies for partnerships and alliances (where applicable), vision for creating new and/or additional CM contact center BPO offerings and business, and vision for exploitation of channels other than voice. Business Model: The soundness and logic of the service provider's underlying CM contact center BPO business proposition. Vertical/Industry Strategy: The service provider's strategy to direct CM contact center BPO resources, skills and offerings to meet the specific needs of individual market segments, including vertical markets and industries. Innovation: Direct, related, complementary and synergistic layouts of CM contact center BPO resources, expertise or capital for investment, consolidation, defensive or pre-emptive purposes. This also includes the vendor's approach to customer experience design and development, as well as its sustainable investment in proactive tools, methods, platforms and/or locations for CM contact center BPO service delivery. Geographic Strategy: The service provider's strategy to direct CM contact center BPO resources, skills and offerings to meet the specific needs of geographies in support of the "home" or native geography, directly or through partners, channels and subsidiaries, as appropriate for that geography and market. Leaders Leaders demonstrate market-defining vision and the ability to execute against that vision through CM contact center BPO services, a superior market share (among the top 10 providers in regions where they compete), and solid references for CM contact center BPO service, worldwide, including a cross section of vertical industries. Leaders also have superior investments in innovative CM contact center BPO service offerings, business/pricing models and service delivery models. They have a superior understanding of client needs and of current market conditions, and they are actively building competencies to sustain their leadership position in the CM contact center BPO market across multiple regions, worldwide. The CM contact center BPO service providers in this quadrant generally also have strong global and regional service delivery operations and deep technology to leverage, and they deliver above-average customer experience. Challengers Challengers display sound vision and a strong ability to execute against the vision, but they have a less-defined view of market directions. The Challengers in this quadrant have a relatively good level of market understanding, a growing volume of sales and a sizable market share in key regions/markets for CM contact center BPO services, as well as a good understanding of their clients' evolving needs. They also have a strong operational execution but might lack geographical presence, depth in vertical industry, and technology capabilities and assets.

Visionaries Visionaries have strong vision and the ability to execute well against this vision. Visionaries are ahead of potential competitors in delivering innovative services, business/pricing models and/or delivery models. They anticipate emerging or changing market and customer needs, and they move into new opportunities quickly. They have a strong potential to influence the direction of the worldwide CM contact center BPO market, but they may struggle to meet the needs of all organizations because of some limitations geographical coverage, technology, marketing and brand awareness, or vertical industry knowledge. Visionaries must also focus on sales and marketing execution and customer experience to help improve their overall position. Niche Players Niche Players focus on a particular segment of the market as defined by characteristics such as size, vertical industry market, geographical region and project complexity or they provide only a select number of services among overall CM contact center BPO services. They may offer components of the complete service portfolio but demonstrate limitations in one or more important service areas. Among the worldwide CM contact center BPO service providers in this quadrant, strengths in market responsiveness and track record, innovation, marketing and brand awareness are bigger considerations. The relative number of installed base contracts is also a factor. Vendor and ACS (a Xerox Company) ACS (a Xerox Company) employs more than 45,000 FTE and WAH agents serving companies across multiple industries. It operates from 152 centers in 13 countries, with services in 20 languages. Recent CM contact center BPO or related acquisitions include XL World (Italy) and Unamic/HCN (Netherlands) in 2011 primarily for its European expansion and in 2010, the company acquired MultiVoice, and in 2009, the company acquired e-services and Communications Development. Vertical industry focus includes communications, banking and financial services, travel, retail, education, government, and healthcare. ACS has a good geographic presence across multiple regions, with extensive CM contact center assets in the Americas (North America and Latin America) and a growing presence in Europe. Clients cite strong vertical industry and platform capabilities as a key reason to engage with ACS. The company continues to focus on innovation in the delivery of services in areas such as achievement-based compensation, pricing models, deal engineering, workforce management and training management. The ACS acquisition by Xerox in 2010 brought new and additional revenue growth opportunities for the combined company. Further strategic acquisitions, as seen in Western Europe and a key component of the ACS growth strategy in the medium term, are expected to continue, and the aggressive growth via M&As should deliver a broader and deeper array of capabilities for clients. Clients cite deep vertical/industry knowledge and experience, flexibility and service quality as key strengths of ACS. ACS has limited sales and marketing presence in Asia/Pacific for CM contact center BPO services when compared with the Americas, but Gartner expects that the company with the support of its parent, Xerox will continue to build on its existing presence and partnership (with Fuji Xerox) in Asia/Pacific during the next 12 to 24 months. More than 20% of all current CM contact center BPO interactions are delivered through self-service and nonvoice channels. Although this meets industry averages, ACS must focus on further developing its self-service and nonvoice channels and offerings, especially in multifunctional (such as marketing, sales and customer care) and multilingual capabilities. Clients cite limited geographical presence and internal bureaucracy as two key cautions.

