2011 north america contact center outsourcing product differentiation excellence award

BEST PRACTICES RESEARCH

© 2011 Frost & Sullivan 1 “We Accelerate Growth”

Product Differentiation Excellence Award

Contact Center Outsourcing

North America, 2011

Frost & Sullivan’s Global Research Platform

Frost & Sullivan is in its 50th year in business with a global research organization of 1,800

analysts and consultants who monitor more than 300 industries and 250,000 companies.

The company’s research philosophy originates with the CEO’s 360 Degree Perspective™,

which serves as the foundation of its TEAM Research™ methodology. This unique approach

enables us to determine how best-in-class companies worldwide manage growth,

innovation and leadership. Based on the findings of this Best Practices research, Frost &

Sullivan is proud to present the 2011 North American Product Differentiation Excellence

Award in the Contact Center Outsourcing market to Teleperformance.

Significance of the Product Differentiation Excellence Award

Key Industry Challenges Addressed by Differentiated Offerings and Strategies

Contact center outsourcing provides a way for companies to subcontract agent activities

that are outside of their core competency and that can be done at a lower cost. This

movement is fueled by industry participants’ desire to use a mix of on-shore, near-shore,

and offshore facilities in order to provide continuous, around the clock coverage for their

clients in every corner of the globe.

Below are examples of contact center interaction services:

• Customer care, loyalty and retention

• Telesales, billing and post sale activities

• Wireless and cable activations

• Direct Response and sales campaigns

• Emergency notifications

• Collections & payment programs

This globalization of the contact center industry makes for more complex security

challenges, as clients operate in multinational, cross-border environments. New security

threats that involve more than conventional hacking are on the rise. For example, organized

crime syndicates target individuals –specifically call center agents- who actually have access

to sensitive information. This stolen information is then sold to others for a profit. This can

obviously compromise proprietary company information, private customer data and network



systems. Teleperformance properly dubs this significant change as a move from “fraud 1.0

to fraud 2.0.”

Despite the many safeguards that security certifications offer, contact center organizations

are challenged to proactively uncover and mitigate risks that come from data leaks, data

theft and outright fraud. There is also the challenge of providing physical security controls

and policies to protect employees, company facilities and equipment.

Finally, the principal competitive challenge in the contact center outsourcing market

revolves around the need for flexibility and speed in implementing customized client

solutions for security. To successfully meet clients’ needs, Frost & Sullivan independent

benchmarking confirms that providers must balance global agent capacity, the strategic use

of company resources, technology expenditures, security controls and the need for continual

employee training.

Impact of Product Differentiation Excellence Award on Key Stakeholders

The Product Differentiation Excellence Award is a prestigious recognition of

Teleperformance’s accomplishments in the contact center outsourcing sector. An unbiased,

third-party recognition can provide a profound impact in enhancing the brand value and

accelerating Teleperformance’s growth. As captured in Chart 1 below, by researching,

ranking, and recognizing those who deliver excellence and best practices in their

respective endeavors, Frost & Sullivan hopes to inspire, influence, and impact three

specific constituencies:

• Investors

Investors and shareholders always welcome unbiased and impartial third-party

recognition. Similarly, prospective investors and shareholders are drawn to

companies with a well-established reputation for excellence. Unbiased validation is

the best and most credible way to showcase an organization worthy of investment.

• Customers

Third-party industry recognition has been proven to be the most effective way to

assure customers that they are partnering with an organization that is leading in its

field

• Employees

This Award represents the creativity and dedication of Teleperformance’s executive

team and employees. Such public recognition can boost morale and inspire these

stakeholders to continue the pursuit of worldwide outsourcing leadership for

Teleperformance.



Chart 1: Best Practices Leverage for Growth Acceleration

Key Benchmarking Criteria for Product Differentiation Excellence Award

For the Product Differentiation Excellence Award, the following criteria were used to

benchmark Teleperformance’s market performance against key competitors:

• Unique Features/Functionality

• Quality/Complexity

• Customization

• Matched to Target Markets Needs

• Brand Perception of the Uniqueness of the Product

Decision Support Matrix and Measurement Criteria

To support its evaluation of best practices across multiple business performance categories,

Frost & Sullivan employs a customized Decision Support Matrix (DSM). The DSM is an

analytical tool that compares companies’ performance relative to each other with an

integration of quantitative and qualitative metrics. The DSM features criteria unique to each

Award category and ranks importance by assigning weights to each criterion. The relative

weighting reflects current market conditions and illustrates the associated importance of

each criterion according to Frost & Sullivan. Fundamentally, each DSM is distinct for each

market and Award category. The DSM allows our research and consulting teams to



objectively analyze each company's performance on each criterion relative to its top

competitors and assign performance ratings on that basis. The DSM follows a 10-point scale

that allows for nuances in performance evaluation; ratings guidelines are shown in Chart 2.

