Contact Center Outsourcing Annual Report 2016 The Rise of Digi

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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EGR-2016-1-R-1823
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EGR-2016-1-R-1823
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How to read this document
Information desired
Where/how to locate the information
Summary of key
messages
Key facts or analyses

related to a specific
topic
The section on key messages summarizes the CCO market insights

The key messages are categorized along three dimensions:
Market size and buyer adoption
Value proposition and solution characteristics
Service provider landscape
A section is devoted to each dimension of the summary of key messages (listed

above)
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 Groups outlook on the CCO market for 2016-2017
Definitions of
unfamiliar terms and
related research
Acronyms or technical outsourcing terms are defined in the glossary of terms

(Appendix)
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
Summary of key messages
13
Section I: Market size and buyer adoption

Summary
Market size and growth
Market Trends:
Growth of outsourcing
Evolving buyer requirements
Contract characteristics:
Contract activity
Sourcing model adoption
Contract scope
Adoption trends by:
Buyer industry
Buyer geography
Languages supported
Buyer size
16
17
18
19
19
20
23
23
24
25
26
26
27
29
30
Section II: Value proposition and solution characteristics

Summary
Digital transformation of contact center
31
32
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
Delivery model
Channel mix
Technology
Automation
Value-added services
Pricing model
35
36
39
42
44
46
48
Section III: Service provider landscape

Summary
Service provider classification
Service provider growth rate by player segment
CCO market share
Leading service providers by geography
Leading service providers by industry
Service provider investments
50
51
52
53
54
55
56
57
62
Appendix
Publicly-announced contracts in 2015
Glossary of terms
CCO research calendar
References
65
66
68
70
71
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Contents
Solution characteristics
Appendix

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Our research methodology is based on four pillars of strength

to produce actionable and insightful research for the industry
Robust definitions and

frameworks
Market thought leadership

Actionable and insightful research
Syndicated and custom research deliverables
Primary sources of
information
Diverse set of market

touch-points
Fact-based research
Total Value Equation
Strategic focus
Impact on cost of process
High
10x
Impact on efficiency or
effectiveness of process
Process expertise
Impact on value
proposition to market
Enterprises
1x
Service
Providers
Services
Industry
0.1x
Low
Low
High
Domain expertise
Proprietary & Confidential. 2011, Everest Global, Inc.
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 Groups CCO research is based on multiple sources of

proprietary information (page 1 of 2)
1
Proprietary database of 2,500+ CCO contracts (updated annually)

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
Service providers covered in the analysis
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
EGR-2016-1-R-1823
Everest Groups 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 Groups definition of the CCO market is centered on

the delivery aspects of customer interaction
Contact center pyramid
Strategy
Operational services
Strategy
Channel management
Customer analytics
Customer retention management
Performance management & reporting
Outbound sales services
Inbound sales services
Order fulfillment and transaction processing
Payment collections
Customer service
Customer interaction technology
Traditional CCO, primarily

focused on individual
operational services
Now, value-added services are
increasingly being included in
CCO
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 multichannel 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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10
We break each element into subprocesses of the customer

interaction value chain
Strategy (in-house)
Contact center sourcing strategy
Alignment of contact center
strategy with corporate strategy
Strategy
Operational services
Strategy
Channel management
Channel mix
Customer data integration and
analysis
Contact handling and routing
Customer analytics
Customer profiling and
segmentation
Big data / social media
monitoring and analysis
Customer satisfaction tracking
Channel management
Customer analytics
Customer retention management
Performance management & reporting
Outbound sales services
Inbound sales services
Order fulfillment and transaction processing
Payment collections
Customer interaction
technology
Technology adoption strategy
Solution hosting, maintenance,
and support
Outbound sales
services
Outbound sales
Telesales
Telemarketing
Data management
Data collection
Data cleansing
and refresh
Inbound sales
services
Inbound sales
Cross- / up-selling
Customer retention
management
Customer lifecycle management
Customer experience
management
Loyalty programs
Customer service
Customer interaction technology
Order fulfillment and

transaction processing
Order management
Order validation
Order entry
Order processing
Order amendment / exception
handling
Product activation
Return/refund/rebate processing
Billing and delivery queries
Payment collections
Early-stage collections
Channel identification
Customer loyalty
maintenance
Late-stage collections
Customer-at-risk analysis
Customized treatment
plan

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Performance management &

reporting
SLA adherence
Key performance metrics
Performance optimization
Operational and management
reporting
Customer service
Outbound service
Query resolution / call-backs
Inbound service
Technology support / helpdesk
Service support
Complaint handling
Call escalation
General query handling
Schedule-related enquiries
General product or service
information requests
11
Contents
Appendix

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12
(page 1 of 3)

Stable growth and spend in CCO market
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
Rise of multi-geography and sole-source contracts
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
Highest growth in emerging geographies
From a geography perspective, North America continues to
grab the largest portion of the CCO pie and will remain so
for quite some time. Emerging geographies such as Asia
Pacific, Middle East, and Latin America continue to drive
the highest growth and present significant new opportunities
New economy buyers drive adoption of CCO
Market growth is being driven from industries such as
healthcare and travel & hospitality, while telecom and
banking, financial services & insurance (BFSI) continue to
dominate the market. New economy buyers within these
industries, that usually fall in the mid- and large-sized
category, will be the torch bearers for growth in the future
Market size for CCO over time

