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NelsonHall CMS Insight: November 2011

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Dear #FIRSTNAME

Targeting Outsourced Social Media Services

NelsonHall's "Targeting Outsourced Social Media Services" market analysis identifies the use of monitoring and engagement services around social media services in support of sales, marketing, and customer care.

The report contents include:

  • Changing shape of outsourced social media services
  • Customer requirements & market drivers
  • Market size & growth
  • Vendor market shares
  • Vendor offerings and targeting
  • Challenges & success factors
  • Positioning of vendors against success factors.

NelsonHall's "Targeting Outsourced Social Media Services" market analysis consists of 79 report/presentation slides.

For further details, contact Rob Hughes

Latest News and Developments

  • Alpine Access Announces Q3 Revenues Up 75% to $28m

    Nov 16, 2011 | Financial Results by Thomas Whittle

    Alpine Access, the U.S. based pureplay work at home customer management services provider, has announced Q3 2011 revenues for the period ended September 30, 2011 of ~$28m, up 75% year-over-year.

    Analyst comments:

    Growth was driven by a contract with Canada's largest telecoms company and ensuing expansion into the geography, as well as volume growth with a number of U.S. telecoms, high-tech and financial service clients, which constitute 85% of the company's revenue base.

    Alpine signed two new logos in the quarter; a U.S. based healthcare client, and a global financial services organization. Alpine has been able to maintain a strong yet geographically diverse workforce through the use of its cloud-based talent management platform.

    More information on Alpine Access's delivery capabilities and performance are provided in a NelsonHall profile, to be published imminently.

  • Hinduja Global Solutions Announces Q2 FY 2012 Revenues Up 34.5% to $71.6m

    Nov 12, 2011 | Financial Results by Thomas Whittle

    Hinduja Global Solutions (HGS) has announced fiscal Q2 2012 revenues, for the period ending September 30 2011, of Rs 2,660.7m ($71.6m), up 34.5% year-on-year.

    EBITDA margin was 14.4%

    The company added 10 new clients during the quarter.

    .

    Analyst comments:

    Growth has primarily been fuelled by the acquisitions in August ths year of:

    • OLS, the Canadian CMS services provider, bringing in 2,000 employyes based in 10 sites in Canada
    • HCCA, the Indian HR services provider, bringing in 500 personnel in India.

    HGS has invested in both geographic and service diversification, entering the North American market with OLS and gaining access to major brands such as Apple. This is aimed at strengthening the competitiveness of the HGS global brand, which up to now, has seen all organic growth driven from Indian domestic telecom and high-tech demand.

  • Firstsource Announces Q2 2012 Revenues Up 5.8% to Rs 5,330

    Nov 10, 2011 | Financial Results by Thomas Whittle

    Firstsource has announced fiscal Q2 2012 revenues, for the period ending September 30, 2011, of Rs. 5,330, up 5.8% year-over-year.

    FY Q2 operating margin was 4.4%, a 540bps decrease from 9.8% achieved in the prior year quarter.

    Estimated fiscal Q2 2012 revenue (and y-o-y revenue growth) by industry sector is:

    • BFSI $31.2m (+38.7%)
    • Telecom & Media $36.6m (-5.2%)
    • Healthcare $34.5m (-3.6%)
    • Other $1.0m (-33.3%)

    Estimated fiscal Q2 2012 revenue (and revenue growth by client geography is:

    • North America $53.9m (-6.7%)
    • U.K. $33.4m (+18.0%)
    • India $14.7m (+17.7%)
    • Rest of World $2.2m (+100%)

    Revenue (and growth ) by delivery location is:

    • Offshore $24.5m (+4.3%)
    • Domestic $15.1m (+4.1%)
    • Onshore $64.5m (+4.0%)

    Analyst comments:

    Firstsource is still experiencing extremely high levels of attrition in its domestic delivery centers of India and Sri Lanka, averaging 74.7% for the quarter. In addition, onshore attrition of U.S. and U.K. operations has increased from 32.7% in the previous quarter, to 40.0%.

    Growth is primarily being driven by domestic expansion in India, as well as growth in the U.K., with banking and telecoms being the main verticals. Growth in the telecoms vertical was offset by reductions in North American volumes. Moving forward, quarter on quarter growth in the BFSI segment is unlikely due to softness in demand for mortgages in the U.K., as well as retraction in house of some Firstsource contracts for collections.

    Moving forward, Firstsource is likely to close at least one major telecoms deal for offshore delivery, either in India or the Philippines over the next quarter in a three year contract.

  • Transcosmos Announces Fiscal Q2 2012 Revenues Up 9.7% to Yen 40,846m

    Nov 09, 2011 | Financial Results by Thomas Whittle

    Transcosmos has announced fiscal Q2 2012 revenues up 9.7% year-over-year for the period ending September 30 2011, to Yen 40,846m (~$530m).

    Operating income was Yen 2,272m (~$29m), a margin of 5.6%, up 200 bps from the prior year quarter.