Chart 2: Performance-Based Ratings for Decision Support Matrix

This exercise encompasses all criteria, leading to a weighted average ranking of each

company. Researchers can then easily identify the company with the highest ranking. As a

final step, the research team confirms the veracity of the model by ensuring that small

changes to the ratings for a specific criterion do not lead to a significant change in the

overall relative rankings of the companies.

Chart 3: Frost & Sull ivan’s 10-Step Process for Identifying Award Recipients

Best Practice Award Analysis for Teleperformance

The Decision Support Matrix, shown in Chart 4, illustrates the relative importance of each

criterion for the Product Differentiation Excellence Award and the ratings for each

company under evaluation. To remain unbiased while also protecting the interests of the

other organizations reviewed, we have chosen to refer to the other key players as

Competitor 1 and Competitor 2.



Chart 4: Decision Support Matrix for

Product Differentiation Excellence Award

Measurement of 1–10 (1 = lowest; 10 = highest) Award Criteria

Unique

Features/Functionality

Quality/Complexity

Customization

Matched to Target Markets

Needs

Unique Name/Brand

Recognition

Weighted Rating

Relative Weight (%) 20% 20% 20% 20% 20% 100%

Teleperformance 10 9 9 9 10 9.4

Competitor 1 8 8 7 9 10 8.4

Competitor 2 8 8 8 8 9 8.2

Key Company Highlights and Operations

Teleperformance was established in France in 1978 by founder and CEO, Daniel Julien.

Teleperformance is currently the leading global provider of outsourced contact center

services. It competes against other Tier 1 giants in the industry including Convergys, IBM,

Sitel, Sykes, Teletech and West. The Group operates about 88,000 computerized

workstations, with more than 128,000 employees across 263 contact centers in 50

countries. Teleperformance conducts client programs in more than 66 different languages

and dialects.

Teleperformance positions itself in the contact center outsourcing market as P-2-B; people

to business. This is a new business concept that translates Teleperformance’s commitment

to put people first, building desirable places to work, and delivering outstanding customer

experiences for clients. Consolidated revenue stood at& 2.7 million (USD) in 2010,

representing an increase of more than 11.4% over 2009.

The Group now operates in the following three major geographic regions:

1. The English-speaking and Asia-Pacific region, which includes: Great Britain, USA, Canada,

China, Korea, Indonesia, the Philippines, Singapore, South Africa and Vietnam.

2. The Iberian-LATAM region, which includes Argentina, Brazil, Chile, Colombia, Costa Rica,

El Salvador, Mexico, Spain and Portugal.

3. The Continental Europe & MEA, which includes all countries in the EMEA region (Europe,

Middle East & Africa), except Great Britain, South Africa, Spain and Portugal.



Teleperformance has executed a strategy of extending the company’s geographic scope with

several targeted acquisitions in 2010. These included beCogent in the United Kingdom,

Metis in Turkey, U.S. Solutions Group in the United States, and TLS Contact, Europe’s

leading provider of visa application services. Teleperformance is publicly traded (NYSE

Euronext: Symbol 5180)..

Criterion 1: Unique Features/Functionality

With CEO Daniel Julian’s vision and support, Teleperformance has built its own unique

security team. It operates autonomously from the IT division. With the Chief Information

Security Officer (CISO) Bruce Wignall at the helm, a team of over fifty dedicated security

professionals holding various professional security certifications including CISSP “Certified

Information Systems Security Professional”, CFE “Certified Fraud Examiners”, CSA & CISA

“Certified Security/Information Security Auditor” and various other certifications enable the

proper scale of people with the necessary experience and skills to provide the best security

services to their customers. Team members are distributed across the three major

geographic regions noted beforehand. Competitors in the industry manage security within

their IT departments and do not have a dedicated organization.

The security team’s mission and core values include:

1. Following strict security standards to protect the confidentiality, availability and integrity

of clients' data, services and reputation.

