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NelsonHall CMS Insight: December 2009

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Dear #FIRSTNAME

Latest News and Developments

  • IBM Launches Voice of the Customer Analytics Service

    Dec 16, 2009 | New Offerings by John Willmott

    IBM has launched a subscription-based analytics offering called IBM Voice of the Customer Analytics (VOCA).

    The service mines diverse data sources from routine customer service interactions - including audio recordings, call transcripts, emails, survey results and demographic data - to deliver an integrated view of customer sentiment aimed at improving marketing effectiveness, enhancing customer service and growing customer loyalty.

    Analyst comments:

    Voice of the customer analytics services are increasing in importance as organizations seek to improve their leverage from their existing client bases. In addition to IBM, transcosmos has launched a major initaitive of this type in Q4 2009 (see article 67372).

  • Sutherland Global Services Award Contract for Technical Support Services by Virgin Group

    Dec 16, 2009 | Contracts by John Willmott
    industry: Hi-Tech & Electronics

    Sutherland Global Services has been awarded a contract for technical support services by the Virgin Group.

    Sutherland Global Services will provide a technology platform and technical support for the Virgin Group in support of the Virgin Group's Virgin Digital Help service.

    This new service aims to provide around the clock, around the world assistance and support for a variety of digital devices.

    Analyst comments:

    While the provision of technical support services to their clients on behalf of high-tech manufacturers is relatively commonplace, this contract is relatively unique in two respects.

    Firstly, Sutherland Global Services is essentially providing a white-label service to enable Virgin to establish a new "technical support" business. Secondly, this business is largely based on a platform supplied by Sutherland rather than the more usual approach of interfacing with existing client systems.

  • Teleperformance Announces Plan for Business Turnaround in 2010

    Nov 26, 2009 | Financial Results by John Willmott

    Teleperformance has announced a revenue target for 2009in the range of €1,820m to €1,830m, an increase of 2.0% to 2.6%, and a maximum of minus 1.3% organic in constant currency.

    Teleperformance's expected 2009 revenues (and revenue growth) by principal geography are:

    • EMEA €916m (-6.3%) (-4.4% organic in CC)
    • NAFTA €778m (+10.1%) (-3.7% organic in CC)
    • ROW €136.0m (+34.6%) (+47.5% organic in CC).

    Teleperformance's 2009 profit margin is expected to be particularly poor in Europe at 1.6% (compared to 16% in NAFTA) compounded by a disastrous performance in its French operations. Consequently the financial priority for 2010 is to improve profitability in Europe and return the operations in France to break-even by Q4 2010 or Q1 2011. Teleperformance's French operations suffered major losses in 2009 resulting from an 18% decrease in revenues to an anticipated €240m. A 5% decrease in pricing in France over the past two years coupled with an increase in wages has had some impact, but essentially Teleperformance has become increasingly uncompetitive in France faced with an increasing demand for offshore services. Accordingly Teleperformance is taking the following actions in Europe to address the complacency that has arisen there:

    • Increasing focus on "management by walking around" to get a consolidated management team back in-touch with the business
    • Introduction of unified quality processes and the "TP Platinum" program, which is essentially a drive to reconnect both with the company's agents and its clients
    • Consolidation of business development teams across Europe.

    Teleperformance is expecting organic growth between 0% and 3% during 2010.

    Analyst comments:

    Teleperformance had become slightly complacent in managing the basics of its contact center outsourcing business and as a result of the recession is now faced with restoring some fundamental practices to its operations as a matter of urgency.

    In particular, Teleperformance faces the challenge of turning around its European operations in 2010 and needs to reinvigorate its HR management of its agents and its opeerational practices both in Europe and elsewhere.

    In addition, Teleperformance's strategy for 2010 includes:

    • Increasing its offshore (Philippines) and nearshore (Latin America) capability for the U.S. market
    • Hastening the deployment of processes and tools across its subsidiaries
    • Developing an integrated approach focusing on the major English and Spanish-speaking markets
    • Entering the non-voice BPO market.

  • Vertex Awarded 3-Year CMS contract by Severn Trent

    Nov 26, 2009 | Contracts by Rachael Stormonth
    industry: Utilities

    Vertex has been awarded a 3-year contract by U.K. water utility Severn Trent to provide back office correspondence support.

    The service, which goes live in December following a ramp up period, will be delivered from Vertex's offices in Gurgaon, India.

    Analyst comments:

    This is exactly the kind of non-voice customer care support activity that an be offshored. Vertex's strong capabilities in the utilities sector means it is used to the appropriate processing for different types of customer correspondence.

  • Convergys Aims to Hire Further 4,500 Personnel in Philippines by end February 2010

    Nov 17, 2009 | New Offerings by John Willmott

    Convergys has announced that it intends to hire approximately 4,500 more agents within its twelve contact center facilities in the Philippines by end February 2010.

    This would bring the number of contact center personnel employed by Convergys in the Philippines to 22,500.

