Business Plan

Table of Contents

EXECUTIVE SUMMARY.....................................................................................................3

I. BACKGROUND AND PURPOSE.............................................................................5a) History....................................................................................................................................................5b) Current Conditions...........................................................................................................................6c) The Concept.........................................................................................................................................7d) Overall Objectives.............................................................................................................................9e) Specific Objectives..........................................................................................................................10

II. MARKET ANALYSIS...............................................................................................13a) Market Research..............................................................................................................................13b) Overall Market:................................................................................................................................14c) Specific Market Segment.............................................................................................................21d) Competitive Factors.......................................................................................................................25e) Growth Prospects............................................................................................................................39

III. DEVELOPMENT AND PRODUCTION...........................................................44a) Research and Development.........................................................................................................44b) Production Requirements.............................................................................................................47c) Productions Process.......................................................................................................................48d) Quality Assurance/Quality Control...........................................................................................49

IV. FINANCIAL DATA....................................................................................................51a) Financial Projections......................................................................................................................51b) Financial Ratios................................................................................................................................54c) Analysis................................................................................................................................................55

V. ORGANIZATION AND MANAGEMENT........................................................58a) Organization Chart.........................................................................................................................58b) Management Team.........................................................................................................................58

EXECUTIVE SUMMARY

Since the Industrial Revolution, companies have grappled with how they can exploit their competitive advantage to increase their markets and their profits. Outsourcing was not formally identified as a business strategy until 1989. However, most organizations were not totally self-sufficient; they outsourced those functions for which they had no competency internally. In earlier periods, cost or headcount reductions were the most common reasons to outsource. In today's world the drivers are often more strategic, and focus on carrying out core value-adding activities in-house where an organization can best utilize its own core competencies. The worldwide market for outsourcing services is estimated at one trillion dollars in 2008 and is projected to grow to three trillion dollars by 2015, a growth rate of 300%, according to The Black Book of Outsourcing.

ABC Sourcing Solutions is a global outsourcing business offering customized packages of bundled BPO services to middle-market US banks. The company will function as a facilitator, a single point-of-contact outsourcing provider and will leverage a globally diverse network of best-in-class service providers to deliver its hybrid business process and IT solutions. Initially the company will focus on providing (bundling) call center and HR functions through its vendor network.

For its customers, GSS will be US-based portal to global outsourcing specialists, a strategic partner that will manage and deliver scalable outsourcing services with better integration and service at less cost than managing multiple sourcing relationships in-house. Price competitiveness and service quality are two key benefits that in combination with the company’s marketing capabilities will dictate the success of GSS.

The initial objective is to raise the capital necessary to execute the business plan by second quarter 2009. GSS will reach break-even by the end of 2010 and achieve a 25% return on invested capital by end of 2011. From 2011 through 2015 the objective is to achieve revenue growth of 25% compound annual growth rate which is at par with the single relationship, multiple process outsourcing provider market.

To penetrate the market, GSS will combine in-bound call center outsourcing with HR outsourcing services. The outsourcing competition has not offered these two high-demand services in a single package. The skill set and systems are different enough to keep a single provider from benefiting from economies of scale. Yet with the company’s unique vendor-based delivery system GSS will be able to offer these attractive set of services in a single package.

Once GSS has established a successful marketing strategy and service delivery system, proven the model, and begun building its customer base, additional lines of service will be added, such as F&A, to broaden the GSS service offerings, increase revenue per customer and develop customer loyalty. As our customers restructure their business to benefit from globalization they will require a full range of service offerings. Since GSS’s competitive advantage is in the marketing and delivery system, adding extensions to its service offerings

will be a natural fit. The need for a single vendor will only increase as companies adapt to the global environment.

The revenues are expected to grow rapidly in the coming years. The jump in the revenue is mainly due to increase in outsourcing revenues. Although, the company is expected to make a loss in the initial period, the year on year growth in the profits depicts a positive trend. The company once earns stability in 2011, the profit margins ranges between 6% to 9% and EBITDA margin from 11% to 14% in the coming years.

The return on Assets, Equity and Capital employed are also expected to be high post 2010 with heavy cash balance. The company can make investments in order to earn better returns.

Overall, the outsourcing market is expected to grow tremendously in the coming years. GSS is expected to grow along with the market mainly because of it bundled outsourcing services.

I. BACKGROUND AND PURPOSE

a) HistorySince the Industrial Revolution, companies have grappled with how they can exploit their competitive advantage to increase their markets and their profits. The model for most of the 20th century was a large integrated company that can “own, manage, and directly control” its assets. In the 1950s and 1960s, the rallying cry was diversification to broaden corporate bases and take advantage of economies of scale. By diversifying, companies expected to protect profits, even though expansion required multiple layers of management. Subsequently, organizations attempting to compete globally in the 1970s and 1980s were handicapped by a lack of agility that resulted from bloated management structures. To increase their flexibility and creativity, many large companies developed a new strategy of focusing on their core business, which required identifying critical processes and deciding which could be outsourced.

Initial stages of evolutionOutsourcing was not formally identified as a business strategy until 1989. However, most organizations were not totally self-sufficient; they outsourced those functions for which they had no competency internally. The use of external suppliers for these essential but ancillary services might be termed the baseline stage in the evolution of outsourcing. Outsourcing support services is the next stage. In the 1990s, as organizations began to focus more on cost-saving measures, they started to outsource those functions necessary to run a company but not related specifically to the core business. Managers contracted with emerging service companies to deliver accounting, human resources, data processing, internal mail distribution, security, plant maintenance, and the like as a matter of “good housekeeping”. Outsourcing components to affect cost savings in key functions is yet another stage as managers seek to improve their finances.

Strategic partnershipsThe current stage in the evolution of outsourcing is the development of strategic partnerships. Until recently it had been axiomatic that no organization would outsource core competencies, those functions that give the company a strategic advantage or make it unique. Often a core competency is also defined as any function that gets close to customers. In the 1990s, outsourcing some core functions may be good strategy, not anathema. For example, some organizations outsource customer service, precisely because it is so important.

Eastman Kodak’s decision to outsource the information technology systems that undergird its business was considered revolutionary in 1989, but it was actually the result of rethinking what their business was about. They were quickly followed by dozens of major corporations whose managers had determined it was not necessary to own the technology to get access to information they needed. The focus today is less on ownership and more on developing strategic partnerships to bring about enhanced results. Consequently, organizations are likely to select outsourcing more on the basis of who can deliver more effective

results for a specific function than on whether the function is core or commodity.

What is outsourcing?Outsourcing can be defined as “the strategic use of outside resources to perform activities traditionally handled by internal staff and resources”. Sometimes known also as “facilities management”, outsourcing is a strategy by which an organization contracts out major functions to specialized and efficient service providers, who become valued business partners. Companies have always hired contractors for particular types of work, or to level-off peaks and troughs in their workload, and have formed long-term relationships with firms whose capabilities complement or supplement their own. However, the difference between simply supplementing resources by “subcontracting” and actual outsourcing is that the latter involves substantial restructuring of particular business activities including, often, the transfer of staff from a host company to a specialist, usually smaller, company with the required core competencies.

