1

Sykes Business Process Outsourcing

Initial Business Plan
September 6, 2002
2
Agenda

Introduction

Market Overview and Competitive Positioning

Business Strategy

Marketing Strategy

Finania! Foreasts

Summary
"
Why Is This Relevant To Sykes?

Provides an opportunity to reate some #bat$% work and uti!i&e

potentia!!y id!e apaity

'eve!ops a ore ompeteny (#)ig$ *o!ume San and +nter

Operations%, t$at an be app!ied in a variety o- di--erent areas

+stab!is$es a position in a new $ori&onta! servie . aounting .

t$at an be app!ied to e/isting and new vertia!s

0s a -orma!i&ation o- pokets o- ativity a!ready under way wit$in

t$e ompany (P12 in Mani!a, 3ero/ in 4S,

5!!ows t$e ompany to move up t$e -ood $ain -rom being a

#servie -atory% to #proess e/pert% (see ne/t s!ide,
6
Value Proposition to Sykes
7everage Sykes +nterprises8
e/isting assets and apaity to provide a
a 9uik, additiona!, and pro-itab!e revenue stream
by per-orming !ient proessing:
;
Why the Andersen Team?
5ndersen
Consu!ting 4S
SSC < P$ase 0
5ndersen
Consu!ting 4S
SSC < P$ase 00
5ndersen
5merias
Operations Center
(PCO,
5ndersen +M+05
S$ared Servies
Center . Bare!ona
5ndersen
Consu!ting 4S
SSC < P$ase 00
5ndersen
5merias
Operations Center
(PCO, < 0nterna!!y
Foused

=2!oba! >evenue
Cy!e
=Cas$
Co!!etions
=C!ient
5ounting
=2enera! 7edger
Over 20 !ient or
BPO prospets
visited (5ndersen
5merias
Operations Center,
P2P
=Prourement
=5P
=Cas$ Mgmt
C>M
=Ca!! Ctr Support
=5ount Mgmt
=S75s
=Customer
Committees
>2>
=Payro!!
=?1+ >eporting
=+/pense 5udit
=Payro!! ?a/es
=Overseas P>
C2C
=C!ient@Aob 5t
=Bi!!ing
=Cas$
Co!!etions
=Cas$
5pp!iation
C2>
=2enera! 7edger
=5sset Mgmt
P2P
= 5P
= Cas$ Mgmt
C>M
= Ca!! Ctr Support
= 5ount Mgmt
= S75s
= Customer
Committees
>2>
= Payro!!
= ?1+ >eporting
= +/pense 5udit
= Payro!! ?a/es
= Overseas P>
C2C
= C!ient@Aob 5t
= Bi!!ing
= Cas$
Co!!etions
= Cas$
5pp!iation
C2>
= 2enera! 7edger
= 5sset Mgmt
5ndersen
Consu!ting 4S
SSC < P$ase 0
5ndersen
Proessing Center
Org (160@B1CM,
5ndersen 2!oba!
Proessing Center
Org (600@B6;M,
5ndersen 5ustra!ia
Operations
5ndersen SD
>egiona!
Operations
Business ase
!evelopment
"ocation
Selection
Sales #BPO$ or
SS$related%
Process !esign
Process
Implementation&
Operations
'anagement
Organi(ation
!esign and
'anagement
)
*
p
e
r
i
e
n
c
e
s
BPO
Skills
!epth
6
+irst ,-- !ays