Aegis Aegis is an $800 million India-headquartered CM contact center BPO company, which is on track to achieve $1 billion in revenue in fiscal year 2012. Aegis is a privately held company owned by the Essar Group. Essar Group is a $17 billion, diversified-business corporation, with assets in the manufacturing and service sectors of steel, energy, power, communications, shipping ports and logistics, and construction. Aegis has more than 50,000 FTE employees based in 50 locations, with presence in 12 countries including North America, EMEA, Asia/Pacific, Australia, New Zealand and Latin America. The company's primary focus is on vertical industry markets, including telecommunications, financial services, healthcare, and travel and hospitality. Aegis continues to grow rapidly through acquisitions. Recent acquisitions include Sallie Mae (captive), UCMS (Australia), CCN Group (South Africa) and Actionline Argentina. Aegis also formed a joint venture Contact Center Co. (CCC) with Saudi Telecom in a US$2 billion deal in 2011. Aegis continues to invest in customer experience management with the establishment of the Institute of Customer Experience Management, which focuses on practical experience-driven learning across the service sector. Aegis also has a partnership with the Customer Operations Performance Center (COPC) to manage its quality and certification for consistent end-user experience. Aegis has an aggressive growth strategy focused on capability, capacity and geographical presence (that is, M&As), complemented by the financial strength of the Essar Group and talent and capacity building through Aegis Academy. The M&As have helped Aegis' rapid rise in the CM contact center BPO market, and they have delivered increasing scale and scope of capability for clients. Clients cite the company as responsive and flexible when dealing with client issues, as well as the company's deep domain and technology expertise, good customer data analytics and multichannel services. Clients also cite a strong and committed management team that engages with clients. The company has a strong management team that has significant experience in M&As and integration of new acquisitions specific to CM contact center services. The company also has significant experience with emerging markets. Aegis experiences moderate levels of brand awareness in North America and Australia both key markets. The company has embarked on numerous marketing initiatives and has also increased its sales presence in those regions. These initiatives have helped improve brand awareness in North America and Australia; however, brand awareness remains relatively low in new markets, such as continental Europe, when compared with other CM contact center BPO service providers. While M&As benefit clients in terms of the increasing scale and scope of capability that Aegis can offer, Aegis is relatively slower in terms of completely integrating the business units it acquired when compared with its larger peers. Clients cite agent accent and inconsistent service delivery from various locations globally as key concerns. Alorica Alorica, a company with more than US$600 million in revenue, supports clients from approximately 37 locations across North and Central America, India and the Philippines. The company has more than 22,000 FTE agents, of which approximately 450 are WAH agents. Alorica has grown into a sizable CM contact center BPO provider, through organic and inorganic growth, and it focuses on the technology, retail, communications, financial services, healthcare, travel and transportation industries. The company continues to expand its client and geographical concentration and plans to expand into South Africa, Latin America and China in the near term. The company grew through acquisition: Alorica acquired Ryla and PRC in 2010 and Advanced Contact Solutions in 2011.