Why do companies outsourceHere are some common reasons:

Reduce and control operating costs Improve host company focus Gain access to world-class capabilities Free internal resources for other purposes A function is time-consuming to manage or is out of control Insufficient resources are available internally Share risks with a partner company

In earlier periods, cost or headcount reductions were the most common reasons to outsource. In today's world the drivers are often more strategic, and focus on carrying out core value-adding activities in-house where an organization can best utilize its own core competencies.

b) Current Conditionsi. ABC Sourcing Solutions (GSS) is a global outsourcing business offering

customized packages of bundled BPO services to middle-market US banks. The company will function as a facilitator, a single point-of-contact outsourcing provider and will leverage a globally diverse network of best-in-class service providers to deliver its hybrid business process and IT solutions. Initially the company will focus on providing (bundling) call center and HR functions through its vendor network.

ii. PROMISING NEW PRODUCTS - FUTURE INCREASED RETURNS????The worldwide market for outsourcing services is estimated at one trillion dollars in 2008 and is projected to grow to three trillion dollars by 2015. According to the Black Book of Outsourcing, the market for outsourcing services worldwide will grow 300% between today and 2015. “The latest developments in outsourcing stay in high demand by investors, analysts, advisors, competitive suppliers and savvy buyers. In the search for the next

big thing, the client-centric vendor is king. Local front office operations, “one team” partnerships and driving business transformation for client improvements are “in.” (Excerpt from the Executive Summary, 2008 State of Outsourcing Industry Report, Brown & Wilson)

Bundling is a market-leading approach to outsourcing that takes a comprehensive set of end-to-end processes across core and non-core business functions and IT systems and combines them into a single outsourcing arrangement. A bundled outsourcing approach enables companies to gain significant efficiencies by bridging the traditional silos of core and non-core business functions. As the reliance on various forms of outsourcing grows rapidly across every industry, a number of organizations—those who are “masters of outsourcing”—are gaining major competitive advantages and are growing more rapidly than their competitors by outsourcing a bundle of business processes across functions.

GSS and savvy market watchers believe the outsourcing market will continue to evolve toward bundling or combining outsourcing services. Outsourcing several related functions at the same time enables executives to “connect the dots” among different business functions, sharing resources, applications and platforms. The company will become a leader in the outsourcing services industry by focusing on providing unmatched customer service through its single point-of-contact, best-in-class bundled BPO services.

c) The Concepti. For its customers, GSS will be US-based portal to global outsourcing

specialists, a strategic partner that will manage and deliver scalable outsourcing services with better integration and service at less cost than managing multiple sourcing relationships in-house. Price competitiveness and service quality are two key benefits that in combination with the company’s marketing capabilities will dictate the success of GSS. Single-service outsourcing providers have been successful in delivering both cost savings and service quality to their customers. Providers of multiple services generally place emphasis on one factor over the other, typically service quality more than cost savings, though through process efficiencies they are able to reduce costs. GSS will maximize the benefits by delivering individual best-of-breed providers through a single relationship and integrative delivery system.

The market for outsourcing providers is fragmented. The majority of providers are single business process providers, such as Jack Henry & Assoc. and Integrated Bank Technology which provide banking software solutions or Advantec and eTelecare Global Solutions which provide HR outsourcing and in-bound call center outsourcing respectively. On the other end of the spectrum is Accenture. Accenture is a market leader of bundled consultancy and outsourcing services primarily to the large business and government market. However, with the purchase of Savista in 2006, Accenture did make a move to serve the middle-market. Accenture, as well

as other multi-service providers are limited in the number and types of services that they offer. Their strategy has been expansion through M&A. Though this does provide a market entrance advantage, they are limited to the amount of diversification, flexibility, and nimbleness they can achieve.

ii. The vendor relationship and delivery system distinguishes GSS from its competitors. GSS will leverage global labor arbitrage to provide the best price to its customers, and through its flexible vendor network will be able to provide the best of any type of service at the best globally available price point. Vendors will provide the specific service, and through its integrated IT portal GSS will facilitate the service delivery and assure that the vendors are maintaining service levels that meet or exceed GSS’s customer’s expectations. The ability to source multiple providers will assure delivery of the best combination of service and price.

Business model – System Design

None of the target customers (initially banks) can opt out of globalization. If they do not purchase service through GSS, they will be left to manage multiple outsourcing contracts with a variety of providers and will struggle to integrate the services across their business. Another option for them is to source some processes leaving partial efficiency improvements and potential cost savings unrealized. The result will be unrealized efficiency improvements, reduced cost savings, and disconnected information between independent silos of business functions. The future competitive landscape will squeeze out banks that follow these paths. They will be forced to maximize their strategic partnerships and eventually move to a single provider such as GSS to gain maximum efficiencies.

d) Overall ObjectivesThe initial objective is to raise the capital necessary to execute the business plan by second quarter 2009. GSS will reach break-even by the end of 2010 and achieve a 25% return on invested capital by end of 2011. From 2011 through 2015 the objective is to achieve revenue growth of 25% compound annual growth rate which is at par with the single relationship, multiple process outsourcing provider market.

To penetrate the market, GSS will combine in-bound call center outsourcing with HR outsourcing services. The outsourcing competition has not offered these two high-demand services in a single package. The skill set and systems are different enough to keep a single provider from benefiting from economies of scale. Yet with the company’s unique vendor-based delivery system GSS will be able to offer these attractive set of services in a single package.

The company will provide consultancy services centered on these service identifying areas of potential cost savings and performance enhancements for both core and non-core business functions along with a cost-savings analysis and proposed solution for the outsourcing of select business processes. The consultancy services will be priced with incentives for prospective customers who choose to implement the outsourcing strategy with the company.

Once GSS has established a successful marketing strategy and service delivery system, proven the model, and begun building its customer base, additional lines of service will be added, such as F&A, to broaden the GSS service offerings, increase revenue per customer and develop customer loyalty. As our customers restructure their business to benefit from globalization they will require a full range of service offerings. Since GSS’s competitive advantage is in the marketing and delivery system, adding extensions to its service offerings will be a natural fit. The need for a single vendor will only increase as companies adapt to the global environment.

e) Specific Objectives Revenues/Sales

Initial revenues will be generated from the company’s consultancy services with outsourcing contracts to follow.

Profitability The company will price its consultancy services with a target gross profit of 50% with incentives for prospective customers who choose to implement the developed implementation strategy with the company.

The target outsourcing model will allow customers to save 40% of their domestic labor and benefits costs. The company will seek a 25% gross profit margin and will target its operating expenses at 12.5% or less.

Market share/Market standing

Service quality Service quality is at the heart of what makes a successful relationship. Deficiencies of service rather than unrealized cost savings have lead to the majority of failures in outsourcing relationships. Poor governance, multi-supplier environments, poor communication, unclear expectations, misaligned interests and relationships that over time become no longer mutually beneficial are responsible for relationship failures, increased risk and unanticipated costs for the client.

The service objective for GSS is to create a mutually beneficial, partnership environment where customers select a long-term growing relationship with GSS. To create such an environment, the company will focus on providing a solution to the above causes of failure by proactively evaluating company-wide needs, the ever-changing expectations, maintaining interest alignment and managing the multiple-supplier environment for the client. As the facilitator/manager of the outsourcing relationships, the company will monitor the big picture – the functioning of the company as a whole – so that interests remain aligned over time and that the client’s strategic or tactical changes can be implemented successfully within the outsourcing vendors. The nature of the business design positions GSS as the service coordinator constantly focused on the client.

2009: GSS will establish vendor relationships with a business process mapping/consulting firm and four globally diverse suppliers that provide call center and HR outsourcing. The suppliers will be selected based upon the following criteria in order to provide a high level of service to our customers:

Have a proven track record Demonstrate best practices Continually increase expertise and capabilities Possesses excess capacity and the ability to add capacity quickly Bring added value through innovation Focus on efficiency and cost reductions Pricing flexibility Geographic location

The company has received a commitment from Advantec to be one of GSS’s HR services vendor. Advantec is a Tampa based HR outsourcing company with service centers in Chennai, India. Through our relationship with Advantec, GSS is able to provide services such as:

Integrated Human Resources, Benefits, Payroll, and Tax Services Scalable services and technologies that minimize additional capital

expenditures for your clients. Comprehensive industry expertise in compliance consulting and

workers compensation.