Bui!d t$e Sykes BPO team

#Mine% e/isting Sykes

!ients@in-ormation -or
andidates -or new BPO
o--erings

#Mine% 5ndersen ontats

to identi-y potentia! Sykes
BPO !ients

4nderstand Sykes8 urrent

apaity uti!i&ation !eve!s
and apabi!ities

Begin Marketp!ae
awareness ampaign

Se!!
.- !ays /- !ays 0- !ays 1- !ays ,-- !ays
E
Agenda

0ntrodution

'arket Overvie2 and ompetitive Positioning

Competitive Positioning

Business Strategy

Marketing Strategy

Finania! Foreasts

Summary
C
'arket Overvie2
I
n
c
r
e
a
s
i
n
g

C
o
m
p
l
e
x
i
t
y
"evel o3
Intellectual
Property
Breadth o3
O33ering
!escription
)ig$ )ig$
P!ayer o--er mu!tip!e servies to a
sma!! range o- vertia!s
)ig$ Med
Provider speia!i&es in a group o-
re!ated proesses (e:g: )>,
-inane, and o--ers t$em to a
narrow range o- vertia!s
Med 7ow
Provider speia!i&es in a spei-i
proess (e:g: payro!!, to a
re!ative!y broad range o- vertia!s
7ow 7ow
Provider o--ers basi servies
(e:g: ustomer servie, to a
broad range o- vertia!s wit$ a
-ous on sa!e and ost
management
'oving up the 3ood chain yields longer term client commitments4 higher margins 2hile
re5uiring a narro2er 3ocus on verticals6 It may also entail development o3 IT and IP assets6
F
ompetitive "andscape #as o3 1&7-&-.%
Source: Edelweiss, Gartner research
-8
9-8
,--8
,9-8
.--8
.9-8
-8 .-8 /-8 0-8 1-8 ,--8
'
a
r
k
e
t

a
p
&
R
e
v
e
n
u
e

R
a
t
i
o
urrent Value&9. Week
Sykes
R':
)*ult
onvergys
StarTek
West
Teletech
APA
Sitel
:arte :anks
There is signi3icant ;Value Acceleration< potential 3or Sykes
10
Sykes Risk )valuation 'atri*

Sykes $as abi!ity to mitigate

maGor risk items ot$er t$an
ompetitors entering into t$e
spae as a #-o!!ow me% strategy:

Sykes wou!d be entering a

market t$at is sti!! ear!y stage and
$ig$!y -ragmented

?arget ompanies, -oused on

ost ontainment, wou!d be very
reeptive in urrent eonomi
environment

'ownside risk is minima! sine

t$ere is !itt!e up-ront investment in
in-rastruture or 0?
Score #,$lo24
9$high%
Importance To
Sykes
Risk 'itigator #'%&
Risk )nhancer #)%
)*ternal +actors

Competition . are t$ere entren$ed
ompetitors and are t$ey !argeH
" < Ies but
$ig$!y
-ragmented
market
)ig$ +
Customer #stikiness% . is t$is a
servie t$at resu!ts in t$e ustomer
beoming inreasing!y dependent on
Sykes
6 < Ies .
partiu!ary i-
Sykes takes on
responsibi!ity
-or ontinuous
improvement
Medium M
'urationJsi&e o- ontrat . are
ontrats genera!!y "K years and
va!ued at B;0MK
6 < S$ou!d be in
t$e "<; year
range
Medium M
Current!y !eve! o- outsouring . is t$is
outsoured todayH
2 < S$ared
servies are
growing area
)ig$ M
5re t$ere t$ings t$at pro$ibit entry into
t$e market in genera!
1 < Lo
signi-iant ones
Medium +
'uration o- sa!es y!e 2 < +/pet 6<12
mont$s
)ig$ +

Internal +actors

'oes Sykes urrent!y o--er t$is servie
(or a simi!ar one,
6 < Ies )ig$ M
Sa!es . an t$is servie be o--ered to
urrent !ients
6 < Ies )ig$ M
'oes t$is servie !everage e/isting
ompetenies . i- so, w$i$ ones ()>,
training, 0?, sa!es,
" < Ies . 0?
in-rastruture
)ig$ M
Capita! investment re9uired 1 . 4nder B1M Medium +
>1' investment re9uired and period o-
time be-ore it is ready -or market
1 . " mont$s Medium +
'oes it !everage e/isting in-rastruture
(-ai!ities, t$at are sitting id!eH
6 < Ies )ig$ M
'oes Sykes $ave t$e domain e/pertise
to #go to market% and sueedH
1 < Lo Medium +

11
Agenda

0ntrodution

Market Overview and Competitive Positioning

Business Strategy

Marketing Strategy

Finania! Foreasts

Summary
12
Business Strategy= ;>,--' in 9 ?ears<
'arket Strengths= What are 2e selling?