US$ billion
60-65
55-60
2011
2012
XX%
70-75
75-78
65-70
2013
2014
2015
CAGR
78-81
2016E
CCO revenue by industry over time (both new deals and renewals)
US$ billion
15-17
100% =
Others1
Travel & hospitality
Retail
Healthcare
19-21
CAGR
(2013-2015)
5-10%
9%
3%
5%
10%
4%
6%
10-15%
8%
5%
5%
10%
5-10%
5%
6%
10-15%
11%
5-10%
Media
Government
Technology
10%
BFSI
17%
<5%
17%
5-10%
<5%
Telecom
32%
31%
2013
2015

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<5%
13
(page 2 of 3)
Transition of contact center to digital-era
The value-proposition and solution characteristics of
digitally transformed contact center have evolved focusing
on six solution characteristics delivery model, channel
mix, technology, automation, value-added services, and
pricing model
Rise of onshoring activity to enhance experience
To enable the best service quality, clients are actively
demanding higher onshore delivery capabilities. It has also
led to a growth in adoption of work-at-home agents model
Growth of digital channels in new contracts
As mobile and Internet penetration increases globally, the
shift to digital channels such as social media and chat is
being observed in the market, which is evident by the fact
that these two channels are the fastest growing and
account for 10% of the total revenue
Increased adoption of enabler technologies
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
same has also resulted in higher inclusion of value-added
services in contracts, with more than 60% of contracts
having at least one of VAS within scope
Value proposition
1
Delivery
process
excellence
Focus on quality, rather than cost containment, has led

to the adoption of a balanced onshore-nearshoreoffshore delivery model
Delivery
model
2
Building
digital
capabilities
5
Enhancing
business
value
/outcomes
Channel mix Shift from voice-only contact center solutions to multichannel contact center with increased adoption of newage channels
Technology
Focus has shifted from CRM and communication

technology to enabler technologies such as automation,
analytics, and social media
Automation
Forward-looking solutions such as cognitive automation

and proactive customer outreach to increase service
quality and delight customers
Value-added The scope of CCO deals is expanding beyond

services
operational processes to include value-added processes
Building non-linear, mutually beneficial pricing
structures, which reward service delivery that matches
buyer expectations
Pricing
model
Pricing structure in new CCO contracts over time

Inclusion within contracts
83%
2012-2013
2014-2015
82%
31%
20%
6%
FTE-based

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Transaction-based
13%
Outcome-based
14
(page 3 of 3)

BPO pure-plays offering CCO saw higher growth
The CCO service provider landscape is broadly divided
into CCO specialists, BPO pure-plays, and integrated
IT+BPO players
Among these, CCO specialists dominate the market and
are the largest in terms of sheer size, but have witnessed
slowing growth in the past 12-18 months. BPO pure-plays
on the other hand, with a focus on delivering CCO as part
of an integrated BPO offering, have been witnessing the
highest growth in the market
Targeted vertical and geography focus
Service providers have a targeted focus with respect to
geography and industries, as evident by the fact that
except Teleperformance, no other service provider
dominated all the geographies and key industries in 2015
Ramped up investments in scale and technology
Service providers continue to invest in building their scale
and technology portfolio to meet evolving buyer
requirements. Enabler technologies have taken center
stage from a CCO investments perspective, accounting for
almost half of the investments reported by providers in the
last two years. Within enabler technologies, analytics,
automation, multi-channel solutions, and social media are
the leading investment themes
2015 CCO service provider revenue

Revenue in US$ billion
Growth rate
(2014-2015)
Teleperformance
~3.7
Convergys
~3.0
Atento
~2.0
Sitel
CCO
specialists
IT+BPO
players
~1.4
<5%
<5%
~1.3
15-20%
Sykes
~1.3
<5%
Alorica
~1.2
95-100%
TeleTech
~1.0
<5%
EGS
~1.0
<5%
Contax
~0.9
<5%
Webhelp
~0.8
10-15%
Transcom
~0.7
<5%
HPE
Dell
Sutherland
<5%
~0.6
~0.5
5-10%
~1.6
Capita

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<5%
Concentrix
Xerox
BPO pureplays
<5%
~1.1
~0.8
<5%
5-10%
10-15%
Aegis
~0.5
<5%
Firstsource
~0.5
<5%
15
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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16
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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17
CCO market size and growth

The global CCO market grew at ~4% in 2015 to reach US$75-78 billion, accounting
for ~25% of the total contact center spend
Market size for CCO over time
US$ billion
Overall contact center spend in 2015

US$ billion
XX%
CAGR
100% = 300-320
55-60
60-65
65-70
70-75
75-78
78-81
Outsourced
2011
2012
2013
2014
2015
~25%
~75%
In-house /
GICs
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
Source:

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18
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
100% =
280-300
300-320
Outsourcing
22%
25%
In-house
78%
75%
2010
2015
Source:
CAGR
(2010-2015)
Key reasons for increasing share of outsourcing

The CCO industry has evolved from low complexity
transactional work to include a broad range of services that
drive the overall customer experience
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
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
multiple buyers to improve customer satisfaction

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19
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
2014
2015
Key factors behind outsourcing