Alorica has a strong social CRM program in the customer care arena, and it not only can monitor and manage what is discussed in social networks but also can provide social-crmbased influencer scoring and analytics insights, as well as the ability to respond accordingly. The company has a good and proven track record in integrating operations post-m&as. The company also conducts various community development programs, such as a WAH program for military veterans run by AloriCares, a division of Alorica. Clients cite flexibility, ease of doing business and responsiveness as three key strengths of the company. Alorica has a poor geographical footprint beyond North America: A high number of clients and delivery personnel are concentrated in North America, with limited client concentration in Europe, Latin America and Asia/Pacific. Alorica does not have a strong multichannel solution and lacks the depth in Web chat and email response management solutions found with some of the other players. Clients cite challenges in Alorica's technology integration and depth in technical capability. Atento Atento, an associate company of Telefonica Spain's largest telecommunications provider is the largest CM contact center BPO service provider, by head count, in Central and Latin America, as well as the largest Spanish- and Portuguese-language CM contact center BPO service provider in the world. Atento's CM contact center BPO service offerings are focused on customer retention and customer acquisition. The company employs a total of 151,000 employees, with approximately 100,000 FTE agents across 70 centers in 15 countries in Europe, Africa, and Central and Latin America servicing external clients. It continues to expand in North America with a focus on sales. Atento has a large client base of more than 400 corporations and governments, most of which are based in emerging markets. Its focus is on industries, such as communications, banking and financial services, utilities, government, retail, travel and transportation. Atento has a strong leadership team. It continues to be a market leader in the industry sectors and geographies in which it operates. The company also has a strong sponsor its strong revenue and financial position is backed by Telefonica. The company is a leader in the Spanish-language segment across the Americas and Spain. It has deep client relationships. Clients cite good cultural fit, deep process expertise and responsiveness as key strengths of Atento. Atento has high concentration in the communications sector and has a large exposure to the Spanish and Portuguese markets, which are facing significant head winds and possible declines in the near term. A significant portion of the service offerings is in the Spanish/Portuguese-speaking markets, which limits its ability to support a more diverse customer base. The company has limited client concentration outside the Spanish/Portuguese-speaking markets (that is, Latin America and the Iberian Peninsula). It has a very small CM contact center BPO presence in North America, the world's largest market. Although Atento is investing in multichannel nonvoice services, it has limited nonvoice multichannel services and analytics capabilities; today, 93.5% of Atento's services delivered are voice-based services.

Clients cite lack of experience within middle management, unclear long-term vision and strategy, and high staff turnover as key challenges. Gartner understands these issues are being addressed by the current new leadership team at Atento. Convergys Convergys employs more than 58,000 FTE and WAH agents and is one of the largest CM contact center BPO providers by revenue. The divestiture of its HR outsourcing business and, more recently, its finance and accounting (F&A) business, along with its stake in a local telephone company (telco), will allow the company to have greater financial flexibility and focus on its core CM contact center BPO business. Convergys has developed project-based consulting services for captive contact centers, as well as industry-based solutions, analytics including rule-based decisioning engines for both voice and nonvoice services talent management and end-user training solutions. The company also has a notable offering in billing solutions that complements its service and support business. Convergys plans to further enhance its presence in key emerging markets. Gartner estimates that more than 80% of the company's revenue comes from North America, and approximately 23% of the company's revenue is driven from nonvoice multichannel services. Convergys has industry-leading offerings in the following six vertical areas: communications, financial services, technology, healthcare, retail and government. The company has strong operational capabilities as manifested in its skills, resources, methodologies and tools for CM contact center BPO services, with technology and assets such as IVRs, as well as excellent customer experience analytics. Convergys continues to use WAH agents, who number approximately 3,000 FTEs. It has a specific WAH sourcing, training and performance management offering, while at the same time enables high security and ease of use for WAH technologies. Clients cite the relationship- and partner-centric engagement model, high quality of service and agents, time to market, and a strong ability to execute and be accountable as strengths of Convergys. HP include a limited global brand presence; the company has a limited but growing customer base and brand awareness outside of North America. Although the company has a high level of client concentration in North America, it continues to invest in marketing and sales initiatives focused on geographic expansion to help generate new growth opportunities for non-u.s.