2. The need to be measurable in its performance.

3. Being the security “center of excellence” leader in the industry

Competitive Advantage

Telepeformance responds to clients’ individual security requirements by assigning a CISSP

certified Security Analyst (SA) to each client account. Unique within the industry, the

Teleperformance SA is responsible for identifying resources, tools and processes to enforce

and manage client security requirements. In addition, Teleperformance also offers security

Service Level Agreements (SLA’s) to its customers. Frost & Sullivan firmly believes that

these dual security enhancements serve as distinct world-class competitive advantages.

Special Security Measures for Work-at-Home

The most important security measure for Work-at-home agents is the set of hiring

standards. Potential candidates undergo detailed screening and testing, including:

background checks; drug screenings; and skills assessments of abilities such as keying,

voice, and soft skills; an even more rigorous process than that for traditional on-site agents.

At-home agent candidates must pass evaluations that determine integrity and work ethics -

measuring their honesty and trustworthiness. Work-At-Home-Agents are required to have a



secure, dedicated work environment with no interruptions. Unlike its competitors,

Teleperformance goes the extra mile by checking for compliance. Supervisors conduct

unannounced on-site audits, randomly and/or with cause, during regularly scheduled shifts

for at-home employees. Frost & Sullivan points out that no other provider in the space

offers an advanced four-factor authentication process.

Teleperformance’s Work-At-Home security solution utilizes a pan/tilt/zoom video camera

enabling remote visual audit capabilities. This way local supervision and management in

the call center can conduct a quick virtual audit of the work-at-home environments. Clients

want to be assured that home agents comply with Teleperfomance’s clean desk rules, sans

non-employees or distractions in the work area.

Criterion 2: Quality/Complexity

Agent Authentication Management

Teleperformance has developed a proprietary solution to manage loose password controls

that may contribute to fraud for its contact center agents across all of its global centers.

Teleperformance’s Passport Secure Identity Management allows verified agents quick and

secure access to necessary applications. Voice bio-metric authentication combined with

Single Sign On technology provides definite confirmation of agent identity while eliminating

the need for multiple agent passwords and creating a simplified end-to-end login process.

This single sign-on voice authentication process prevents impersonation, unauthorized

system access, or sharing of passwords which helps in fraud prevention.

Criterion 3: Customization:

In June 2010, Teleperformance announced the launch of its Teleperformance Fraud Risk

Assessment (FRA) Solution. This is a new service intended to help identify and quantify the

business impact of fraud risks within many phases of a call center agent's work. It reviews

processes, applications, daily monitoring and reporting activities to provide a comprehensive

assessment of risks. The Teleperformance Fraud Risk Assessment is part of a four-phase

security-enhancing program. The assessment relies on knowledge of fraud trends, common

and known vulnerabilities among client applications, and some of the ways an agent could

circumvent controls within an application or process. The solution includes reviewing a

client's past incidents of fraud prior to a contractual engagement with Teleperformance. This

includes application vulnerabilities, environmental controls, recruiting, training goals,

operation expectations and compliance and regulatory requirements.

The FRA is conducted in collaboration with specific personnel from the client’s Fraud

Management Team, IT and security organizations. It is led by Teleperformance’s assigned

Security Analyst. The primary goal of the Fraud Risk Assessment Service is to identify how

fraud or data leaks occur and provide preventive and early detection controls for the client.



The Fraud Risk Assessment is conducted prior to the launch of new programs with the goal

of identifying the risks and prevention strategies or early detection strategies when

prevention is not possible. Once the assessment identifies the unique program risks,

Teleperformance’s security professionals utilize three criteria for prioritizing fraud risks for

its clients:

1. Popularity: how many people in the call center know of the vulnerability?

2. Exploitability: is it easy or difficult to exploit the vulnerability?

3. Severity: how severe is the impact with just one exploit of the vulnerability?

Teleperformance analysts then rate each of these three criteria on a scale of 1-3 (3 being

high) with the help of the client. The total of the 3 scores are taken to determine the risk of

the vulnerability ratings: A. 0-2 = low, B. 3-5 = medium C. 6-9 = high

Criterion 4: Matched to Target Market Needs

Foundational Excellence – Contact Center Security

When it comes to security compliance, the goal of any organization should be to maintain its

state of security in adherence with the minimum baseline compliance requirements set by

internationally recognized standards. By 2007 Teleperformance had already demonstrated

its leadership in the field by achieving VISA Payment Card Industry (PCI), level compliance

for U.S. and Mexico operations. Teleperformance stands among the first outsourcing

companies in the industry to attain this important certification. In 2010, Teleperformance

launched and deployed new processes, initiatives and products throughout its subsidiaries

to ensure that all global teams are compliant with its security policies and standards. This

includes the BEST Security Guide and the implementation, audit and management of more

than 200 internal Teleperformance security controls.