Importance on a scale of 1 to 5
Excerpts from buyers feedback
3.9
Cost reduction
3.7
Gaining specific expertise

lacked in-house
2.7
3.3
3.0
Improving agility/flexibility
3.1
Not
important
Sample size:
Source:
Significantly
important
78 buyer feedback surveys and interviews conducted between January 2014 till December 2015
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20
(page 2 of 3)
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
Traditional
KPIs
Responsiveness
4.4
Relationship
management
4.4
Implementation
4.2
Proactiveness
3.8
New age
KPIs
Better insights/
analytics
3.7
Innovation
Poor
performance
Sample size:
Source:
Buyers rated service providers highly on

traditional Key Performance Indicators
(KPIs)
This indicates that providers are doing well
with respect to explicit and mutually
agreed upon performance criteria
3.7
Buyers rated their incumbent providers

relatively lower on emerging performance
criteria
These are not explicitly stated in contract
agreements but have increasingly become
important in response to evolving buyer
needs
Buyers expect service providers to perform
beyond the traditional KPIs and contribute
towards better customer experience
Excellent
performance
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21
(page 3 of 3)
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
KPIs
2014
Responsiveness
Relationship
management
2015
The growing relevance of emerging KPIs on the

overall rating indicates that buyers are increasingly
evaluating service providers on these new-age metrics
in addition to more traditional SLAs
Buyers expect service providers to proactively pitch for

innovative ideas in contact center operations and
capabilities
The impact of implementation on overall rating has

decreased in 2015, suggesting that smooth transition
and high quality implementation has become tablestakes in the market
Proactiveness
Innovation
1
Sample size:
Source:
High
Results based on annual buyer feedback surveys

2014-2015
The relevance of key performance metrics increased
from one year to the next, and heavily impacted
buyers ratings of overall service provider performance;
these include relationship management, proactiveness,
and innovation
Implementation
Better insights / analytics
Low
Based on the correlation coefficient between individual KPI ratings and overall ratings
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22
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)
US$ million
Average TCV of CCO contracts (renewals/extensions)

US$ million
49
39
32
24
2009-2011
15
13
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
Source:

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23
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
Industries adopting
sourcing model1
55%
Competitive
BFSI
Telecom
Healthcare
78%
Industries adopting
sourcing model1
45%
Sole-source
22%
2012-2013
1
Sample size:
Source:
Energy & utilities

Manufacturing
Technology
The share of sole-source contracts

doubled in 2014-2015, which indicates
that existing relationships between
buyers and service providers continue to
be strong. More contracts are being
signed by buyers based on prior
successful relationships with service
providers
This trend also reiterates the fact that the
TCV of extension/renewal contracts is
increasing, which is also an indicator of
growing confidence among buyers with
existing relationships
The contracts with competitive sourcing
model have witnessed a decrease over
the years, which leads to a balance in
sourcing model within CCO
2014-2015
Industries with more than 70% of contracts adopting the sourcing model
896 CCO contracts signed between January 2012 to December 2015
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24
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
Multiple regions
10%
Single region
90%
Till 2012
Sample size:
Source:
502
12%
88%
2013-2014
146
As buyers expand across multiple

geographies around the globe, they are
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
operational parameters with regional
variations
It also allows buyers to offer a consistent

experience to their end-customers
irrespective of the region, and thus drive
higher customer satisfaction
20%
80%
2015
2,463 CCO contracts signed till December 2015

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25
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
(2013-2015)
15-17
100% =
19-21
Others1
Retail
9%
3%
5%
10%
5-10%
4%
6%
10-15%
Healthcare
8%
10%
5-10%
Media
Government
5%
5%
5%
6%
10-15%
Technology
10%
11%
5-10%
BFSI
17%
Travel & hospitality continues to experience

healthy growth in CCO adoption, led by Online
Travel Agencies (OTAs) and airlines
Surge in CCO within online retailers, especially

within developing economies, is driving growth in
retail
<5%
17%
5-10%
<5%
Telecom
32%
31%
<5%
2013
1
Note:
Source:
The surge in CCO adoption in healthcare due to

the introduction of Affordable Care Act (ACA) in
the United States in 2012-2013 has settled now,
but the vertical continues to see steady growth
2015
BFSI has seen flat growth, resulting in loss of

market share in the last 12-24 months
Though telecom continues to be the largest CCO
vertical, high cost pressure on players has led to
controlled outsourcing spend and below market
growth rate for the vertical
With telecom and BFSI being the oldest and the
most penetrated industries for CCO, growth
opportunity in these verticals is relatively lower
Others include energy & utilities, logistics, manufacturing, and professional services
Based on the capability assessment of 25+ service providers covered in this analysis (refer to page 8 for a complete list)
EGR-2016-1-R-1823
26
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
(2013-2015)
15-17
100% =
19-21
growth rates in 2015 due to depreciation of local currencies
LATAM
11%
10%
<5%
APAC
11%
12%
UK
13%
13%
CEMEA1
18%
18%
5-10%
~5%
5-10%
North America
48%
47%
United Kingdom continues to grow at just above market rate,

driven by public sector spending
While Continental Europe saw consolidation with several large

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

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
resulting in higher agent efficiency, North America has managed
to maintain its growth rate in recent years
<5%
2013
1
Note:
Source:
2015
against the US dollar, but otherwise posted high to moderate

growth, over the last two years, when excluding currency effects
China witnessed huge surge in demand, driven by adoption by
MNC buyers who leveraged outsourcing in other regions, as well
as by local buyers to compete with global brands
Continental Europe, Middle East, and Africa

