1. Tietgen Consultancy Inc.
Stefan
Creating New Markets
Thomas Bo Joergensen
Mikkel M. Krogsgaard
Jonas H. Levring
Stefan K. Madsen
Tietgen Consultancy Inc.
A Legacy of Growth

2. The vCustomer winning formula
“Where do we expand? And how does the geography interact with our choices about what services to provide and what verticals to serve?”
Sanjay Kumar

3. The vCustomer winning formula
Bulgaria will be your launch pad for becoming the market leader of BPO within travel, hospitality, & retailing in Europe.

4. The situation today Industry Information Technology Enabled Services
BPO
(Business Process Management)
CRM
(Customer Relations Management)
Type of business
Share of revenue
15 %
85 %
- Data management
- Data Mining
- Data processing
- Data Validation
- Data Entry
- Content Digitalization
- Customer Care Solution
- Contact Center Consulting
- Technology Help disk
- Integrated CRM Solution
- Knowledge Solutions
Stefan
Services
Where to go
What to offer
How to do it
Tomorrow

5. You are serving four industries
Technology
Retailing
Telecom
Travels &
Hospitality
Where to go
What to offer
How to do it
Tomorrow

6. Finding low cost and stable environment
Where to go
What to offer
How to do it
Tomorrow

7. Sorting by education and labor regulation
Where to go
What to offer
How to do it
Tomorrow

8. World Global Competatitiveness Report 05-06
Over 40 indicators!
Doing Business 2006
Ease of Doing Business Rank, Starting a Business: Rank, Procedures (number), Time (days), Cost (% of income per capita), Min. capital (% of income per capita), Employing Workers: Rank, Difficulty of Hiring Index, Rigidity of Hours Index, Difficulty of Firing Index, Rigidity of Employment Index, Nonwage labor cost (% of salary), Firing costs (weeks of wages), Paying Taxes: Rank, Payments (number), Time (hours), Profit tax (%), Labor tax and contributions (%), Other taxes (%), Total tax rate (% profit), Enforcing Contracts: Rank, Procedures (number), Time (days), Cost (% of debt), Economy Characteristics: GNI per capita (US$), Informal economy estimate (% GNP), Population.
World Global Competatitiveness Report 05-06
Macroeconomics: Total GDP 2004 (bUSD), Recession expectations, Business Cost of Terrorism, Impact of Rules on FDI, Goverment Surplus/ defecit 2004, Inflation 2004,Technology: Firm-level Tech Readiness, Quality of Competition in the ISP Sector that insure quality, Extent of Business Internet Use HR: Quality of Educational System, Quality of Math and Science Education, Ease of Hiring Foreign Labour, Life Expectancy, Infrastructure: Overall infrastructure, Phone infrastructure, Government: Judicial independence, Efficiency of Legal Framework, Reliability of police services, Business Cost of Crime and Violence, Business Cost of Corruption, Foreign Ownership Restrictions, Restrictive Labour Regulations
Stefan
Where to go
What to offer
How to do it
Tomorrow

9. From twenty to five
Where to go
What to offer
How to do it
Tomorrow

10. Top five countries
Where to go
What to offer
How to do it
Tomorrow

11. Mexico $89 L LVL South Africa $750 MH MH Slovakia $763 M MH
Top five countries
Avg. monthly wage
Cost of living
Quality of living
Mexico
$89 L
LVL
South Africa
$750
MH
MH
Slovakia
$763 M
MH
Hungary
$500 M
MH
Bulgaria
$239 L
MH
Avg. monthly wage in US dollars
Cost of living: Low, Medium, High
Quality of living: Very Low, Low, Medium, High
Source: Mercer among others
Where to go
What to offer
How to do it
Tomorrow

12. Finding your client market
Billion $
Where to go
What to offer
How to do it
Tomorrow

13. Finding your client market
Billion $
Total European market value:
$ 76 billions
Where to go
What to offer
How to do it
Tomorrow

14. Covering the languages
Total: ~321 mill
Italian
~58 mill
English
~64 mill
Spanish
~41 mill
German
~98 mill
French
~60.5 mill
Where to go
What to offer
How to do it
Tomorrow

15. What can Tietgen Consultancy offer?
Tietgen Consultancy will assist you in:
Entering Bulgaria
Developing product portfolio for BPO automation for the new European markets
Where to go
What to offer
How to do it
Tomorrow