Full administrative services including: Training & Education Courses, Recruiting Solutions, Drug & Background Screening, and On-boarding of Employees

Powerful benefits administration systems and services

The company has also received a commitment from CompanyXYZ, located in Chennai, India to provide business consulting services. CompanyXYZ provides:

??? (another of John Sansoucie’s offshore companies)

2010: The objective is to increase global diversification of our vendor network in order to achieve constant improvement in the level of service we provide our customers base. The strategy is to maintain a minimum of two independent vendors covering similar services in each geographic region. GSS will have multiple vendors service each customer. This will leverage the relationships of each vendor; reduce service delivery risk by spreading it across the entire vendor network. It will also provide GSS with critical information about economic, political, and social changes that might affect service level or cost changes. These changes will inevitably occur over time. Geographic diversification of vendors will allow GSS to redirect service delivery as needed to remain ahead of economic or changes to service delivery risk.

GSS plans to engage four service centers in India (2-call centers, 2-HR providers), two call centers in the Philippines, two Spanish-speaking call center providers in South America, and two additional HR providers outside of India, yet to be identified.

2011: The Objective is to have a proven, successful track record of consultations leading to multiple outsourcing contracts. By mid 2011, the company will have the first complete year of outsourcing contracts under its belt. To prepare for the coming contract renewal period, GSS will add one additional service to increase the revenue per customer and to attract new customers who are receptive to the new lines of service. To increase the probability of existing customers taking advantage of the additional services, GSS will survey the existing customer base and add the service which ranks highest among the existing customer’s additional needs.

The objective up to this point has been to establish the company’s credibility as a strategic, service-oriented partner and to foster a need within the customer base for expanded services utilization. The expansion might include additional back-office support, marketing, sales, CRM, or financial management processes that support the customer’s competitive advantage.

2012: Additional service offerings will be added at a pace that will be determined by the company’s ability to understand the risks inherent within the different disciplines and by the company’s ability to identify and integrate proficient suppliers. The company’s objective is to provide service levels that will foster a high level of customer retention, recurring revenue and expanding service offerings and utilization.

2013: GSS will target at the below aspects:

Innovation Efficiency/productivity Employee morale Management development Social concerns/social responsibility (impact on community)

II. MARKET ANALYSIS

a) Market Researchi. Research from BM/EIU projections, Thomson One Banker, and the IBM

Institute for Business Value analysis states that “there’s no denying the reverberations of the credit crisis that began in 2007. Even if the crescendo finally has occurred, retail banks face flattening performance, market turmoil and a mounting global shift in assets. Yet, the worldwide financial system is expected to quadruple by 2025 to nearly US $1,300 trillion.” Market advantage will lie with those banks that rethink their strategy, structure and culture to reflect a changed reality.

Banking executives agree: globalization will yield new windows of opportunity, pushing banks beyond today’s boundaries. And, while many banks feel unprepared, the reality is no bank – big or small – can opt out. Managing global talent will be critical, and Forrester Research has found that the costs to manage multiple suppliers can increase contract costs from 4 to 30 percent. More and more companies are turning to multisourcing as a way to drive down pricing, obtain best-of-breed services, minimize delivery risk, and increase their capacity to scale.

Without question, banking is becoming more global. However, banks have a choice in how they attain greater growth, efficiency and effectiveness. Banks are struggling to operate in a more agile and global fashion, yet a surprising 51 percent of universal banks rank their global integration capabilities as moderate to poor – and the figure rises to 69 percent across all respondents. – IBM/EIU projections; Thomson One Banker; IBM Institute for Business Value analysis.

The opportunities for financial services outsourcers are growing at the fastest rate of all the areas. Financial enterprises are relying on outsourcing as part of their broader strategic sourcing plans to achieve their common goal of improving competitiveness while reducing costs. Financial Services outsourcing vendors are experiencing the fast growth in opportunities.

Leading economic indicators show America’s institutions that provide financial services are suffering as much or more than the real estate industry.  Financial services like banks have increasingly turned to downsizing and outsourcing to reduce their cost commitments.  Financial services are a paperwork intensive industry that is looking for cheaper ways to perform these activities, such as using a virtual assistant or outsourcing company.

As these financial institutions (Bankers) struggle to reduce capital costs and gain budget flexibility they increasingly rely on outsourcing in this field, sometimes called Knowledge Process Outsourcing to handle many of their administrative tasks, A sound economic analysis of their payroll expenses has caused many financial services to outsource certain tasks to third parties.  Typically, banks and other financial services outsource areas of Finance & Accounting such as: Bookkeeping/accounting Accounts payable/receivable General ledger accounting Customer order processing Payroll

Advances in technology have given the outsourcing industry the ability to perform more complex and important functions.  Two such areas are forms processing and data capture & entry.  Data capture and entry is the process of getting data into application processing systems.  Innovative technology now allows a virtual assistant to convert large volumes of hard copy and image-based forms into fielded electronic formats. 

The combination of staff reductions and technology advances has allowed financial services to outsource important work at a much cheaper rate.  The battered economy has led many in the financial service industry to reevaluate their employment practices.  Instead of being “top heavy” in management, now financial services have the option to outsource vital assignments.  Outsourcing solutions to the financial services sector now include: financial project management

planning & budgeting project monitoring analysis of financial data

As global economics evolve, so do the capabilities of outsourcing services.  The type of endeavors that are now sought demand that outsourcing services have a perfectly clear understanding of client applications, associated hardware and software and all ancillary equipment that is used to help support client requirements.

b) Overall Market: i. Overview

The worldwide market for outsourcing services is estimated at one trillion dollars in 2008 and is projected to grow to three trillion dollars by 2015, a growth rate of 300%, according to The Black Book of Outsourcing. “The latest developments in outsourcing stay in high demand by investors, analysts, advisors, competitive suppliers and savvy buyers. In the search for the next big thing, the client-centric vendor is king. Local front office operations, “one team” partnerships and driving business transformation for client improvements are “in.” (Excerpt from the Executive Summary, 2008 State of Outsourcing Industry Report, Brown & Wilson) The market for outsourcing multiple processes under one relationship is growing at a 25% compound annual growth rate, compared to a 10% rate for outsourcing a single business process – Everest Research Institute.

The United States is the largest single market for outsourcing services. In 2007, outsourcing saved the financial services industry an estimated $9 billion a year, up from $5 billion in 2006, according to Deloitte and Touches. More than 75 percent of major financial institutions now have operations offshore, compared to less than 10 percent in 2001, the report notes, and the trend toward outsourcing work to low-labor-cost areas of the world will become more common. Gartner’s Business Process Outsourcing Forecast Database, November 2007 by Robert H. Brown and Kathryn Hale indicates that spending on services in the Business Process Outsourcing market is expected to grow from $144 billion in 2006 to an estimated $234 billion by 2011.

"Over the years we've seen banks move more toward outsourcing…," the vendors are “better at managing those risks than a community bank is." Raj Patel, a partner at Plante & Moran PLC of Southfield, Mich., the accounting and business advisory firm that compiled the survey results for the ICBA (Independent Community Bankers of America).

According to Julio Ramirez, globalization and outsourcing practice leader at the Hackett Group, ‘many companies are hitting the pause switch on their globalization efforts’. And with the transformational projects on hold the outsourcing companies will see less of the request for proposals (RFPs) till such time the recession scenario actually unfolds. There might also be a ‘dip in deal size especially in the full service models’ per Soumit B, Senior

Analyst at Everest Research Institute, as buyers become frugal in determining scope of contract.

With the given scenario purchasers will look to vendors to offer them help in savings and productivity. Rupee appreciations against the dollar and the general inflationary levels in India aren’t helping much. Rupee in fact gained about 11% against the dollar between January and December 2007, which resulted in higher costs for the clients and lower earnings for the offshore service providers.