0nreased ost redutions

. O--s$ore e/periene
. 7everaging e/isting in-rastruture

Speed o- transition
. 5bundant e/pertise
. 4sing e/isting apaity

Operationa! e/e!!ene
.
Iears o- e/periene in mu!tip!e proess areas
.
Strutured C>M approa$es

Partnering on Continuous 0mprovement

. +/tensive proess design and $ange management
e/periene
. C!ient<-oused $istory and u!ture
1"
Business Strategy= ;>,--' in 9 ?ears<
Attacking the 'arket= Be Active and Visi@le

5ggressive!y pursue vo!ume transation proessing

. Sing!e or mu!tip!e -untions or proesses
.
D$et$er or not a!ready onso!idated

Forti-y t$e operation wit$ #bea$<$ead% !ients w$i!e pursuing

#an$or% !ients

0mmediate!y mine urrent Sykes !ient base

Ma/imi&e re!ations$ips wit$ 5ndersen ontats in various

industries

Pursue a target we know best < pro-essiona! servies

organi&ations

Seek stressed or distressed outsouring operations -or a9uisition

opportunities
16
Business Strategy= ;>,--' in 9 ?ears<
'argin contri@ution= Target ,-8
Pricing 'odel= Aood 3or the client and good 3or Sykes

?arget savings -or !ient o- 20M<"0MK

Begin wit$ prie<per<seat or ost<p!us

Migrate to -i/ed priing mode!

.
5!!ows -or margin e/pansions t$roug$ e--iienies
.
May s$are portion o- savings wit$ !ients to enourage
ontinuous improvement
> Substitute !ess e/pensive !abor J !everage e/isting apaity
>> 'rive t$roug$ operationa! e--iienies J proess
improvements
>>> 5pp!y te$no!ogy e--iienies
1;
Integrated ustomer Service Strategy
16
Revenues= >,--' in 9 ?ears
One$O33 Processing
(N !a 3ero/, P12,O B10M
10<20 ontrats
P B;00Q < B1M ea$
Pure BPO$type Processing

Sma!! Contrat 1 B;M

Sma!! Contrat 2 B;M

Sma!! Contrat " B;M

Sma!! Contrat 6 BE:;M

Sma!! Contrat ; BE:;M

Medium Contrat 1 B10M

Medium Contrat 2 B10M

7arge Contrat B1;M

Mega Contrat B2;M

Target Revenues= >,--'
?ear , ?ear . ?ear 7 ?ear / ?ear 9
1E
Agenda

0ntrodution

Market Overview and Competitive Positioning

Business Strategy

'arketing Strategy

Finania! Foreasts

Summary
1C
'arket !evelopment Approach

'eve!op ore ompetenies

. Dor!d !ass #San, s$ip, enter data% apabi!ity -oused on e--iieny
. Fous on ongoing proess improvement to drive inreased margins

?arget ompanies
. Current!y distributed operations t$at wou!d bene-it -rom entra!i&ation
. +nterprises in t$e B200<;00M range
. Pro-essiona! servies ompanies de!ivering $ig$<end servies to t$eir
!ients

Fous on ni$e
. Proure to Pay y!e wit$ near term attention on reating standard
po!iies and proedures
. +/tend into ot$er aountingJ-inane servies

+/pand into ot$er !abor intensive markets in t$e 12<26 mont$ $ori&on
. >ebate proessing
. Proessing maga&ine subsription -orms (-reebies,
1F
;Bu((< reation Plan B ?ear ,

Market Ging!e is #Cost Containment% and #Business Continuity%

Comp!ete " suess stories

. 3ero/, P12, Sykes F15

Comp!ete 2 w$ite papers

. #S$ared Servies, Outsouring, O--s$ore . 5 Pratia! 2uide ?o
Dading ?$roug$ ?$e Ma&e%
. #Business Continuity . Can Iour Outsourer Cost +--etive!y 'e!iver
?$atH%