16. How to develop product portfolio
Analyze market to fit customer needs in automation
Define additional services for vertical automation
Create PDRs for cheap programming in India
Where to go
What to offer
How to do it
Tomorrow

17. Bulgaria can be entered by: Acquiring partner
Entering Bulgaria
Bulgaria can be entered by:
Acquiring partner
Setting up a Bulgarian BPO-joint venture by exploiting existing partnership
Where to go
What to offer
How to do it
Tomorrow

18. Joint venture with existing partner
Your choice
Go with
Tietgen
Go to
Bulgaria
First thing Monday morning:
We will perform a due diligence to decide between the two options
Acquisition
Joint venture
Our immediate recommendation
Joint venture with existing partner
= choice
Where to go
What to offer
How to do it
Tomorrow

19. Financial assumptions
CRM revenues: Low growth 5–6%
BPO revenues: High Growth 20-30%
Productivity: Parameter adm expenses/revenues
CRM adm exp/rev: Will fall with 2-3% points
BPO adm exp/rev: Will fall with 4-6% points
Where to go
What to offer
How to do it
Tomorrow

20. Financial effects Best case: 16.24% Likely case: 12.90% 8.96%
Worst case: 8.60%
Where to go
What to offer
How to do it
Tomorrow

21. Key Performance Indicators
Establish joint venture K1
Ensure high quality K2
Research in new markets and opportunities K3
Increase brand awareness K4
Reaching market goal in European BPO K5
Jonas
Where to go
What to offer
How to do it
Tomorrow

22. Key Performance Indicators - Timeline
When to measure
High K1 K2 K2 K2 K2 K2
Emphasis K5 K3 K4
Jonas
Low
Mid/2007
End/2007
Mid/2008
End/2008
Mid/2009
End/2009
Where to go
What to offer
How to do it
Tomorrow

23. Note: Macro-risk is compared to the 3rd sorting of countries
Acquire
Joint venture
Government 3 HR 2
Infrastructure
Specifics 4
Technology 5
Avg. risk
3.2
Go with
Tietgen
Go to
Bulgaria
Risk with
Tietgen = 0
Acquire
Joint venture
Note: Macro-risk is compared to the 3rd sorting of countries
Total risk
Acquisition (?+3.2) = ?
Joint venture (2+3) = 5
Cost + ? 2
Control - 4
Compliance 5
Possible
Supplier dependence 1
Total risk =
1 = low, 5 = high
= choice
Where to go
What to offer
How to do it
Tomorrow

24. The vCustomer winning formula
Bulgaria will be your launch pad for becoming the market leader of BPO within travel, hospitality, & retailing in Europe.

25. Q&A Q&A Where What How Situation Offer Finance Countries
Develop portfolio
KPI
Markets
Entering Bulgaria
Risk
Alle
Miscellaneous

26. Q&A Q&A – Situation Where What How Presentation Backup Situation Offer
Finance
Countries
Develop portfolio
KPI
Markets
Entering Bulgaria
Risk
Alle
Presentation
Backup
Miscellaneous
Services today
Competitors
New industries

27. Q&A Q&A – Countries Where What How Presentation Backup Situation Offer
Finance
Countries
Develop portfolio
KPI
Markets
Entering Bulgaria
Risk
Alle
Presentation
Backup
Miscellaneous
Over 40
Not China
Top five

28. Q&A Q&A – Markets Where What How Presentation Backup Situation Offer
Finance
Countries
Develop portfolio
KPI
Markets
Entering Bulgaria
Risk
Alle
Presentation
Backup
Miscellaneous
Client market
Client market detail
Languages
Competitors
BPO definition

29. Q&A Q&A – Offer Where What How Presentation Backup Situation Offer
Finance
Countries
Develop portfolio
KPI
Markets
Entering Bulgaria
Risk
Alle
Presentation
Backup
Miscellaneous
What can TC
Tietgen

30. Q&A – Develop portfolio
Where
What
How
Situation
Offer
Finance
Countries
Develop portfolio
KPI
Markets
Entering Bulgaria
Risk
Alle
Presentation
Backup
Miscellaneous
Develop
Tietgen
Horz vs. Vert

31. Q&A – Entering Bulgaria
Where
What
How
Situation
Offer
Finance
Countries
Develop portfolio
KPI
Markets
Entering Bulgaria
Risk
Alle
Presentation
Backup
Miscellaneous
Options
Pros vs. Cons
Choice
Not China
Bulgarian partner