-based clients. Although improving, Convergys still has a high level of vertical industry concentration and exposure to the communications sector, financial services and high-tech sectors these three industries account for approximately 80% of Convergys' revenue. Clients cite Convergys' limited capability to cope with large-scale changes and multisystem support on the client side, and "speed to react to problems" as challenges. HP promotes itself as a provider of a broad portfolio of business and technology solutions to help clients worldwide improve their business performance. HP's core portfolio comprises IT, applications, industry and business process services. Gartner estimates HP's CM contact center BPO organization has more than 30,000 FTE agents offering sales, marketing, customer service and technical support services in 51 languages at 112 contact centers in 34 countries. The company targets CM contact center BPO deals that are large in scale and support highly complex business processes. HP is committed to investing and developing capability in this segment and positions it as an offering or part of a bundled offering in multidomain or comprehensive BPO engagements. Backed by a strong brand name for its depth of technology skills, HP is wellpositioned for complex process and technology integration in target industries such as financial services, healthcare and government, and it continues to serve a range of client needs in

communications, retail, high tech and transportation. HP announced the acquisitions of Autonomy, a provider of business solution software for customer management functions, in October 2011, and Vertica, a company with real-time analytics capabilities and assets, in February 2011. The acquisitions present HP with an opportunity to enhance and broaden its CM contact center BPO service offerings around structured and unstructured data and analytics services. With a strong global brand, HP has earned a reputation globally for service quality among its customers. HP's legacy technology capabilities and investments in Microsoft, SAP and Oracle provide deeper skills in migration and integration services when compared with CM contact center BPO pure plays; that is, service providers that are focused on only CM contact center BPO services, with limited or no IT services offerings. With a good client concentration across geographies the Americas, EMEA and Asia/Pacific HP has a large client base, as well as extensive vertical market and industry process knowledge. HP's move from the Knova Knowledge solution to its own knowledge management product has allowed HP to provide more flexibility in its offering and consistent information across all its channels. Clients cite strong operational capabilities, project management skills and relationship management as strengths of HP. Clients cite the lack of process-specific CM contact center BPO skills and the lack of consistency in service delivery across delivery locations when planning to engage HP. HP demonstrated relatively weaker CM contact center BPO thought leadership and ability to clients with its vision on CM contact center BPO. It has limited nonvoice multichannel service offerings nonvoice multichannel service represents an estimated 5% of the CM contact center BPO volume. With high concentration on customer retention and customer care, HP's revitalized focus on (embedded) CM contact center BPO, due to its new organizational structure, is still in its early implementation phase, and it bears careful evaluation to ensure alignment with buyer objectives. HP does not provide any collaborative browsing capability to assist customers with forms completion or with shopping cart assistance. Currently, HP has only a very small social CRM service customer base, with less than 1% of its revenue coming from social-related activities. Gartner does expect this to grow in the coming years. IBM Global Process Services IBM Global Process Services, with an estimated revenue of US$1.2 billion (Gartner estimate), employs more than 60,000 agents who offer sales, marketing, and customer service and customer support services in 31 languages from 35 countries. IBM Global Process Services continues to expand its capabilities and capacity globally. IBM Global Process Services maintains a relatively lean cost structure when compared with other CM contact center BPO service providers, hence making it a formidable competitor in this market. IBM Global Process Services continues to plan and enhance its presence in the key domestic markets of emerging countries in Asia/Pacific, Eastern Europe and Latin America. As a go-to-market strategy, IBM Global Process Services leverages its deep industry capabilities, knowledge and process skills. The company also takes advantage of the IBM Global Financing business unit, where applicable, to help amortize and finance large-scale BPO deals. IBM Global Process Services' industry focus for CM contact center BPO includes communications, technology, banking and financial services, government, healthcare, retail, and utilities.