Hedging of course is an option available to the sellers to manage currency exchange rate risk but it eventually would put more pressure on the bottom-lines as it adds to the costs. Again, wages in India are escalating and the companies are planning to reduce the salary increments ‘to single digits in the next couple of years’ to control the costs. The difficulty with this option is attrition and it needs to be seen how the outsourcing companies would now manage the already high rates.

US recession, however, has some positive effects too on the industry. Hundreds of thousands of small medium enterprises (SMEs) are waking up to benefits of offshore outsourcing industry. Times of India states that SME deals from the US would be around $8 billion by March 2009 and $11 billion by March 2010 from the current levels of about $7 billion. Also the slowing US economy could push the outsourcing up to new levels to low-cost destinations and per the global research firm Gartner India here has ‘a definite advantage over other countries’.

So to better tap the opportunities venders need to move to low cost destinations – either within the country or even outside of it. Trend is evident with many of the top firms opening their offices in countries like Philippines, Singapore, Malaysia, Sri Lanka and a few east European countries. Companies are also looking for new client outside the US – particularly in the English speaking countries of the UK, Australia, New Zealand and Canada.

Industries that have the most aggressive strategic sourcing plans to expand initiatives in 2008-2009 include:

ii. Characteristics

Market Size – Global BPOAccording to Gartner, a market research firm, the size of the global BPO market by 2007 would be $173bn, of which $24.23bn would be outsourced to offshore contractors. Of this, India has the potential to generate $13.8bn in revenue. "The projection includes revenues of pure play Indian BPO service providers, captives operations of MNCs operating in India, third party service providers and BPO subsidiaries of IT services firms. 

North America will remain the dominant market for ITES-BPO services, accounting for nearly 60 percent of the total ITES-BPO market in 2006. The main verticals in the North American ITES-BPO market are telecommunications, financial services, health care and energy. Commonly outsourced processes include internal auditing, payroll, human resources, benefits management, contact centers/customer care,

payments/ claims processing, real estate management, and supply chain management.

The Global business process outsourcing (BPO) market is forecast to hit $450bn by 2012.

BPO total contract value grew across all major regions worldwide in 2007, fostered by increased capabilities among suppliers, says analyst Nelson Hall.

The credit crunch will hasten organizations move offshore, as companies look to reduce costs and buy their way into emerging growth markets, particularly in the financial services and telecoms sectors, the report says.

The emerging economies of Asia and Latin America will ride the crest of this wave, housing support functions such as finance and accounting services, and benefiting from the relocation of existing shared services centers.

HR Outsourcing - Industry Background and Market SizeMany large corporations have begun to outsource discrete, non-core functions of their operations, such as payroll and benefits administration, in order to address many of the problems found in traditional human resources departments.

The Internet makes the HR BPO delivery model possible by facilitating interactive communications among large groups of individuals in multiple geographic locations. It is estimated that by using the functionality of the Internet to move HR delivery to a largely self-service mode, organizations can achieve annual HR cost reductions of approximately 25%-30%.

To date, however, HR departments have not fully utilized the Internet because they have not broadly implemented any mechanism for effectively centralizing and organizing the large amount of information and electronic transmissions within the HR organization. Accordingly, the Internet's use in HR departments has been mostly limited to one-on-one e-mail communications or process-specific internal networks.

The Size of the HR Process Outsourcing MarketMany large corporations outsource discrete, non-core functions of their operations, such as payroll, tax filings, and benefits administration.

The market for multi-process HR outsourcing is relatively new. It is estimated that approximately 300 of the Global 500 are viable candidates for HR outsourcing. Based on the median employee base and estimates of annual spending per employee for various services, we estimate that the addressable market basic HR outsourcing consists of annual spending of approximately $29 billion per year.

Comprehensive HR process outsourcing for large corporations requires a well-developed service delivery infrastructure and significant expertise in analyzing, providing, and managing HR processes across many divisions and third-party vendors. It also necessitates policies, procedures, operations, and technologies that yield superior performance as measured by productivity, cost, quality, and customer satisfaction metrics.

Call Centers - Financial Services its market size and structureFinancial services companies understand call centers’ importance more than other industries – as evidenced by their resource allocation. Companies know that each customer contact through the call center is a new opportunity to build or expand the relationship.

While call centers are often assumed to be large, factory-like operations, it is found that most are relatively small organizations.

The figure below shows that the size of call centers varies substantially by industry, customer segment, and whether they are in-house or subcontracted. ‘High end’ centers serving large business or offering business and IT services are the smallest in size, averaging under 100 employees at a worksite. This small office environment allows for close relationships among employees and managers and limits the extent to which scale economies offered by call center technologies can be realized. In-house centers serving telecommunications and financial services have just under 200 employees, while those in retail average 230. Centers of this size can realize some economies of scale in the allocation of labor, while retaining some level of interpersonal relationships between and among managers and employees. Subcontractors, by contrast, average almost 400 employees per center, or twice the level of in-house centers. This difference in size suggests that outsourced centers, on average, can make greater use of standardized call center technologies.

Traditional call center thinking emphasizes the importance of technology, and excellent call centers are usually at the cutting edge. This report, however, points to human resources as the most critical – and most difficult to master – component of call center management.

To turn a profit, call centers must master cross-selling and up-selling strategies. These techniques depend on the people handling the calls, so call centers must design customer service jobs to be desirable and build strong career paths.

Both quantitative and qualitative findings demonstrate how successful financial services call centers master these three critical components:

Strategy and Measurement – Cross-selling, up-selling and outsourcing strategies. Learn what measures are most important to managing a successful call center.

Call Center Processes – Improve efficiency through better call routing and technology.

Human Resources – Understand how successful call centers recruit and retain top customer service representatives.

iii. Leading Companies

Accenture : A management consulting, technology services and outsourcing organization. The Company’s business is structured around five operating groups, which together comprise 17 industry groups serving clients. The operating groups of the Company are Communications & High Tech, Financial Services (21% of FY08 revenue), Products, Public Service and

Resources. On the verge of becoming a megavendor, 2008 total revenues increased 18% over 2007 to $25.31 billion with pre-tax income of $3.108 billion. Much of Accenture’s outsourcing work consists of long-term contracts that are rarely eliminated in response to an economic downturn, since they help corporations operate more efficiently. The company is global in nature, and the America’s region contributed 42% of total FY08 revenue. Rated #1 by the International Association of Outsourcing Professionals (IAOP) The 2008 Global Outsourcing 100. Rated #11 by The Black Book of Outsourcing on their “Best Managed 50” Global Outsourcing Vendors Survey List.

Infosys Technologies Ltd .: Infosys defines designs and delivers IT-enabled business solutions that help Global 2000 companies win in a flat world and stretch their IT budget by leveraging the Global Delivery Model that Infosys pioneered. 2008 revenue was up 35% from 2007 to $4.176 billion from $3.09 billion. Pre-tax for 2008 was $1.326 billion up from 2007’s $936 billion, an increase of 41%. Rated #3 by the International Association of Outsourcing Professionals (IAOP) in The 2008 Global Outsourcing 100. Infosys fell off of the Black Book of Outsourcing’s “Best Managed 50” list in 2008, but was rated #10 in 2007.

IBM Global : IBM knows how to play the role of a strategic partner and proactively contribute to customers’ business and IT strategy. One of the largest global infrastructures, which has led to economies of scale that pass on to customers. 2007 revenue for IBM’s global outsourcing $13.5 billion. Rated #2 by the International Association of Outsourcing Professionals (IAOP) in The 2008 Global Outsourcing 100. Rated #14 in 2007 by The Black Book of Outsourcing on their “Best Managed 50” Global Outsourcing Vendors Survey List, however IBM fell off of the list for 2008.