Market and Site Accountability

Each region in which Teleperformance operates has its own set of compliance standards. In

the North American market, this means that local, state and Federal regulations and

compliance rules must be documented and then scored against continuous monitoring and

control activity within each individual site. This approach carries over globally, ensuring that

the company’s compliance requirements are consistently deployed world-wide.

Each site is individually rated and regional CEO’s have accountability to meet stringent

company metrics and objectives. Teleperformance conducts frequent random remote quality

checks, with recorded voice and visual images, on every type of call and transaction.

Unlike most organizations that obtain annual security certifications and may experience

relaxed controls until the next annual audit, Teleperformance conducts various 3rd party

security audits as well as weekly compliance audits with visibility to the CISO and the CEO.



This process ensures consistent levels of security compliance each week rather than an

annual true-up process. This process extends a higher level of security and consistent

security to their clients.

Criterion 5: Brand Perception of the Uniqueness of the Product:

Additional Best Practices to Minimize Fraud

According to the Association of Fraud Examiners, the most effective fraud awareness

programs including knowledge of the controls in place and the likelihood of those controls

identifying fraudulent activity and the consequences if caught. Teleperformance leverages

this best practice during Agent training. During the training phase, Teleperformance shares

the proactive daily investigation controls and monitoring activities with new employees. This

drives expectations, discourages fraud and reinforces the appropriate behavior. Agents are

required to sign employee agreements regarding fraud and clean desk polices and agree to

the consequences. Most importantly, the agents see these controls in action on the call

center floor which changes behavior and thus creates effective awareness.

Teleperformance’s CCMS (Contact Center Management System) provides several additional

security safeguards. CCMS manages and tracks employees' time, holding home agents to

the same login and logout standards as on-site agents. In addition, the CallCopy system

serves as the call recording platform that preserves both voice recording and screen capture

for a set percentage of overall calls taken.

Physical Security

Teleperformance puts stringent measures in-place to protect its sites and employees from:

• Natural threats (Floods, earthquakes, tornadoes)

• Human threats (network-based attacks, malicious software, unauthorized access,

insider threats)

• Environmental threats (Long-term power failure, pollution, chemicals, liquid leakage)

Here is a partial list of Teleperformance’s facilities controls:

• Written security policies and building access procedures

• Badge sharing and piggy back entry is prohibited

• All visitors must be logged and admitted through reception

• 24x7 onsite security guards

• Card-key, biometric, or similar entry locks



• ID-badge system for all employees and visitors

• Individual lockers/cabinets to enforce the clean desk policy

• Video surveillance and motion sensors for entrances, interior doors, equipment

cages, and critical equipment locations within the building

World-class Technology Partners

Telepeformance has partnerships with the leading technology companies in the industry.

This includes Cisco, RSA, McAfee, and Microsoft to name a few. For its ISO, PCI and HIPAA

audits, the company utilizes ScanAlert, BT, AT&T, and Security Metrics. These solid

technology partnerships offer clients leading-edge technological solutions and full

integration with existing applications. Teleperformance continues to maintain compliance or

certification with the following regulations; ISO 2700x, PCI, HIPAA, HYTRUST, Mexico

Privacy Act, Safe Harbor, European Union Privacy Act and compliance with individual EU

country privacy laws.

Conclusion

It is Frost and Sullivan’s belief that Teleperformance has built a security-conscious culture

within the entire organization; reinforcing customer trust, reducing agent churn and

uncovering gaps that may put client intellectual property at risk. This is no small feat

when considering the fact that Teleperformance operates 263 contact centers in 50

countries with 128,000 employees. Given its proactive efforts to design and continually

improve internal controls, Teleperformance goes far beyond simply being compliant with

recognized security standards. In recognition of its demonstrated and unparalleled

excellence in security, Frost & Sullivan is pleased to recognize Teleformance with the 2011

Product Differentiation Excellence Award.

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Chart 5: 360 Degree Perspective™ Model

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