EGR-2016-1-R-1823
27
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 by FTEs
China CCO market size

US$ billion
CAGR
Number of FTEs in 000
120-130
1.8-2.0
65-70
0.9-1.1
2010
CAGR
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: Chinas CCO providers can support businesses navigating the countrys 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
Source:

EGR-2016-1-R-1823
28
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
750-800
850-900
Others1
Asian languages2
2%
10%
2%
11%
European
languages3
34%
35%
100% =
English
1
2
3
Note:
Source:
54%
52%
2013
2015
CAGR
(2013-2015)
15-25%
The strong growth momentum from Middle East

and Africa has resulted in healthy growth of other
languages over the last 18-24 months
Asian languages were put on a high growth

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
down in recent years
5-10%
5-10%
<5%
Others include Middle Eastern and African languages

Asian languages include Korean, Japanese, Mandarin, Cantonese, Indonesian, Vietnamese, Thai, Hindi, and other regional Indian languages
European languages include Spanish, Portuguese, French, Dutch, Danish, Russian, Norwegian, Nordic, Swedish, etc.
EGR-2016-1-R-1823
29
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
(2013-2015)
16-18
100% =
19-21
Small buyers4
17%
15%
<5%
Mid-sized buyers3
15%
16%
5-10%
Large buyers2
Very large buyers1
1
2
3
4
Note:
Source:
19%
20%
49%
49%
2013
2015
Revenue from small buyers grew at market rate,

driven by relatively small-sized service providers
looking to expand their business by tapping such
clients
Mid-sized and large buyers are leading the overall

growth in the market, driven by new economy
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
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
5-10%
<5%
Very large buyers have revenue in excess of US$10 billion

Large buyers have revenue between US$5-10 billion
Mid-sized buyers have revenue between US$1-5 billion
Small buyers have revenue less than US$1 billion
EGR-2016-1-R-1823
30
Contents
Summary
Delivery model
Channel mix
Technology
Automation
Value-added process
Pricing model
Appendix

EGR-2016-1-R-1823
31
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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32
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
EGR-2016-1-R-1823
33
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
resolution
Customers
expect agents to
understand their
issues and
resolve them in a
shorter duration
of time
Multi-channel support
Support across
emerging
channels such
as chat and
social media
Self-service
SELF
SERVICE
Personalized experience
Preference for
self-service over
contacting a
support agent for
elementary
enquiries
Customers
expect to receive
only filtered
information that
may be relevant
to them
Changing value proposition to meet emerging customer needs

Delivering process excellence
Source:
Building digital capabilities
Enhancing business outcomes

EGR-2016-1-R-1823
34
The changing CCO value proposition is shaping the following

solution trends to deliver superior experience preferred by
digital consumers
Value proposition
Delivery process
excellence
1
Building digital
capabilities
5
Enhancing
business value
/outcomes
Delivery model
Focus on quality, rather than cost containment, has led to the adoption of
a balanced onshore-nearshore-offshore delivery model
Channel mix
Shift from voice-only contact center solutions to multi-channel contact

center with increased adoption of new-age channels
Technology
Focus has shifted from CRM and communication technology to enabler

technologies such as automation, analytics, and social media
Automation
Forward-looking solutions such as cognitive automation and proactive

customer outreach to increase service quality and delight customers
Value-added
services
The scope of CCO deals is expanding beyond operational processes to

include value-added processes
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
Source:

EGR-2016-1-R-1823
35
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
Significant
onshore delivery1
35%
Predominantly
offshore delivery2
763
377
49%
53%
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
buyers towards customer retention than cost
reduction. Low quality of service is considered
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,
they increasingly prefer multi-channel
contracts and automation solutions in a bid to
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
onshore FTEs
65%
51%
2008-2010
1
2
Sample size:
Source:
2011-2013
47%
2014-2015
Contracts with more than 25% FTEs located in onshore locations

Contracts with more than 75% FTEs located in offshore/nearshore locations
1,617 CCO contracts signed between January 2008 and December 2015
EGR-2016-1-R-1823
36
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
Factors driving WAHA adoption
Key considerations for buyers

Fluctuations in staff requirements
Fluctuations in staff requirements
Ensure alignment between strategy and

perceived success of implementation
Security and compliance

Increased onshoring requirements
Adopt security and compliance requirements

with regards to customer data and agent
monitoring & authentication tools
WAHA delivery model
Access to specialized talent
The choice of delivery model - whether hub and

spoke, virtual, or hybrid will impact the scope of
available WAHA capabilities
Company culture
Source talent from any location
Source:
As WAHA might
not be suitable
for all
businesses,
buyers should
carefully assess
the feasibility of
its adoption by
evaluating their
business model,
the risks
associated, and
the value
derived by its
inclusion
Familiarity and experience in managing a

remote workforce is necessary to fit WAHA into
organizational culture

EGR-2016-1-R-1823
37
Delivery model focus on WAHA
(page 3 of 3)
The scale of WAHA delivery consists of pure-play WAHA providers and traditional
CCO providers
WAHA scale across leading service providers

Number of FTEs
Working Solutions
Pure-play
WAHA
providers
6,000
Arise
5,000
Live Ops
5,000
VIP Desk
4,000
Kelly OCG
2,500
Sykes
7,000
Convergys
2,750
Sitel
2,100
Teletech
2,100
Teleperformance
2,000
Concentrix
2,000
Sutherland
1,650
CGI
Xerox
Source:
Pure-play WAHA providers have