Hewlett Packard : More than 700 clients around the world trust their critical IT infrastructure, applications, and business processes to HP – firmly established as one of the world’s largest and most trusted outsourcing service providers. 2007 revenue of $5.3 billion. Rated #8 by the International Association of Outsourcing Professionals (IAOP) The 2008 Global Outsourcing 100. Rated #1 by The Black Book of Outsourcing on their “Best Managed 50” Global Outsourcing Vendors Survey List.

EDS : Purchased by HP on August 26, 2008 for $13.9 billion. A leading global technology services company offers a broad portfolio of business technology solutions backed by an unrivaled global infrastructure and the most experienced team of professionals in the industry it pioneered more than 45 years ago. The company’s core portfolio comprises IT outsourcing, applications and business process outsourcing services. Revenues of $22 billion. Rated #12 by the International Association of Outsourcing Professionals (IAOP) The 2008 Global Outsourcing 100. Rated #5 by The Black Book of Outsourcing on their “Best Managed 50” Global Outsourcing Vendors Survey List.

Perot Systems : Since 1988, Perot Systems Corporations has delivered technology-based solutions to help organizations worldwide control costs and cultivate growth. Drawing on deep industry expertise and a portfolio of interrelated consulting, business process, application, and infrastructure services. 2008 projected revenue of $2.8 billion. Rated #2 by The Black Book of Outsourcing on their “Best Managed 50” Global Outsourcing Vendors Survey List.

24/7 Customer : the first BPO company that provides integrated customer lifecycle management service through a multishore global delivery model. Established in 2000, 2007 revenue of $63.9 million. Rated #28 1 by the International Association of Outsourcing Professionals (IAOP) The 2008 Global Outsourcing 100. Has not been made the top 50 on The Black Book of Outsourcing since 2006, yet still mentioned as a top global vendor.

Capgemini : A global leader in outsourcing, Capgemini’s collaborative approach allows clients to achieve better, faster, and more sustainable results providing both outsourcing and consultancy services. Established in 1995, 2007 revenue of $700 million. Rated #5 by the International Association of Outsourcing Professionals (IAOP) The 2008 Global Outsourcing 100. Rated #12 by The Black Book of Outsourcing on their “Best Managed 50” Global Outsourcing Vendors Survey List.

Sitel : Provides fully integrated customer care and back office processing services that focus on delivering a return on customer investment to our clients by reducing service costs, improving customer retention and increasing revenue per customer. Formerly Clientlogic Corporation which was founded in 1989, Sitel was established in 2007, 2007 revenue of $24.9 billion. Rated #21 by the International Association of Outsourcing Professionals (IAOP) The 2008 Global Outsourcing 100. Rated #33 by The Black Book of Outsourcing on their “Best Managed 50” Global Outsourcing Vendors Survey List.

c) Specific Market Segment

As reported by the Offshoring Times in 2007, the US banking, financial services and insurance industry offshoring pie will be worth $400-billion by 2010. Surveys estimate that the US BFSI industry would outsource as much as 20% of its cost base (amounting to $400 billion) to offshore locations. In a report published in 2008 by IBM Institute for Business Value analysis, they estimate that spending in the US banking sector alone will climb from US$97 billion in 2007 to US$153 billion by 2011 for offshoring services.Outsourcing in the banking and financial services sector demonstrated short-term signs of a slowdown at the end of 2008 due to the economic crisis, but the market will likely regain momentum in early 2009, according to the Market Vista: Q3 2008 report on global outsourcing and offshoring activity by the Everest Research Institute.

ABC Sourcing Solutions has established a target market of US middle-market banks employing between 250-2500 personnel of which there are

518 customers. For reference, there are 36,909 US banks with over 2,500 employees. Banks have an imperative to collaborate in a global industry – and they know their competitors are already learning to tap into the lower-cost capabilities and experiences of other institutions. They have a choice in how they attain greater growth, efficiency and effectiveness – all banks must consider at least some aspects of becoming a globally integrated enterprise. A shift toward more fluid, globally integrated enterprises will enable banks to capture opportunities whenever and wherever they exist – on the revenue and cost sides.

Astute banks will focus on four key imperatives now in order to gain optimum competitive advantage by 2015: focus on core strengths and partner for everything else, optimize the potential of each customer relationship, harness the potential of the workforce through effective performance management and recognize that technology will be a critical element of success.

i. Leading companies serving Financial Services IndustryThe leading outsourcing companies serving the financial services industry are very strong financially.

Accenture : A management consulting, technology services and outsourcing organization. The Company’s business is structured around five operating groups, which together comprise 17 industry groups serving clients. The operating groups of the Company are Communications & High Tech, Financial Services (21% of FY08 revenue), Products, Public Service and Resources.

Infosys Technologies Ltd. : Infosys defines designs and delivers IT-enabled business solutions that help Global 2000 companies win in a flat world and stretch their IT budget by leveraging the Global Delivery Model that Infosys pioneered.

Genpact Limited : Genpact manages business processes for companies around the world. The company combines process expertise, information technology and analytical capabilities with operation insight and experience in diverse industries to provide a wide range of services using its global delivery platform. Genpact helps companies improve the ways in which they do business by applying Six Sigma and Lean principles plus technology t continuously improve their business processes. Genpact operate service delivery centers in India, China, Hungary, Mexico, the Philippines, the Netherlands, Romania, Spain, and the United States

Fidelity National Information Services : A leading provider of core financial institution processing, card issuer and transaction processing services and outsourcing services to financial institutions and retailers worldwide. FIS has processing and technology relationships with 40 of the top 50 global banks, including nine of the top 10. Headquartered in Jacksonville, Fla., FIS maintains a strong global

presence, serving more than 13,000 financial institutions in more than 80 countries.

Sykes Enterprises : Provides Inbound Outsourced Customer Contact Management Solutions. A family of global businesses delivering business process outsourcing services, SYKES sets the standard for excellence in customer service. Whether serving a credit card customer in Denver, a healthcare patient in Toronto, or a utility customer in Budapest - SYKES brings over 30 years of service expertise to every customer interaction. 2007 revenue of $710 million. Not rated by Black Book of Outsourcing or by the IAOP, however, Sykes has a marketing presence with Bank Administrative Institute (BAI), a financial services (primarily banking) resource and research outlet.

As the global delivery system develops, and as GSS gains credibility, market share, and deep financial services industry knowledge it will assess other areas outside of the US middle-market bank segment where the ABC model will have the greatest demand. The company will continually assess the financial services industry as it executes its plan for changes in the market landscape that would necessitate a change in the strategic plan. The company will observe strategic topics of current and future trade shows, observations within industry publications, through spill-over demand driven by the company’s internet marketing, and the company’s exposure at financial services trade shows.

ii. Leading companies serving HR Services Industry

d) Competitive Factors

i. Existing Rivals

1. Infosys defines designs and delivers IT-enabled business solutions that help Global 2000 companies win in a flat world. With Infosys, clients are assured of a transparent business partner, world-class processes, speed of execution, and the power to stretch their IT budget by leveraging the Global delivery Model that Infosys pioneered. Infosys BPO seeks to leverage the benefits of service delivery globalization, process redesign and technology to drive efficiency and cost effectiveness in customer business processes. Infosys has experienced a 40.08% and 43.8% compound annual growth rate of revenues and net income respectively from 2004 to 2008.

Infosys’ business is designed to enable the company to seamlessly deliver onsite and offshore capabilities using a distributed project management methodology, which they refer to as their Global Delivery Model. The Global Delivery Model allows the company to provide clients with high quality solutions in reduced time-frames enabling them to achieve operational efficiencies.  62% of FY08 revenue was generated in North America. 35.8% of revenues were derived from the financial services industry.

Infosys Consulting offers operations and business process consulting services that leverage Infosys’ business, domain and technology expertise utilizing their Global Delivery Model. The consulting services include strategic and competitive analysis to help clients improve their business operations and create competitive advantages. Infosys also assists clients in implementing operational changes to their businesses.