32. Q&A Q&A – Finance Where What How Presentation Backup Situation Offer
Countries
Develop portfolio
KPI
Markets
Entering Bulgaria
Risk
Alle
Presentation
Backup
Miscellaneous
Assumptions
Assumptions in detail
Effects

33. Q&A Q&A – KPI Where What How Presentation Backup Situation Offer
Finance
Countries
Develop portfolio
KPI
Markets
Entering Bulgaria
Risk
Alle
Presentation
Backup
Miscellaneous
List
KPI detail
Timeline

34. Q&A Q&A – Risk Where What How Presentation Backup Situation Offer
Finance
Countries
Develop portfolio
KPI
Markets
Entering Bulgaria
Risk
Alle
Presentation
Backup
Miscellaneous
Risk

35. Q&A Q&A – Miscellaneous Where What How Backup Situation Offer Finance
Countries
Develop portfolio
KPI
Markets
Entering Bulgaria
Risk
Alle
Backup
Miscellaneous
Human factor
Marketing
Service

36. Key Performance Indicators
KPI no.
KPI Title
KPI Target
Baseline
When to be measured
How to measure
Responsible
KPIs related to major business objectivese K1
Establish joint venture
Successful establishment
Q2/ 2007
Q4/2007
No measurement
Executive management K2
Ensuring high quality within the services offered to clients and within the partners workforce
One quality supervisor for every 16 agents
Continuously
Conduct random quality checks on employees
Middle management K3
Research in new market opportunities and potential clients within the European market
Contracts within $200  $1,000 mill/month
Q1/2008
Financial control etc.
Executive management and Tiegent Consultancy K4
Increase brand awareness in the European market within the Healthcare, Travel & Hospitality and retailing industries
N/A
Q3/2008
Marked surveys
London sales office K5
Reaching market goal in European BPO
72 USD
Q3/ 2008
2010
Measure on revenue for the BPO in the Healthcare, Retailing and Treavel & Hospitality Division. The marketing team, should also conduct marketing surveys
Marketing team

37. Assumptions in Detail Growth
CRM: The market has been fairly exploited and growth has slowed: Hence Low growth 5 – 6% (Bulgaria inflation 4,1%)
BPO:The Offshoring market is expected to grow at %. As CRM growth is assumed insignificant it is especially BPO- offshoring that will grow at this rate. Futhermore we plan to enter the European market where customers pay a premium: Hence High Growth 20-30%
Productivity
For productivity we use Adm. expenses/revenues as a parameter. Adm. expenses are considered mostly reliant on labour costs
The initial ratios (2007) are estimated using peers within CRM and BPO. By moving to low wage country Bulgaria we expect the productivity to rise and hence the parameter to decline:
In CRM: Will fall with 2-3% points.
In BPO: Will fall with 4-6% points. This decline is catalysed as more and more labour/total labour is moved to Bulgaria. The decline will also rely on the degree of BPO-automation.
This will eventually stagnate -> European union will most probably align wages over time as the country matures.

38. Competitors - % of firms by region

39. Competitors – Revenue group vs. offshore firms
100 MM -
Group2 MM
Group3 MM
Group4
1 B +
Group5
1-5B
Group6
5 B+

40. Competitors – East EU offshore firm distribution

41. Pros Vs Cons Bulgaria pros and cons Good government economy
Few irregular payments in tax collections
Medium tax
Good technology infrastructure and penetration
Easy hiring and firing practises
High and available human capital at low cost
Regression expected -> will maintain sufficient work pool.
Easy to start a business
Partnership established
High real effective exchange rate and undeveloped financial market.
Inflation
Credit rating
Organized crime
Complex tax system
Little reliance on pro management
Little tradition for authority delegation
EU entry will raise wages
Negative impact of rules on FDI

42. 3 reasons not to go to China
Lots and lots of red-tape and government intervention.
Poor ICT-infrastructure.
Most importantly:
You believe the cultural differences to differ too much from you.