IBM is a highly visible company in terms of geographical presence and global representation, which includes both a large customer base and strong skills in almost all vertical industries. The scope of CM contact center BPO services provided by IBM Global Process Services covers the complete CM life cycle, from marketing to services, from voice to nonvoice services, and to excellent analytic services. A strong financial position and considerable R&D investment favor IBM's ability to weather economic cycles and make continued investments in process and technology innovations. It continues to acquire assets through M&As and invest in nonvoice multichannel and analytic assets and services. Clients cite speed of implementation, global footprint, transparency and governance with executive-level commitment as strengths of IBM Global Process Services. Due to its history, IBM is perceived primarily as an IT services provider or IT technology provider, and based on Gartner client inquiries, it has less brand awareness as a CM contact center BPO service provider. IBM Global Process Services needs to invest in marketing/communications to correct these market perceptions within its installed base and in the general market. Based on conversations with midsize clients, Gartner estimates that IBM Global Process Services may be perceived to be relatively more expensive and its offerings more complex. IBM Global Process Services needs to increasingly leverage synergies with other IBM business units, such as the Software and Consulting groups, providing its customers with the benefit of and access to IBM's full array of capabilities. Clients cite rigid pricing (negotiability), legal determination, complex internal processes and CM contact center BPO agent turnover in key offshore locations as challenges of IBM Global Process Services. NCO Group NCO Group is a $1.68 billion organization in outsourced business process solutions. The company appointed Ronald A. Rittenmeyer, the former CEO of EDS, as its CEO in 2011. NCO has been in operation for more than 80 years and has grown by acquisition, with 37 acquisitions since 1994. NCO employs 32,000 employees, of which 21,500 FTEs including 1,500 WAH agents are dedicated to CM contact center BPO services in more than 100 call centers in 11 countries. The company provides solutions for customer acquisition, growth, care and resolution. From an industry perspective, NCO continues to focus on financial services, communications, high tech, transportation, utility, healthcare, retail and government. NCO continues to focus extensively on issues such as the use of best-in-class facilities; extensive agent induction and training, with constant knowledge management programs to tailor service to each customer's needs; and Six Sigma-based quality processes to focus on customer satisfaction and customer experience. The company's high level of client retention 90% for the past few years is a result of customer-focused programs and initiatives. NCO has a strong onshore, nearshore and offshore presence in English- and Spanishspeaking markets. More than 30% of its revenue is derived from outside North America. NCO has a rapidly expanding WAH program because it caters to this increasingly demanding support environment. Clients cite culture, flexibility and strong multilingual skills as key strengths of NCO.

Sitel NCO has limited but growing nonvoice multichannel service offerings; the company's primary focus is on voice-based CM contact center BPO services. The company has low market visibility and brand awareness outside North America and Australia. Sales and marketing execution is fairly low-key, and NCO primarily receives incremental revenue growth from its existing clients when compared with new clients. In most regions outside the Americas and Australia, NCO is not seen as a key CM contact center BPO service provider because of its limited assets and service offerings. Clients cite employee attrition and inconsistent performance across centers as key challenges of NCO. Sitel employs more than 57,000 FTE and WAH agents that support more than 300 clients in 36 languages from more than 135 centers in 26 countries; one in four programs is run as a multilingual program. Sitel continues to invest in WAH agents in North America and Western Europe. The company's service offerings include inbound customer care, technical support services and customer acquisition services, and it has a defined vertical industry focus on communications, high tech (Internet, wireless and technology providers), financial services, media and entertainment, retail, transportation, and utilities. Sitel has deep domain expertise in high-growth industries, such as technology, consumer electronics and communications. The company has strong geographical presence in North America, Latin America and Europe. It has extensive CM contact center BPO service