The company offers consulting services in the areas of: customer operations, customer service, sales and pricing,

marketing analytics and customer relationship management; product operations, which includes research and development for

new products, supply chain transformation, and working capital efficiency; and

Corporate operations, which includes technology strategy, finance, legal and human resources operations.

in millions

Infosys 2008 2007 2006 2005 2004Revenue $4,176 $3,090 $2,152 $1,592 $1,063Pre-tax Income 1,326 936 630 491 321

30.20%

2. Accenture is a global management consulting, technology services and outsourcing company. Committed to delivering innovation, Accenture collaborates with its clients to help them become high-performance businesses and governments. With deep industry and business process expertise, broad global resources and a proven track record, Accenture can mobilize the right people, skills, and technologies to help clients improve their performance. For nearly two decades, Accenture has been working with industry leaders to develop and deliver innovations through outsourcing.

Accenture’s comprehensive portfolio of outsourcing services includes application outsourcing, infrastructure outsourcing and industry-specific and cross-industry BPO services. Accenture also offers bundled outsourcing, an innovative approach to outsourcing that consolidates multiple business functions with a single service provider. Ultimately, outsourcing enables clients to increase business performance, profitability, and competitiveness.

Accenture operates globally with one common brand and business model designed to enable them to provide clients around the world with the same high level of service. Drawing on a combination of industry expertise, functional capabilities, alliances, global resources and technology, the company delivers competitively priced; high-value services that help their clients measurably improve business performance. Their global delivery model enables the company to provide a complete end-to-end delivery capability by drawing on Accenture’s global resources to deliver high-quality, cost-effective solutions to clients under demanding timeframes.

The business is structured around five operating groups, which together comprise 17 industry groups serving clients in major industries around the world. Industry focus gives them an understanding of industry evolution, business issues and applicable technologies, enabling the company to deliver innovative solutions tailored to each client or, as appropriate, more-standardized capabilities to multiple clients.

3. Wipro is a global service provider delivering technology-driven business solutions that meet the strategic objectives of its clients. Wipro has 40+

in millions

Accenture 2008 2007 2006 2005 2004

Revenue 25,314 21,453 18,228 17,094 15,114Pre-tax Income 3,108 2,619 1,924 2,206 1,799

Profitability12.28

%12.21

%10.56

%12.91

% 11.90%

“Centers of Excellence” that create solutions around specific needs of industries. Wipro delivers unmatched business value to customers through a combination of process excellence, quality frameworks and service delivery innovation. The company provides a comprehensive range of IT services, software solutions, IT consulting, business process outsourcing (BPO) services and research and development services in the areas of hardware and software design to leading companies worldwide. They combine the business knowledge and industry expertise of their domain specialists and the technical knowledge and implementation skills of the company’s delivery team in their development centers located in India and around the world, to develop and integrate solutions which enable their clients to leverage IT for achieving their business objectives. The company uses their quality processes and global talent pool for delivering time to development advantage, cost savings and productivity improvements.

Wipro’s objective is to be a world leader in providing a comprehensive range of IT services to their clients. The markets Wipro addresses are undergoing rapid change due to the pace of developments in technology, changes in business models and changes in the sourcing strategies of clients. Wipro believes that these trends provide significant growth opportunities.

4. Cognizant is a leading provider of global IT, business process outsourcing and consulting services for Global 2000 companies located in North America, Europe and Asia. Focused on delivering strategic information technology solutions that address the complex business needs of its clients, Cognizant tailors their services to specific industries, and uses its own on-site/offshore outsourcing model to provide applications management, development, integration, and reengineering; infrastructure management; business process outsourcing; and numerous related services, such as enterprise consulting, technology architecture, program management, and change management.

According to NASSCOM (India’s National Association of Software and Services Companies), IT/BPO exports from India were an estimated $31.3 billion for the fiscal year ended March 31, 2007, with IT software and services exports growing 36% and BPO exports growing 34% in fiscal 2007. India’s IT / BPO sector is projected to grow to greater than $60 billion by 2010. In 2007, the company’s Financial Services business

in millions

Wipro 2008 2007 2006 2005 2004

Revenue197,42

8149,43

1106,10

7 81,353 58,433Pre-tax Income 35,881 32,535 23,248 18,449 11,563Profitability 18.17% 21.77% 21.91% 22.68% 19.79%

segment represented approximately 47% of their total revenues. This business segment provides services to customers operating in the following industries: Capital Markets; Banking; and Insurance.

5. Genpact manages business processes for companies around the world. The company combines process expertise, information technology expertise and analytical capabilities, together with operational insight and experience in diverse industries to provide a wide range of services using its global delivery platform. Genpact helps companies improve the ways in which they do business by continuously improving their business processes including through the application of Six Sigma and Lean principles and leveraging technology. The company strives to be a seamless extension of its clients' operations. Genpact operates more than 30 service delivery centers in India, China, Hungary, Mexico, the Philippines, the Netherlands, Romania, Spain, and the United States.

Genpact seeks to create long-term relationships with its clients where they view Genpact as an integral part of their organization and not just as a service provider. These relationships often begin with the outsourcing of discrete processes and, over time, expand to encompass multiple business processes across a broader set of functions. To achieve this goal, we the company developed the Genpact Virtual Captive SM model for service delivery, and may implement all or some of its features in any given client relationship, depending on the client's needs.

ii. Nature of Competition

in millions

Cognizant 2007 2006 2005 2004 2003Revenue 2,136 1,424 886 587 368Pre-tax Income 414 278 185 122 72Profitability 19.38% 19.52% 20.88% 20.78% 19.57%

in millions

Genpact Limited 2007 2006 2005 2004 2003

Revenue 823 613 492 429 382Pre-tax Income 82 34 11 90 85

20.98

Relative Relative Strengths Weaknesses

Infosys:

• Global Delivery Model • HQ in India which has seen recent terrorist activity

• Operate in low-cost environments

• Global delivery model has limitations of brick and mortor sites

• Size • Focus on internal performance take eye off of customer satisfaction as seen in elimination from black book of outsourcing 2008

• Diverse Service Offerings • Target large companies

• High level of repeat business• Does not offer Call Center Outsourcing

• Debt-free (extremely stable)• Customer solutions are limited to their own expertise

Accenture

• Broad global resources

• Global resources have limitations of brick and mortar sites - focus on M&A for expansion of resources

• Wide industry knowledge • Primarily target large companies, but have recently started to dip into the middle-market

• Diverse service offerings • Focus on internal performance take eye off of customer satisfaction

• Offer bundles of services to select industries

• Customer solutions are limited to their own expertise

Wipro• Does not offer HR outsourcing solution• Customer solutions are limited to their own expertise

Cognizant• Does not offer Call Center Outsourcing• Customer solutions are limited to their own expertise

Genpact • Does not offer HR Outsourcing• Customer solutions are limited to their own expertise

Advantages over Rivals

Price: The ABC model provides for pricing advantages due to the globally diverse sourcing system. As competition increases among providers, ABC will retain a pricing advantage by its ability to source suppliers.

Performance: ABC will provide its clients with true best-of-breed services. Best-of-breed providers, as specialists in their field, have primarily focused on their niche and do not offer a broad array of services. Multi-service providers struggle to provide true best practices across the service spectrum and often only do so through M&A. Through ABC’s vendor network, the company will be able to source niche, best-of-breed providers and deliver their services through a bundled delivery system.

Ease of Use: Clients will find in ABC a one stop shop service provider with the flexibility to grow as fast as they do. The types and size of services clients engage through ABC will only be limited by the clients desire to outsource. The IT interface will remain consistent for clients as services are added or changed over the client relationship lifetime. Familiarity will foster long-term relationships with integration remaining the central goal across all services.