WAHA model at the core of their
business, with typically driving
more than 95% of their CCO
revenue through it
Currently, about 25,000 WAHA
agents are employed by pure play
providers
7,500
Alorica
Traditional
CCO
providers
1,500
1,200
Traditional CCO providers have

invested in WAHA model to
supplement their brick & mortar
model, with typically driving less
than 10% of their revenue through
WAHA
Approximately, 30,000 WAHA
agents are employed by traditional
service providers

EGR-2016-1-R-1823
38
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
Non-voice
100% =
Social media
Chat
E-mail
CAGR
(2011-2015)
14-16
17-18
19-21
1%
3%
7%
3%
4%
4%
7%
45%
10%
21%
9%
51%
Voice
89%
2011
Note:
Source:
84%
2013
78%
E-mail continues to grow at a

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

primary channel of customer
interaction, its share dropped to
below 80% for the first time in 2015
4%
2015
Chat and social media have been

the fastest growing channels in
recent years, driven by increased
penetration of mobile and Internet
devices
Together, these channels now
constitute more than 10% of the
total CCO revenue
EGR-2016-1-R-1823
39
Channel mix
(page 2 of 3)
Adoption of multi-channel contracts is gaining momentum, driven by changing

consumer preferences to connect through multiple channels
Adoption of multi-channel CCO contracts over time

Number of contracts
100% =
More than
two channels
One/two
channels
Sample size:
Source:
2,086
377
23%
26%
77%
74%
Till 2013
2014-2015
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
As buyers and service providers acknowledge

this trend, they increasingly adopt multichannel solutions within the scope of
contracts, that includes new-age channels
such as chat and social media

EGR-2016-1-R-1823
40
Channel mix
(page 3 of 3)
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
Number of multi-channel contracts
Social
media
Till 2013
2014-2015
Voice continues to be the

dominant channel included
within multi-channel contracts
The inclusion of voice and email

has decreased recently,
indicating the shift of consumer
preferences towards chat and
social media
New-age channels such as

social media and chat have seen
maximum increase in inclusion
within multi-channel contracts
recently. It emphasizes
consumers growing preference
for these new-age channels over
voice and email
12%
15%
New-age
channels
Chat
48%
58%
Email
88%
83%
Traditional
channels
Voice
99%
96%
Sample size:
Source:

EGR-2016-1-R-1823
41
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
Communication technology
CRM
technology
Communication
technology
Enabler
technology
Key
objective
Organize, automate, and

synchronize all customer-facing
functions
Supports all access channels

that are used by customers
Facilitate better customer

experience by ensuring process
efficiency and quality of service
Technology
ownership
Primarily proprietary, with some

instances of partnership-led
Mix of proprietary and

partnership-led
Primarily proprietary, with some

instances of partnership-led
Maturity
level
High
Medium to high
Medium

EGR-2016-1-R-1823
42
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
CCO technology investments by category over time
Percentage of investments
Enabler
tchnology
Others
12%
72%
Social media
42%
Analytics
Multi-channel
solutions
16%
19%
25%
2008-2010
12%
40%
26%
CRM
technology
Enabler technology-related investments reported in

2014-2015
Number of instances
35%
60%
Communication
technology
18%
14%
9%
2011-2013
2014-2015
Automation
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:
Source:
Based on 150+ technology investments reported by service providers till December 2015
EGR-2016-1-R-1823
43
Automation
(page 1 of 2)
Among three types of automation solutions in CCO, the forward-looking automation

solutions have maximum impact on customer experience
Low
High
High
Forward-looking automation
Automated post-service follow-up,
proactive consumer outreach, social
media monitoring, and notification
Impact on
customer
experience
Assisted automation: Cognitive

technology that is able to learn the
pattern of agent actions and recurring
issues over time and push relevant
questions and responses that would
be useful for conversations
Emerging automation
Self-service, virtual agents for
chats, robotic process automation,
intelligent agent desktop interfaces
and voice to text
Deflection of calls to completely
non-human interface, automating
time-consuming tasks to reduce
agents workload
Established automation
IVRs, ACDs and outbound email confirmations
Established older technology
solutions that were implemented
in contact center space long
before other process areas
Low
Current adoption level

EGR-2016-1-R-1823
High
44
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
Impact on CCO
Benefits for buyers
1 Replacement of transactional jobs

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

The text in e-mail and chat channels could be analyzed at the backend and automated reply scripts sent to customers
3 Proactive resolution of customer problems
Automation systems could also predict customers problems and
proactively solve them even before the customers realize them
4 Advanced information security
Processes which involve obtaining confidential customer information
could be automated without manual agent intervention
5 Artificial intelligence as virtual agents
Virtual robots would be able to answer second-level queries that
involve deep probing and background analysis
Source:
Transactional jobs would be replaced

reducing the total cost of ownership
First-level queries would be resolved much

faster reducing average resolution time
Results in customer delight, which

strengthens brand loyalty
Fraudulent activities would be reduced,

which would ensure information security
Improved flexibility/agility to dramatically

increase/reduce the number of agents

EGR-2016-1-R-1823
45
Value-added services (page 1 of 2)

Contracts with renewals/extensions have more value added services
included in the scope than in new contracts
Inclusion of value-added services1 in CCO contracts
Percentage of contracts
Inclusion of value-added services1 in CCO contracts