offerings, including multilingual capability, in all key regions. There is a strong leadership team, with deep industry and process knowledge, and a very hands-on approach (that is, the leadership team regularly engages in operational issues). Sitel's support of multiple languages is one of the largest in the industry, with 36 languages currently supported across all of its contact centers that back 25% of all the interactions. Sitel is exhibiting strong growth in the very demanding retail sector with a number of key customer wins during the past 12 months. Sitel has limited technology exposure. The company has to partner with a technology vendor or acquire new technology to deliver innovative CM contact center BPO services. The company has high concentration on the high-tech and communications sectors in North America. Sitel needs to further improve its vertical industry concentration and client concentration in key markets, such as North America, Australia and New Zealand, and Western Europe. Clients cite challenges with Sitel when managing increasing levels of complexity and consistency in multiprocess/program and multigeography (that is, North America and Europe) engagements. Stream Global Services In October 2009, Stream and etelecare completed their merger, hence creating a global $800 million CM contact center BPO service provider. The combined company retained the name Stream Global Services and currently has 50 service delivery centers and more than 30,000 FTE agents in 23 countries. Stream traditionally focused on customer care and support for the high-tech sector, while etelecare focused on sales functions for a wider range of industries. There is limited overlap, both in clients and assets; the new Stream Global Services has a more balanced service offering, industry focus and geographical footprint. Stream Global Services' vertical industry focus is on

technology, communications, banking and financial services, media and entertainment, healthcare, retail, and travel. Stream Global Services' business acumen and project management skills were recognized by clients as being above average. The company has a good mix of onshore and offshore service delivery assets across North America, Europe and Asia/Pacific, and clients cite above-average feedback for satisfaction and quality of services delivered. Stream Global Services' leadership team for business and technology functions demonstrates a strong sense of purpose and commitment toward effective and efficient service delivery. Stream Global Services has high levels of industry concentration, with a focus on technology and communications clients, which make up more than 66% of its total revenue. The company has not consistently appeared in open-market, competitive evaluations in other industries, besides those mentioned above. Clients cite that Stream Global Services has sometimes struggled with cross-sell and upsell opportunities, as well as taking advantage of the merger with etelecare. The company continues to experience business and operational integration issues postmerger with etelecare; Stream Global Services still needs to rationalize its operational assets to ensure consistent delivery across locations and functions in its expanded operational network. Sutherland Global Services Sutherland Global Services, a Rochester, New York-based US$540 million company, has more than 26,000 FTE agents dedicated to CM contact center BPO services serving clients from 33 delivery locations in 10 countries. Sutherland Global Services has grown into a credible CM contact center BPO provider, with a focus on the insurance, healthcare, banking and financial services, retail, communications, and travel industries. The company is focused on organic growth, aggressively expanding facilities in the Philippines, and inorganic (M&A) growth, with the acquisition of Adventity Global Services in 2010. Sutherland has good geographical presence, with sales and delivery locations in North America and Asia/Pacific. Clients cite strong management team, process knowledge, flexibility and good technical capabilities as key strengths of Sutherland. Clients also cited Sutherland's strong business process utility (BPU) offerings, operational discipline and service delivery capability, as well as proven transition methodology. include limited global brand presence, especially outside North America; the company has a limited brand awareness beyond the existing customer base. The company has limited presence and customers based outside Asia/Pacific and North America, especially in Latin America and EMEA. Sutherland has high levels of industry concentration; its client concentration is in the communications and service sectors. Clients cite limited proactiveness with regard to recommending process improvements, risk taking, and sharing of best practices as it relates to legacy contracts as key challenges of Sutherland.