    Analyst comments:

    While the delivery of customer management services delivery is becoming increasingly global with new locations being announced on a regular basis and Central and Latin America steadily increasing in importance for service delivery to the North American market, the Philippines remains the center of gravity for the delivery of low-cost customer care to the U.S. market.

    Indeed the demand for services delivered from the Philippines has increased in the past year. While the recession has increased the necessity to offer customer management services from U.S. locations, the net impact has been to increase the level of offshoring, with the Philippines being a major beneficiary of this trend.

  • Stream Global Services Announces Q3 2009 Revenues Down 2.1% to $121.9m

    Nov 05, 2009 | Financial Results by John Willmott

    Stream Global Services has announced Q3 2009 pro forma revenues, for the period ending 30 September 2009, of $121.9m, a decrease of 2.1% compared to Q3 2008.

    Q3 2009 revenues by geography were:

    • Americas $72.1m
    • EMEA $49.7m.

    Fifty-two per cent of revenues in Q3 2009 were derived from three clients: Dell, HP, and Sirius/XM.

    Revenues for the first nine months of 2009 decreased 2.6% to $383.2m. Revenues for the first nine months of 2009 by geography were:

    • Americas $227.7m
    • EMEA $155.5m.

    Analyst comments:

    Stream Global Services continues to be impacted by the migration of service delivery from onshore and nearshore to offshore locations. In Q3 2009, Stream's revenues for delivery from the U.S. and Canada decreased by 15.2% as service delivery from these locations migrated to the Philippines and El Salvador. Similarly revenues for services performed in European service centers decreased 19.8% due to the impact of reduced client volumes, exchange rates , and offshore service migration.

    Overall, Stream experienced a significant service migration from onshore to offshore delivery during Q3 2009, with revenues from services delivered offshore growing 80.7% year-on-year, and offshore service delivery now accounting for 28.9% of Q3 2009 revenues.

  • TeleTech Announces Q3 2009 Revenues Down 19.4% to $281.5m

    Oct 28, 2009 | Financial Results by John Willmott

    TeleTech has announced Q3 2009 revenues, for the period ending September 30, 2009, of $281.5m, down 19.4% (16.0% in constant currency) year-over-year.

    Q3 2009 revenues (and revenue growth) by business unit were:

    • North America $215.9m (-12.2)
    • International $65.6m (-36.4%).

    Revenue for the first nine months of 2009 was down 17.4% (down 10.5% CC) to $887.1m. First nine months revenues (and revenue growth) by business unit were:

    • North America $674.8m (-13.1%)
    • International $212.2m (-28.6%).

    TeleTech attributes the revenue decline to reduced client volumes and increased migration of work to offshore locations. Revenue from offshore locations reached $140.7m in Q3 2009 and $425.8m in the first nine months of 2009.

    TeleTech expects signings to increase markedly in Q4 2009. TeleTech signed $55m in annualized revenues in Q3 2009 and has already signed $80m in annualized revenues in Q4 2009.

    Analyst comments:

    The recession has had a major impact on the customer management services industry forcing a more rapid optimization of delivery locations, typically a net increase in offshore service usage, combined with a need to provide enhanced impact on customer retention and revenue generation.

    TeleTech has been slower than many of its competitors to add to these changes but now has 50% of delivery from offshore and is beginning to see contracts including its new revenue generation and on-demand offerings.

  • West Corporation Announces Q3 2009 Revenues Down 6.6% to $559.0m

    Oct 21, 2009 | Financial Results by John Willmott

    West Corporation has announced Q3 2009 revenues, for the period ending 30 September 2009, of $559.0m, a decrease of 6.6% compared to Q3 2008.

    Organic revenues for Q3 2009 decreased by 11.1% to $537.9m.

    Q3 2009 revenues (and revenue growth) by segment were:

    • Communications services $282.0m (-12.9%)
    • Unified communications $278.3m (+0.8%).

    Revenues for the first nine months of 2009 increased 5.8% to $1,772.9m. First nine months revenues (and revenue growth) by segment were:

    • Communications services $845.4m (+16.1%)
    • Unified communications $931.6m (-2.1%).

    Analyst comments:

    West has completed the reorganization of its business. The company's receivables management business was merged with its communications services business in July 2009 and company's alerts and notifications services have now been moved to the unified communications business.

    The rationale for integrating the receivables management business with the customer management services business makes sense, given the high client and process overlap between these services and West intends to enhance its cross-selling of these services. At present, half of West's top 20 receivables management client are also customer management services clients. Overall 46.9% of West's revenues are derived from clients that take two or more services.

    West has in effect exited the "purchased paper" business during 2009, purchasing debt of just $1.7m in total during 2009. In Q3 2009, the company also took a $25.5m impairment charge on its receivables management related to iits "purchased paper" business.

Welcome to CMS Insight

Welcome to the latest "CMS Insight" article from NelsonHall.

CMS Insight complements the market analyses and vendor assessments within NelsonHall's Customer Management Services program by providing commentary and insight on key CRM BPO industry developments which impact your sourcing decisions.

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