New contracts
Renewals/extensions
Till 2010
42%
70%
64%
44%
2011-2013
2014-2015
57%
44%
2011-2013
2014-2015
35%
62%
Till 2010
43%
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
Sample size:
Source:
Value-added services include performance management, customer retention, customer analytics, and channel management
EGR-2016-1-R-1823
46
Value-added services (page 2 of 2)

Customer retention and customer analytics have seen maximum growth in
inclusion among value-added services
Inclusion of value-added services within CCO contracts over time
~1.5 X
46%
2008-2011
2012-2013
2014-2015
~2.2 X
49%
48%
~2.2 X
39%
36%
34%
~2.1 X
26%
22%
19%
18%
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:
Source:
1,617 CCO contracts signed between January 2008 and December 2015
EGR-2016-1-R-1823
47
Pricing model (page 1 of 2)

Based on the level of pricing resource unit, there are four basic structures for
6
pricing in CCO
Typical options for pricing resource units
in outsourcing
Typical pricing structures in CCO
Outcome-based pricing
Based on the outcome achieved
by the service providers
contribution (e.g., client
satisfaction and collections
achieved)
Business
outcome
Process
output
Transaction-based pricing
Based on the volume of output
(calls/e-mails) managed.
Additional/Reduced Resource
Charges (ARCs/RRCs) are also
used to account for volume
fluctuations
Process
output
Fixed fee pricing

Fixed fee for a pre-determined
volume of activity with a dead
band. Might include ARCs/RRCs
Process
activity/input
Source:
Process
activity/input
Process
activity/input
Process
activity/input
Input- / FTE-based pricing

Based on the service providers
units of resource input to provide
services (e.g., per executive
deployed, and total call hours
utilized)

EGR-2016-1-R-1823
Directly related to the

business
Business outcome-oriented,
not process-oriented
Aggregation or summary of
process activities
Process groupings encourage
investment by service provider
to increase productivity
Direct correlation to business
drivers
Strongly tied to cost drivers

Direct correlation to how the
process is performed
Limited, if any, meaningful
correlation to business drivers
48
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
83%
2012-2013
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 20142015
The increase in outcome-based pricing will

continue, as buyers are able to measure the
quality of service accurately through sophisticated
KPIs and align the outcome to the pricing
As digital customer care evolves, the focus of

buyers is more on customer experience and,
hence, adoption of outcome-based pricing would
be more relevant for buyers and service providers
31%
20%
13%
6%
FTE-based
Sample size:
Source:
Transaction-based
Outcome-based
557 new CCO contracts signed between January 2012 and December 2015
EGR-2016-1-R-1823
49
Contents

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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50
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 Corps CCO arm by Alorica and multiple acquisitions of smaller companies within
Europe by both Webhelp and Capita

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51
The service provider landscape for CCO includes CCO

specialists, integrated IT+BPO players, and BPO pure-plays
NOT EXHAUSTIVE
CCO specialists
Predominantly focused on contact

center outsourcing
Do not have a significant play in
other BPO/ITO segments
IT+BPO players
Integrated players that provide

services across ITO and BPO
Have a significant ITO portfolio
beyond BPO
EGR-2016-1-R-1823
BPO pure-plays
Have significant presence across

BPO segments (e.g., FAO, PO, and
HRO) beyond CCO
Do not have a significant ITO play
52
The strategic focus for each category of CCO players is

strongly influenced by a different set of competitive dynamics
and legacy capabilities
Player segment
CCO specialists
IT+BPO players
BPO pure-plays
Growth rate
(2014-2015)
Growth strategies employed
Despite big mergers such as that of Alorica and

West Corporation in 2015, the growth of CCO
specialists was subdued, led by de-growth of
Latin American CCO specialists due to currency
woes
Moderate growth in business, driven by

integration and use of their IT capabilities to
offer solutions in areas such as analytics and
robotic process automation
Focus on organic growth, driven by investments

in innovation, customer analytics, and multichannel services
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
Low growth
(<2%)
Moderate growth
(4-6%)
High growth
(5-10%)
Source:

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53
Teleperformance and Convergys lead the overall market with

the largest CCO revenue, followed by several other players
having more than US$1 billion in revenue
2015 CCO service provider revenue1
Revenue in US$ billion
Growth rate
(2014-2015)
Teleperformance
~3.7
Convergys
~3.0
Atento
~2.0
Sitel
CCO
specialists
15-20%
<5%
95-100%
TeleTech
~1.0
EGS
~1.0
1
Note:
Source:
<5%
<5%
Contax
~0.9
<5%
Webhelp
~0.8
10-15%
HPE
Dell
<5%
~0.7
Sutherland
High growth for Alorica on the

back of its acquisition of West
Corps CCO business
Webhelp and Capita posted

strong growth on the back of
acquisitions of smaller firms in
Europe
Sutherland witnessed above

industry growth on the back of
winning new client logos and
renewing existing contracts
<5%
~0.6
~0.5
5-10%
~1.6
Capita
Teleperformance and
Convergys are by far the
biggest CCO service providers,
being the only two providers to
be at or have crossed the US$3
billion mark
<5%
~1.3
~1.2
<5%
Sykes
Xerox
BPO pure-plays
<5%
~1.3
Alorica
~1.1
~0.8
Growth rate
<5%
Concentrix
Transcom
IT+BPO
players
~1.4
XX%
<5%
5-10%
10-15%
Aegis
~0.5
<5%
Firstsource
~0.5
<5%
Includes service providers with revenue over US$500 million