43. Finding your clients market
Europe:
- Austria
- France
Germany
- Ireland
- Italy
- Spain
Switzerland
United Kingdom
International
Argentina
- Australia
Canada
India
Mexico
New Zealand
South Africa
USA
Venezuela
Regions
Factors
Million $ 34,246.16
Million $ 14,467.54
Million $ 41,867.11
Million $ 19,637.00
Million $ 76,113.27
Million $ 34,104.86
English, French, German, Spanish, Italian
English, French, Spanish
Retailing
Travel & Hospitality
Total consumption
Languages
Source: Euromonitor

44. Back Office / Analytics
Retailing
Customer Service
Sales/ Telemarketing
Back Office / Analytics
Customer queries (BPO)
Product info details (BPO) Fault management (BPO) Billing queries (BPO)
Change management Warranty returns (BPO)
Third party verification
Order processing (BPO)
Order management (BPO) Presales (CRM)
Cross-sell / up-sell Telesales for extended warranty (CRM) Telemarketing of co-branded credit cards (CRM)
Customer feedback management Data entry/ processing Forms and rebate processing Inventory planning Demand forecasting Credit card management Inventory management Industry analysis Marketing analysis
BPO
CRM

45. Technology Technology Support Account activation
Technical troubleshooting/networking support (L1, L2, L3) IT products (desktops, PCs, laptops, PDAs, displays, printers, input/ output cards, routers, hubs, switches, hot spots & storage devices) IT infrastructure (server monitoring, worldwide networks management, server maintenance support for Linux-based , web, proxy, firewall , VPN, database, LDAP, customized applications) Applications maintenance & support (ERP & CRM software) Contact center solutions for process value additions in the areas of IVR, CRM/CTI focused application development & web enablement
Order fulfillment Cross selling/up selling Data entry and transaction processing Billing support, inquiries and collections Other support domains
BPO
CRM

46. Operational Support Systems Business Support Systems
Telecom
Operational Support Systems
Product and Sales
Business Support Systems
Activation /Ordering CRM software services - Client /manager CSR monitoring - CSR ID, and performance tracker - CSR desktop call handling software - CSR Recorder and DB search Tech Product Support and troubleshooting - Mobile platforms - Networking devices - Storage Consulting Services - Computer Telephony Integration Helpdesk - Productivity Apps Escalation Resolution
Network Service Management Research and targeting Cross-sell / Up-sell Follow-up verification
Consulting Services - Regulatory support services - Product management support services - Project management support services
CRM CSR Training Account Maintenance Warranty/Replacement Programs Rebate Processing Business Analytics

47. Transaction Processing
Travel & Hospitality
Customer Support
Passenger Operations
Transaction Processing
Information calls Address changes Loyalty programs Up Sell/ Cross Sell Schedule changes Promotions/discounts Collections Grievance handling
Reservation processing Fares/Rates Seat allocation Revenue management Deal rate filing Onward booking Departure control
Loyalty program management Baggage tracking/ Handling Forms processing Fare refunds Procurement

48. Tietgen – A Legacy of Growth
Analysis
Based on quantitative and qualitative methods with a high focus on thought through and practical implications centered around Value-driven profitability.
Delivery
Written report and/ or presentation.
Price policy
Project driven.
Recent clients
Biosonic, Aldi, Brightcove.com.

49. Why you should go verticalVs
Horizontal
Long term
Higher service offerings
Stronger negating position and customer loyalty
Unique market position
Short term
Lower service offerings
Weaker, but faster negation
Wide market proposition

50. V as in virtual = transferable and measurable, yet still indispensable
The Human Factor?
”Most clients are trying to eliminate the human factor altogether” – S. Kumar.
V as in virtual = transferable and measurable, yet still indispensable
The back office worker is a cost – The knowledge worker is an asset => All firms are trying to eliminate cost and increase assets.

51. Good location, low cost (centralized marketing structure)
The London office will be the platform for all marketing coordination in Europe
Why:
Good location, low cost (centralized marketing structure)
Obstacles:
The sales department is required to speak all the languages in the offered to the European market

52. The meaning of the word ”service”
>>…let’s focus on improvement services rather than just services<<
Sanjay Kumar
Improving the service to vCustomer clients
Improving the service within the organisation
vCustomers organisation

53. Call Center Bulgaria(callcenterbulgaria.com) Established 2003 in Sofia
Bulgarian Partner
Call Center Bulgaria(callcenterbulgaria.com)
Established 2003 in Sofia
”Operating in German, English, French and Bulgarian with possibilities for other languages”
”..view to develop the main services of a modern contact center: inbound and outbound services for European, East European and domestic (Bulgaria) clients delivered from a multi-language low cost platform in South-Eastern Europe.”