Speak at 6<6 industry events

. Fous on ase studies
. PartiipateJspeak at 2<" pro-essiona! servies on-erenes
. Speak at -orums !ike t$e #Dor!d Outsouring Summit%

Begin -oused P> e--ort

. 0denti-y key trade pub!iations and pit$ -or interviewsJase studies
20
Agenda

0ntrodution

Market Overview and Competitive Positioning

Business Strategy

Marketing Strategy

+inancial +orecasts

Summary
21
+inancial B Initial Investment
:eadcount /
Payroll and Bene3its C--
Don$Payroll=
Travel ,.-
Technology .-
'arketing 9-
'isc6 0-
Total E9-
Assumptions=
= )eadount onsists o- 1 'iretor, 2 ProessJProGet Mgmt, 1 1 Sa!esJMarketing:
= 4se e/isting in-rastruture -or )>, Finane, etR
= 4se e/isting -ai!ities and oupany support:
= 4se e/isting in-rastruture -or te$no!ogies supporting t$e !ient(s,:
= Ot$er Lon<Payro!! in!udesO Mea!s 1 +ntertainment, ?raining, O--ie Supp!ies, Postage 1 S$ipping, et:
22
+inancial B Target ontri@ution
#>---Fs%
?ear , RRR ?ear 9
Revenues 1,000 RRR 100,000
Payroll 1,"00 RRR 6;,000
Donpayroll ;00 RRR 6;,000
Det Income #@&3 ta*% (C00, RRR 10,000
:eadcount "0 RRR 2,;00
Assumptions=
= Margin targeted at 10M -or a mature operation:
= +stimate -or P> and LP in year -ive based on -inania!s -rom 5SC, -ormer 55 BPO onsu!tant, and a onsu!tant
-rom 2unn Partners:
= 4se e/isting in-rastruture -or )>, Finane, etR
= 4se e/isting -ai!ities and oupany support:
= 4se e/isting in-rastruture -or te$no!ogies supporting t$e !ient(s,:
2"
Assumptions

5ess to e/isting sa!es resoures as re9uired -or ontats,

proposa!s, and !osing:

5ess to ade9uate 0? resoures in t$e BPO proposa!, sa!es, and

de!ivery proess:

)>, -ai!ities, seretaria!,and interna! 0? support resoures wi!! be

provided:

5t !east S o- proessing resoures wi!! be soured o--<s$ore:

26
Agenda

0ntrodution

Market Overview and Competitive Positioning

Business Strategy

Marketing Strategy

Finania! Foreasts

Summary
2;
Summary
!rivers to
Outsource
Buyer O@stacles
to Outsourcing
'itigation
More -ous on
t$e ore business
Fear o- !osing
ontro!
= +ngage ustomers in so!ution
deve!opment
= 'esign proesses optimi&ed
-or greater ontro! over t$e
business -untions
Andersen Team )*perience
= Customer Dorking Committees
= Servie 7eve! 5greements (S75,
= Tuarter!y QP0 >eporting
= 'etai!ed Proess and Funtion
7eve! 'esign
0mprove Servie
7eve!s
'i--iu!ty in $iring
and retaining
proess e/perts
Conern t$e
outsourer wi!!
!ower 9ua!ity o-
servie
= Create S75s and QP0
5ountabi!ity >eporting
= Maintain be!ow BPO average
attrition rate
= Servie 7eve! 5greements (S75,
= Tuarter!y QP0 >eporting
= 7ow 5nnua! 5ttrition 7eve!s
>edue
transation osts
Fear o- !ong term
$ig$er osts or
ost esa!ation
= 'eve!op detai!ed, base!ine
supported business ases
= *a!idate annua!!y t$e ost<
e--etiveness o- t$e outsouring
ontrat
= Standardi&e to ma/imi&e
eonomies o- sa!e
= Ben$marking
= 5tivity Based Costing@Mgmt
= 0nterna! #Memo% 4nit Cost Based
Bi!!ing
= 'etai!ed Proess and Funtion
7eve! >eengineering .
Standardi&ation and C0