The analysis does not take into consideration the acquisition of EGS by Alorica announced on June 1, 2016
EGR-2016-1-R-1823
54
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
Note:
Source:
EMEA
LATAM
APAC
Based on operational capability assessment of 25+ service providers; annual reports; Everest Group estimates
EGR-2016-1-R-1823
55
The mix of leading providers also changes by industry

segments
Top five CCO service providers based on market share in leading industry segments
Telecom
Note:
Source:
Technology
BFSI
Retail
Healthcare
Based on operational capability assessment of 25+ service providers; annual reports; Everest Group estimates
EGR-2016-1-R-1823
56
Investments (page 1 of 4)
Among the different categories of service provider investments, enabler
technologies accounted for the majority in the last two years
NOT EXHAUSTIVE
CCO-related investments reported in 2014-2015

Number of instances
100% = 117
Others
7%
CRM technology
6%
12%
Scale
Enabler technologies accounted for over half of the

total investments reported by service providers in
2014-2015. Most of these investments were made in
analytics, social media, and multi-channel technologies
Majority of the investments related to CRM and

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

excellence, customer experience labs, and dedicated
hubs for analytics and social media
Communication
technology
28%
47%
Sample size:
Source:
Enabler
technology
150+ investments reported till 2015

EGR-2016-1-R-1823
57
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
Number of instances
Analytics 1
Automation
Multi-channel
1
tools
NOT EXHAUSTIVE
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
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
applications and RPA UNO, an RPA for back-office operation
Intelenets 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
TCS invested in solutions such as Click to Call, Click to Chat, and Web Chat
Alorica invested in multi-channel solution that offers a seamless brand experience across different channels
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
Sample size:
Source:
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

EGR-2016-1-R-1823
58
Investments focus on scale (page 3 of 4)

Majority of scale-related investments are internally supported with a few
large-ticket acquisitions
NOT EXHAUSTIVE
Scale-related investments reported in 2015

Number of instances
Internal
M&A
Sample size:
Source:
M&A
Partnerships
Internal
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
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 Corps 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
HGS acquired Mphasis Groups 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

EGR-2016-1-R-1823
59
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
NOT EXHAUSTIVE
Investments reported in 2015

Number of instances
M&A
CRM
technology 2
Communication
technology
Centers of
Excellence
(CoE) 1 4
/ specialized
hubs
Sample size:
Source:
Partnerships
Internal
EGS invested in social media CRM that builds upon CRM capabilities by leveraging social media channels
Minacs invested in ALT CRM capability which is capable of collecting big data, analyzing it, and automating
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
customer call spikes, and eliminate toll free charges
TCS upgraded its existing Avaya & Aspect platform
EGS partnered with Verint for audio recording platform
Alorica set up Center of Analytical Excellence, which is a dedicated team of graduates and postgraduates that
work as internal consultants for process optimization
EXL invested in executive Innovation Lab in Philippines for positive client showcasing
HGS MENA was set up in 2015 to tap opportunities in the Middle East markets
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

EGR-2016-1-R-1823
60
More detailed analysis of the CCO service provider

landscape including the PEAK Matrix has been published
in CCO Service Provider Landscape Study 2016
Measures success
achieved in the market
Market Success
Leaders
Major Contenders
Aspirants
Delivery capability
CCO service
provider
landscape
CCO service
provider
compendium
Measures ability to deliver services successfully

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

Relative positioning of service providers on the Everest Group PEAK Matrix and analyses along
various assessment dimensions
Service provider trends and key investments made
Detailed profiles of 25+ service providers playing in the CCO space
Four- / five-page profile of each CCO service provider
Each profile provides a comprehensive picture of the providers service suite, scale of operations,
client portfolio, recent developments, delivery locations, and Everest Groups detailed assessment of
its capabilities
EGR-2016-1-R-1823
61
Contents
Appendix

EGR-2016-1-R-1823
62
(page 1 of 2)
Steady market growth as

CCO market transitions
to digital age
The CCO market is expected to grow at ~4% over the next couple of years, as
service providers transition from traditional service delivery to meet client
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
emerging markets
Asia Pacific, Middle East, and Eastern Europe are expected to drive growth in the
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
ownership due to rise in
onshoring
Tincreased demand for onshoring would further increase the total cost of ownership
for buyers. Hence, buyers would look for alternative solutions such as multi-channel
delivery, WAHA model, and automation technologies to reduce cost of operations
and he increase value for their customers
Multi-channel solutions
to be dominant across
new contracts
Multi-channel solutions, especially inclusion of chat and social media, would

continue to increase with more customers preferring to connect with brands through
new-age channels than voice channel

EGR-2016-1-R-1823
63
Automation to replace
transactional work done
from offshore locations
More consolidation
expected in CCO space
(page 2 of 2)
Increased adoption of automation would have an impact on the relevance of

offshore delivery, as processes could be executed onshore at much lower cost than
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
The market will continue to see M&As in the coming years, as service providers
look to maintain market supremacy from share perspective as well as plug gaps in
their capabilities by acquiring other firms

EGR-2016-1-R-1823
64
Contents
Appendix
Publicly-announced contracts in 2015
Glossary of terms
References