Speed: The Company will depend upon the experience of its vendors/suppliers. The company will engage best-in-breed outsourcing providers, consultants, and implementation teams to achieve high speed-to-market for its clients.

Versatility: ABC’s vendor network will provide clients with increased versatility of sourcing and pricing options. The company will provide sourcing options from wherever it makes the most sense for its clients. Not limited to its own in-house providers, flexibility and versatility cannot be matched by any other provider. This versatility also provides ABC with a higher degree of cost control than its competitors as pricing fluctuates in response to the global economy.

Scalability: The vendor network provides the company with a greater degree of scalability than its competitors. The company can grow or contract as demand ebbs and flows. The nature of the business model allows the company to benefit from a high degree of variable costs rather than fixed.

Marketing: Through web search optimization, the company will maintain an advantage in being accessible to the market. Of the top competitors, only Accenture has demonstrated excellent web search placement. However, they do not offer call center outsourcing. Beyond Accenture, searches primarily do not result in identifying providers.

Advantages of Rivals over ABC

Price: Due to the size of the megavendors, the scalability they experience may allow pricing to dip below some of ABC’s vendors especially those vendors that are located in the same geographical areas as the megavendors. This proximity may also limit accessibility to best-in-class niche providers if megavendors reduce competition in those areas through acquisition. The company does not see this as an insurmountable advantage as demand will continue to outstrip supply which will provide opportunities for new providers. Also, if ABC becomes a customer of the niche provider prior to acquisition, the megavendor may ultimately become a ABC vendor.

Performance: Some of these competitors are best-in-breed providers in their own right even though they may not be best-in-breed across all services. They have proven track records of performance as established outsourcing providers and specific in-depth industry knowledge that provides them a leg up on experience. ABC will have

to rely on the track records of its vendors until it has a proven historical record of its delivery system.

Speed-to-market: Competitor’s history within the industry allows them to “plug in” new customers into its existing, on-going services. This is an industry-wide effort that all providers are working to improve. There advantage will remain until ABC has enough successful implementations under its belt to reduce to-market time frames. This advantage will reappear as additional services are added to ABC’s service offerings. A possible way to counteract this advantage at start-up is to engage an experienced implementation team.

Ease of Use:

Size: Competitors who provide multiple services are among the largest outsourcing providers in the industry. Their size provides brand recognition, industry clout, skills, and financial resources to remain highly competitive for the long-term through economies of scale and future acquisitions.

Versatility:

Scalability: The existing competitors are all of a size that provides them significant infrastructure for scaling up their businesses as demand grows. They also have the resources to acquire existing smaller firms to add to their delivery capabilities.

iii. Competitors

1. Cyber Infrastructure (CIS)

Profile:The company's major chunk of business comes from off-shore software development and Call Center services. They have perfected the art of off-shore services since the start of business in the year 2000. Faculties such as requirement gathering, client communication, and making water tight deliverables are now thoroughly polished and refined. The company has

State of the art infrastructure equipped with latest technology. 100+ dedicated professional's team at Indore, Europe and US

locations. Latest inventions and technologies are under testing' in our beta test

labs. Pioneers in Computer Safety and Monitoring application

developments. Experts in complex web application and solutions developments. Leading Help-Desk service provider, appreciate by best service

inspectors all over the word.

Having experts for ITO, KPO, EPO including complex Architectural, Law, Financial and Accounts, outsourcing needs.

Cyber Infrastructure believes in its core engineering strength and its ability to question the routine applications of technology concepts, to help consistently deliver cutting-edge solutions to its clients. The company believes that their Knowledge and competence is a key differentiator. The faith in expertise enables new thinking and develops new approaches to solve a given technical challenge.

CIS has a team of dedicated professionals who will be responsible for the client’s day to day needs. CIS strategy is different here from others companies. They fix responsibility of your project on one of their project managers. In this case a single person will be responsible for your work to be done with in your time limits. Through the focus on research, Innovation, and experimentation, the company develop novel and creative ideas that help envision better and superior solutions.

Products and Services:CIS "The One-Stop Outsourcing Service Provider" provides:

Customized Software Development Services. Product Development, Testing and continue support. Staffing, Dedicated Offshore Staffing solutions. Contact Center, Call Center, Help Desk services. Why will be suitable according to your needs, always with upgrades

Website: http://www.cisin.com/aboutus.htm2. International Services Outsourcing (InSO)

Profile:Company provides outsourcing services to help small and medium-sized businesses compete with larger companies on a global scale is helping American-based clients gain a competitive edge through its Business Process Outsourcing division.

InSO offers a host of integrated remote support services. These include customer care and technical support through multiple communication channels, backend transaction processing, outbound collections and telemarketing. Web based services including real-time chat among others. InSO's unique 'co-sourcing' model and 100% BPO focus has enabled them to re-engineer processes and also provide value-added services. These services vary from simple (customization of processes in keeping with the client's requirements, knowledge management) to complex (using technology to enable enhanced performance on metrics, reporting tools, middleware).

In addition to this, InSO's 'Centers of Excellence' including Transitioning and Project Management and its 'Process Improvement Team' enable a solid platform for sharing best practices. This has helped the company in

providing significant cost savings, improved productivity and quality levels and other value added services to its clients.

Service Offerings:Transaction ProcessingDocument ProcessingData Entry Outsourcing Data and Voice Management Services Financial and Accounting Services Outsourcing Web Research Outbound Call Center Services Email and Chat Support Services Verification of Information Services

Website: http://www.inso.us/ourvision.php

3. API Outsourcing, Inc.

Profile:API Outsourcing, Inc. (API) is a leading finance and accounting outsourcing (FAO) provider of back-office automation services. By transforming manual, paper-dependent document management, billing, and payable processes through proprietary imaging, printing, and workflow systems, API enables clients to outsource invoicing and other tasks to minimize the labor-intensive work associated with back-office processing. API offers flexible a la carte services with transactional pricing, or full outsourcing of back office functions. This provides clients with increased information accuracy, cost savings of 30-60%, and more time to focus on their core business. API Outsourcing currently processes millions of transactions annually and uses Six Sigma techniques for high quality, consistent service.

API’s services provide clients not only with cost savings, increased efficiency, and improved financial controls, but also environmental benefits through dramatic reductions in printing, paper usage and waste.

Services:Founded in 1998, API remains focused on the key objective of delivering services to transform manual paper-dependent activities into innovative automated processes.

API outsourced document management services include: Accounts Payable Automation Billing Automation and Invoice Management Outsourcing Electronic PO Processing On-line payment and collections Travel and Expense Reports Freight Payment Automation

Website: http://www.apifao.com/company/index.html

4. CNY Outsourcing

Profile:CNY is a locally owned and operated recruiting firm that focuses its efforts in the greater Central New York area. What sets them apart from competition is that the recruiters have a supervisory background in their respective fields. They know the skills possessed by successful employees in client’s profession or industry. They will take the time to find the right person and will communicate every step of the way making the right match.

Service:CNY place candidates on a direct hire, contract-to-hire and short-term project basis. They can also payroll referred candidates on client’s behalf. At client’s request, will conduct pre-employment drug screens, criminal background checks, skills assessments and other pre-employment testing

Website: http://www.cnyoutsourcing.com/about.html5. Oasis Outsourcing

Profile:Formed in 1996 as a subsidiary of The Wackenhut Corporation, Oasis Outsourcing is the nation's largest privately-held Professional Employer Organization (PEO) providing Human Resources, Employee Benefits, Payroll, Workers’ Compensation and Risk Management services on an outsourced basis. With annual revenue exceeding $2 billion, Oasis is a global leader in the PEO Industry. Serving over 3,000 clients and more than 80,000 worksite employees throughout the United States, the company understands all facets of human resources management. 