    Analyst comments:

    Transcosmos has emerged as one of the leading CMS vendors in the Asian market, using a strong marketing foundation in addition to well positioned expansion in Korea and China to serve growing customer bases, gaining significant multi-channel CMS contracts across voice, web and social-media.

    The company is currently looking for partner companies with which to penetrate the European CMS market.

  • Sykes Enterprises Announces Q3 2011 Revenues Up 2.7% to $302.5m

    Nov 08, 2011 | Financial Results by Thomas Whittle

    Sykes has announced Q3 2011 revenues, for the period ending September 30 2011, of $302.5m, up 2.7% year-over-year, but down 0.6% in constant currency.

    Q3 2011 operating margin was 7.1%, up 260bps from the margin of 4.5% achieved in the prior year quarter.

    Q3 2011 revenues (and revenue growth) by region were:

    • Americas: $241.5m (+0.1%, -2.1% in CC)
    • EMEA: $61.0 m (+14.9%, +6.5% in CC).

    Estimated Q3 2011 revenue (and revenue growth) by industry sector were:

    • Communications $96.8m (-0.4%)
    • Financial Services $84.7m (+10.3%)
    • Technology/consumer $57.5m (-2.4%)
    • Transportation/leisure $21.2m (+3.0%)
    • Healthcare $18.2m (+3.0%)
    • Other $24.2m (+3.0%).

    The Americas region (which includes South Asia and the Pacific) is down by 2.5% sequentially. This region now represents 79.8% of revenues, as opposed to 82.0% of revenues in the prior year quarter. This is due to lower demand in the healthcare and communications verticals. The region had an operating margin of 12.8%, up 230bps from a margin of 10.5% achieved in the prior year quarter.

    The EMEA region's operating margin was 2.2%, up 640bps from a negative margin of 4.8% achieved in the prior year quarter, a large improvement from a year ago when overcapacity in the region was rife.

    Sykes predicts revenues in the range of $1,208m to $1,213m for full year 2011.

    Analyst comments:

    Sykes will continue to see growth in the financial services vertical, sporadic growth in the communications vertical, and stagnation in the technology vertical with a number of current clients not renewing programs during Q4. Sykes anticipates an uptick in employee costs due to non-continuation of these programs.

    Overall, management tone was upbeat, as despite the mixed picture, Sykes' top 50 clients, which represents 85% of revenues, grew by an average 5%. Sykes also gained two new brand names during the quarter.

  • Convergys Announces Q3 2011 Revenues Up 3.8% to $577m

    Nov 02, 2011 | Financial Results by Thomas Whittle

    Convergys has announced Q3 2011 revenues, for the period ended September 30, 2011, of 476.9m, up 3.8% year-over-year.

    Operating profit was $43.5m, giving an operating margin of 7.5%, a 130bps increase on Q3 2010.

    Q3 2011 revenue (and revenue growth) by service line was

    • Customer Management Services $490.9m (+6.1)
    • Information Management Services $83.6m (+2.1)
    • Corporate: $2.4m (-78.6).

    Q3 2011 customer management revenues (and revenue growth) by industry were:

    • Communications $300.3m (+12.0%)
    • Technology $40.9m (+11.4%)
    • Financial Services $51.9m (-10.8%)
    • Other $97.8m (-2.1%).

    Q3 2011 Customer Management operating income was $39.0, a margin of 7.9%, up from a margin of 6.8% in Q3 2010.

    Q3 2011 Information Management revenue (and revenue growth) by activity was:

    • Data Processing $11.7m (-24.5%)
    • Professional & Consulting $37.5m (+27.6%)
    • License & Other $34.4m (-7.0%)

    Q3 2011 Information Management operating income was $9.7m, giving a margin of 11.6%, down from a margin of 13.8% in Q3 2010.

    Analyst comments:

    Customer Management revenue growth was again driven by a high single figure increase in call volumes from the comms and technology sectors. The company has revised upwards Customer Management full year revenue guidance from $1,875m to $1,909m. Convergys has seen consecutive volume increases in the comms and technology sectors, which have been enough to offset the non-continuation of the U.S. census work.

    The Philippines was the main driver of growth, with smaller increases seen across all geographies except Canada.

    Customer Management delivery breakdown in terms of the proportion of agents as at end September is:

    • U.S. 40% (including 3,700 work at home agents)
    • Philippines 37%
    • India 15%
    • Latin America 4%
    • Canada 3%
    • U.K. 1%

    Convergys has a record number of agents in training, a consequence both of heightened attrition, primarily in Costa Rica and the Philippines, and of growth in a number of programs across several geographies.

    Growth for customer management has primarily come from 6 out of the top 10 clients, and Convergys anticipate continued volume increases from these clients in the near term. The growth in the Philippines is set to continue, with U.S. companies migrating more contact center functions offshore. This is particularly true for the telecoms and technology sectors, and Convergys are well placed to capitalize on this.

    IT Management saw go-live with a U.S. wireless carrier in the quarter. However overall the segment has not seen the resurgence that the Customer Management segment has, and the company reports that it will now be in the bottom quartile of prior year-end revenue guidance of $330m-$340m.

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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Thomas Whittle

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