EGR-2016-1-R-1823
65
Publicly-announced CCO contracts in 2015
(page 1 of 2)
NOT EXHAUSTIVE
Quarter Buyer
Service
provider
Buyer
industry
Buyer signing
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 citys 311 Customer Service Call Center. The
call center, staffed by approximately 34 agents, handles calls in
English and Spanish placed to the citys 311 non-emergency
phone number
Q4 2015 First Hawaiian

Bank
TSYS
BFSI
TSYS announced that the First Hawaiian Bank signed an

agreement for TSYS to continue its more than 15-year old
relationship
Q4 2015 Florida
Department of
Transportation
Xerox
Government United States
The Florida Department of Transportation (FDOT) has awarded

Xerox a contract for the implementation of a state-of-the-art
customer service system for processing toll transactions across
the state
Q4 2015 Whirlpool
Corporation
Transcom
Retail
Europe
Transcom signed an agreement with Whirlpool Corporation to

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
Kingdom
Bellrock was awarded a new maintenance management

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
United States

EGR-2016-1-R-1823
66
Publicly-announced CCO contracts in 2015
(page 2 of 2)
NOT EXHAUSTIVE
Buyer
industry
Buyer signing
region
Brief description
Q2 2015 Dixons Carphone DHL
Retail
United
Kingdom
DHL was awarded a 78 million, three-year contract with

Dixons Carphone to manage its UK national distribution to
stores and customer service centers
Q2 2015 Centers for

Disease Control
and Prevention
General
Dynamics
Healthcare
United States
General Dynamics will provide contact center support for health

departments, healthcare providers, and more than 3,300 users
of the Centers for Disease Control and Preventions Vaccine
Tracking System (VTrckS), a secure web-based system
Q2 2015 Australian
Taxation Office
(ATO)
Optus
Government Australia
Optus extended its managed services contract with the ATO

until June 20, 2018. Under the extension, Optus will continue to
deliver all voice and data communications (mobile and fixed),
contact center, and videoconferencing services
Q1 2015 National Careers

Service
Serco
Government United
Kingdom
Serco secured a new three-year contract for delivering contact

center services for the National Careers Service
Q1 2015 Nextel
Communications
AlmavivA do Telecom
Brasil
Brazil
AlmavivA do Brasil , a subsidiary of AlmavivA, signed a Euro

100 million euro contract with Nextel for the management of call
center, back-office, collection, and retention.
Q1 2015 Reliance
Communications
Vertex
India
Reliance Communications awarded a nearly Rs750-crore deal

to the Indian unit of UK-based Vertex to outsource its call center
and shared services operations
Quarter Buyer
Service
provider
Telecom

EGR-2016-1-R-1823
67
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 buyers perspective, dead bands are used to create predictability of charges; from a
service providers 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 providers 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 managementrelated processes or functions
FTEs
Full-Time Employees on the rolls of the company

EGR-2016-1-R-1823
68
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 managementrelated 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)

EGR-2016-1-R-1823
69
Published
Topic
Current
Release date
CCO Pricing Trends: The Realities of Outcome-Based Pricing Adoption

Clever Machines at Your Service
January 2016
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 Buyers 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
EGR-2016-1-R-1823
70
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 providers 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:
Skand Bhargava, Practice Director:
Jayapriya K, Senior Analyst:
Sharang Sharma, Analyst:
CCO Team:
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
Website: www.everestgrp.com | Phone: +1-214-451-3000 | Email: [email protected]

EGR-2016-1-R-1823
71
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, problemsolving skills, and original research. Details and in-depth content are available at
www.everestgrp.com and research.everestgrp.com.
Dallas (Headquarters)
[email protected]
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Stay connected
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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.

Our research offerings for global services

Custom research capabilities

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Locations | Cost, skills, sustainability,

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How to read this document

Where/how to locate the information

Key facts or analyses

The section on key messages summarizes the CCO market insights

A section is devoted to each dimension of the summary of key messages (listed

Outlook for 2016-2017

Acronyms or technical outsourcing terms are defined in the glossary of terms

Copyright 2016, Everest Global, Inc.

Introduction and overview

Summary of key messages

Section I: Market size and buyer adoption

Section II: Value proposition and solution characteristics

Copyright 2016, Everest Global, Inc.

Section II: Value proposition and solution characteristics (continued)

Section III: Service provider landscape

Outlook for 2016-2017

Introduction and overview

Summary of key messages

Market size and buyer adoption

Service provider landscape

Outlook for 2016-2017

Copyright 2016, Everest Global, Inc.

Our research methodology is based on four pillars of strength

Robust definitions and

Market thought leadership

Diverse set of market

Total Value Equation

Proprietary & Confidential. 2011, Everest Global, Inc.

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

Everest Groups CCO research is based on multiple sources of

Proprietary database of 2,500+ CCO contracts (updated annually)

Service providers covered in the analysis

Proprietary database of operational capability of 25+ CCO service

Everest Groups CCO research is based on multiple sources of

Copyright 2016, Everest Global, Inc.

Everest Groups definition of the CCO market is centered on

Traditional CCO, primarily

Everest Group (2016)

We break each element into subprocesses of the customer

Order fulfillment and

Copyright 2016, Everest Global, Inc.

Performance management &

Introduction and overview

Summary of key messages

Market size and buyer adoption