Sykes Sykes has approximately 40,400 FTE agents serving clients from more than 83 locations in 24 countries. The ICT Group acquisition in 2010 helped expand Sykes' geographical presence in Canada, Mexico and Australia, as well as enhancing the company's depth in both the financial services and communications sectors. Sykes has strong geographical presence in North America, Latin America, Europe and Asia/Pacific, which translates into a good regional revenue mix. The company is expanding its geographical concentration to new markets, with a specific focus on growing its client base in Asia/Pacific. Its vertical industry focus is on banking and financial services, communications, technology, consumer electronics, and healthcare. Strong operational discipline and performance demonstrate Sykes' understanding of CM contact center BPO services. It is responsive to changing client needs, as seen by the company's customer-centric program development initiatives. Sykes has strong global presence, language capabilities and a focus on customer experience. The company exhibits sustained investments in new and emerging markets, new service offerings, including nonvoice multichannel services, and vertical industry markets. Clients cite deep industry process knowledge and lower attrition rates as the company's key strengths. Sykes' attention to the strategic account management program is recognized by clients, and it illustrates the company's focus on and commitment to client relationships. Clients cite the lack of investments in training and development for frontline agents and technical and team managers to help further improve their skills in industry-centric CM processes, customer experience and unstructured client engagements as key challenges of Sykes. Sykes' focus on operational discipline overshadows its investments in innovation and analytics-based service offerings; the company needs to invest further in technology and process innovation and analytic services currently available only to strategic clients to meet growing client needs. Although the integration of ICT Group into the greater Sykes organization continues to show progress, Sykes needs to further rationalize its operational assets across multiple geographies and recent M&As (including that of ICT Group) to ensure consistent customer experience, service offerings and delivery, and organizational culture across locations and functions. Teleperformance Teleperformance is the largest CM contact center BPO service provider in the world, by revenue and geographical footprint. The company has more than 128,000 FTE agents that support 66 languages and dialects from more than 260 centers in 50 countries. Teleperformance continues to focus on key vertical industries: financial services, communications, travel and transportation, technology, discrete manufacturing, and retail. The company continues to plan its expansion through organic and M&A-based growth initiatives; recent acquisitions include Turkey-based Metis Group (50%), U.S.-based TLScontact (75%) and U.S.-based becogent. Besides CM contact center BPO services, the company also offers project-based consulting services for captive centers and contact center infrastructure services. Teleperformance generates a significant amount of its revenue from Europe, with proportional exposure. Teleperformance has an enviable corporate social responsibility (CSR) program that is sponsored globally but led and delivered locally (that is, Citizen of the World and Citizen of the Planet).

Teleperformance continues to experience revenue growth (2010) and has a strong cash position, a continued M&A appetite (acquisition of technology, as well as local and regional service providers), and extensive in-house R&D capabilities specific to CM contact center BPO services. The company has good local leadership, with good business acumen supported by a strong global organization and leadership team. It continues its investment focus on North America and emerging markets. The company is also known for its strong CSR programs. Teleperformance provides excellent multilingual services, with less than 20% of its revenue being generated from outbound activities. Clients cite flexibility, geographical footprint, partner-style relationship and operational excellence as key strengths of Teleperformance. Teleperformance's rapid growth continues to raise challenges and issues around consolidation, such as operations and integration of various acquisitions with consistent service delivery, similar processes, and contract and management approaches. Due to its size and geographical footprint, Teleperformance, as is the case with most large multinational corporations, has high levels of currency risk exposure. Clients cite Teleperformance's staff turnover and slowness to change, as well as it being less responsive and not proactive, suggesting that process and technology enhancements are challenging for the company. TeleTech TeleTech is a customer experience management service and technology company. It has approximately 44,000 FTE and WAH agents across its CM contact center BPO business supporting 30 languages and dialects from 58 centers from offices in 24 countries, as well as supporting end customers across 90 countries. Besides CM contact center BPO services, the company provides services to optimize the multichannel customer experience across the customer life cycle, including strategy delivered through its management consulting division, Peppers & Rogers Group. The company also provides marketing services and revenue-generation solutions, back-office and human capital solutions, including learning services. The company also has developed technologybased solutions, delivered through the cloud, on-premises or hybrid models. IVR and turnkey cloud-based contact center applications are provided based on a build-operate-transfer model, and these solutions are sold with or without agent support. However, TeleTech is not well-known to buyers in the CM contact center BPO market for its technology and network capabilities, which are well-positioned for on-premises or cloud-based services. The company has solid technology and network skills, capabilities, and assets that aid in program migration and accelerated time to value. TeleTech's acquisition of the Integrated Contact Solutions business unit of eloyalty extends its product offering to include on-premises system integration and managed services. TeleTech continues to expand its client and geographical concentration. Its vertical industry focus is on communications, healthcare, banking and financial services, retail, automotive, government, technology, travel, and transportation. TeleTech has strong vertical industry offerings, network and technical skills, and assets. It has the ability to operationalize and execute on strategy. The company has a strong nonvoice multichannel service offering and a high nonvoice multichannel services to voice-based services ratio. Clients point to TeleTech's customer management vision and investments in support of contact center and revenue-generation services. TeleTech continues to build on its good geographical coverage and strong business acumen, as well as expertise in revenue generation, customer management consulting, and customer service and support.

TeleTech also provides strong business process as a service (BPaaS) offerings for cloud services related to CM contact center BPO, such as Cloud Contact Center Enterprise and Cloud Contact Center for small and midsize businesses. TeleTech focuses on performance-based pricing, which is favored by many multinational organizational clients. The company has a higher level of sales focus at the expense of marketing. TeleTech's cost of services is perceived to be more expensive than its competitors'. Clients cite TeleTech's limited multilingual capabilities for European languages, rigid corporate culture, poor retention of senior management and inconsistent CM contact center BPO capabilities/skills in some delivery centers, especially in sales and customer acquisition services, as challenges. TeleTech is not known to buyers in the CM contact center BPO market for its technology and network capabilities; the company needs to improve its marketing initiatives. In reality, the company has solid technology and network capabilities that are overshadowed by process offerings. TeleTech must better articulate and market its technology and network capabilities. TeleTech customizes its offerings extensively for each client, making standard offerings and pricing difficult to maintain and potentially making a higher-cost support environment. Vertex Business Services Vertex Business Services is a US$500 million company serving clients from approximately 58 locations across North America, the U.K. and India. The company has approximately 200 WAH agents. Vertex has grown into a credible CM contact center BPO provider that focuses on the government, utilities, retail, communications and financial services industries. The company announced the sale of its Private Sector division (approximately 1,400 FTEs) to Capita Group in September 2011. Vertex continues to expand its client and geographical concentration and plans to expand into South Africa, Latin America, China and Australia in the near term. Vertex has good service offerings and a proactive approach to change management. The company also has a strong management team with a focus on delivery excellence. Clients cite strength in high-volume services and standard customer management services, as well as a responsive sales organization. include a limited geographical presence and brand awareness outside of North America, India (used primarily as a delivery location) and the U.K. The company has no non-english-language or multilingual capability. The company has a high vertical/industry concentration (revenue contribution) in the government, utilities and retail industries, as well as a high client concentration in the U.K. and North America. The company has limited offshore and nearshore capacity and capabilities, with the exception of India as its delivery location. Clients cite weakness in managing and resolving complex customer queries, agent empathy and lack of consistency in service quality. West Communication Services West Communication Services (West) manages more than 17,000 agents from 44 centers globally and an additional 7,700 WAH agents managed under West at Home, all based in North America. The combination of a blended model of agent work (contact center and West at Home), automated customer contact solution (West Interactive) and offshore premises-based services maximizes

value for West's clients. West has sales and operations in the U.S., Canada, Europe, the Middle East, Asia/Pacific and Latin America. In addition, West offers conferencing and collaboration services, event services, alerts and notifications, Internet Protocol (IP)-based unified communications solutions and emergency communications services. Besides West Interactive, West at Home, West Customer Management Group and West Direct, all related to CM contact center, the company also has West Asset Management (receivables management services), West Business Services (business-to-business sales and account management services), InterCall (audio, Web and videoconferencing services) and Intrado (emergency communications). West focuses on the telecommunications, banking, retail, financial, technology and healthcare sectors. West has earned a sound reputation for its consistent delivery and service to clients. Client feedback highlights high quality/value for fees paid. The company has extensive service offerings that differentiate by client needs. West has a strong WAH offering the company uses the virtual agent model for its WAH service delivery model. West offers solid execution and technology implementation; it supports innovative approaches to client needs. Clients cite West's strong operations and project management capabilities, good quality of service, flexibility and competitive pricing as strengths. Clients cite West's limited analytics capabilities, responsiveness, and project management capabilities as key challenges. The company's multichannel (nonvoice) offering is still relatively small when compared with total interactions, and it remains relatively weaker than competitive offerings (approximately 7% of total interactions). Contrary to other markets and providers, West has experienced limited growth in Web chat service in retail and business-to-business engagements. This situation is likely due to its ongoing strategy "to follow clients," rather than "to lead clients," with regard to service delivery and multichannel offerings. It has high client concentration in North America, with limited exposure in other regions, especially in emerging markets.