Products and Services:

Human Resource Services Infrastructure

Development Compliance

Assistance Operations

Partnership Growth and

Development Employee Discount

Programs

Payroll Services Preparation and

Distribution Payroll Accrual,

Tracking and Processing

Payroll Recordkeeping

Web-Based Payroll System

Employee Services Website

Employee Benefits Management Services Health and Other

Insurance Financial Savings

Plans  Administration and

Support Employee &

Legal Advocacy

Risk Management Services Return-to-Work

Programs Risk Management

and Compliance

Website: http://www.oasisadvantage.com

6. Contact America

Profile:Headquartered in La Jolla, California, Contact America is a dynamic, full capabilities call center outsourcing company specializing in inbound, outbound and e-commerce telemarketing, customer service, and CRM. Contact America maintains a state of the art computer integrated telephony system to serve a wide range of corporate, customer service, and e-commerce clients. Over the last nine years, the company has successfully managed growth without sacrificing quality or attention to detail.

Contact America is a wholly owned subsidiary of IDT Corporation (NYSE: IDT), a leading multinational carrier that provides a broad range of telecommunications services to its retail and wholesale customers worldwide. Contact America is a part of IDT Contact Services, a global, full-service, multilingual customer contact management service provider, supplying inbound, outbound, email and call center outsourcing services for businesses.

Services:Contact America is a dynamic, full service call center company. They specialize in customer acquisition, customer retention and customer care.

Call center outsourcing service capabilities include:

Direct Sales

Business-to-Business Business-to-Consumer Acquisition Launch Lead generation Surveys Market research Verification Win back

Up-sale Cross-sale New services & products to

existing customers Custom order processing Customized reports Quality Assurance

E-mail follow-up

Inbound Services Order taking and processing IVR (Interactive Voice

Response) VRU (Voice Recognition) Hot transfer Product inquires TPV (Third party verification)

Help Desk Customer service and care Pre/post sales service Level 1 and 2 Tech Support Toll free numbers

Credit card activation and up-sell

Support services Data modeling Data, sales and customer

analysis Strategic and tactical planning Defection analysis

Licensed insurance professionals

Digital recordings Data Warehousing

Fully Blended Centers

Website: http://www.contact-america.com/aboutus.html

iv. Prospective Clients (clients/customers)

1. United Community Banks, Inc.United Community Banks, Inc., the third largest bank holding company headquartered in the State of Georgia. Today they are a $8.1 billion, multi-bank holding company with banking offices located throughout north Georgia, coastal Georgia, western North Carolina, eastern Tennessee, and metro Atlanta.

Net assets $8.1BRevenue $613.9MEmployees 1,944

2. Amtrust BankHeadquartered in Cleveland, Ohio. AmTrust has grown from a local savings and loan with one office to a leader in retail banking, with branch offices in Florida, Ohio and Arizona. AmTrust proudly offers our customers customized checking, investment and small business services and is among the top 15 home loan originators in the country and also specialize in commercial construction lending.

Net assets $16.67BRevenue $1.088BEmployees 1,600

3. MB Financial BankWith $8.4 billion in assets, MB Financial, Inc. (NASDAQ: MBFI) has grown substantially over the past several years. We are the Chicago-based holding company for our lead bank, MB Financial Bank in Chicago. MB Financial Bank, N.A. provides customer-driven financial solutions to privately-held, middle-market businesses as well as to small businesses and individuals who work and live in the communities we serve. We offer a wide array of commercial and personal banking products and services as well as trust, private banking and investments through our wealth management division.

Net assets $8.4BRevenue $557MEmployees 1,282

4. Dollar BankFor 153 years, Dollar Bank has grown to become a large, full service, regional bank serving both individuals and business customers. Today, Dollar Bank operates more than 50 branch offices and loan centers throughout the Pittsburgh and Cleveland metropolitan areas.Net assetsRevenue $69.9MEmployees 1,200

5. Great Southern BankHeadquartered in Springfield, Mo., the Company operates 39 retail banking centers in 16 counties in southern, central and western Missouri, and loan production offices in St. Louis, Overland Park, Kan., and Rogers, Ark. Great

Southern offers one-stop shopping with a comprehensive line-up of financial services that give customers more choices for their money. Customers can choose from a wide variety of checking accounts, savings accounts and lending options. With the understanding that convenient access to banking services is a top priority, customers can access the bank when, where and how they prefer, whether it’s through a banking center that will have the longest banking hours in town, through an ATM, by telephone or through the Internet.

Net assets $2.5 B Revenue $95 MEmployees 750

v. Suppliers

Financial Services Call Centers HR VendorsAllstate Goldman Sachs Accenture American Express H&R Block ACSAmerican Multi-Line Insurance

Hibernia National Bank of New Orleans

EDS

Amtrak IBM ConvergysANZ Bank ING ArinsoBritish Airways Keyport Life CeridianCapital One LifeUSA ADPCharles Schwab Linksys HewittCitibank Protective Life Insurance SpherionCitigroup Merrill Lynch CitiStreetColonial Life and MetLife Exult

Accident Conseco PeopleSupport KenexaCo-Operative Bank PNC Advantec HRCredit Suisse First Boston

Prudential Financial Group Gevity HR

Principal Financial Group

Purdue University

Dreyfus Softtek EverTrust Financial Group

TPG

Fidelity Investment TSYS First Federal Savings and Loan of Osceola

Tucson Old Pueblo Credit Union

FleetBoston United Parcel Service Frost National Bank USAA Insurance GE Capital Wachovia

e) Growth Prospects

Business Process Outsourcing TrendsThe Business Process Outsourcing (BPO) used to be a mere innovative strategy for enterprises to gain cost advantage and achieve a higher level of business performance. Now, BPO is serving a much higher purpose. Companies from around the world now see it as the ultimate way to keeping and maintaining their global competitive edge; and accessing global resources to mark their global footprint.

With this shift in perception, the BPO industry is expected to grow phenomenally. During 2006, it became more apparent that it will be able to withstand protests from its detractors and reach new highs within the years to come.

The growth in BPO sector is propelled by the introduction of new service offerings as well as the increasing ability to keep up with the improvements and complexities of business processes. It is likewise driven by customers who are maturing rapidly, even in the midst of countless new vendors who are providing them with more options and greater bargaining power.

These diverse forces are shaping the course of the business process outsourcing (BPO). The succeeding trends, which are distinct yet interrelated, will influence the BPO in the years to come:

1. Move to Knowledge ServicesTraditional BPO processes in CRM, transcription, data entry and transaction processing have become commoditized with the rise in global competition and the birth of smarter customers. Despite this, the successful offshoring of a variety of knowledge services in 2006 has encouraged many new and existing players in BPO to turn their heads on the opportunities of this promising service area.

The humble beginnings in areas like financial research, risk modeling, market research, R&D, data mining, telemedicine, actuarial services, engineering services, legal services and many others have implied that investments in knowledge services (often called knowledge process outsourcing or KPO) will likely soar. This is because various new offerings in knowledge services will pan out exponentially in scope and specialization.

A new breed of third party service providers and buyers will also emerge across the world. India will still be at the pinnacle of BPO, but other locations like East Europe, China, South America, East Asia, and especially India’s most competitive rival Philippines, will become home to various new players, competing against one another not necessarily on cost but knowledge.

Consequently, buyers will go beyond cost considerations and will see offshore benefits in terms of the availability of brainpower. With increasing importance of knowledge services in the outsourcing industry, 2007 will undoubtedly see a major evolution from low-end, commoditized, process-driven services, to one where knowledge is becoming the critical factor for various BPO decisions.

2. The Rush to Scale and SpecializeDecreasing revenues due to intensifying competition and increasing demand for offshoring leads to two opposing yet complementary trends – scale and specialization. On the one hand, an increasing number of players will mark their presence by acquiring higher levels of specialization and expertise. On the flip side, more large and multi-service providers will employ a “one-stop” strategy by adding new verticals, service offerings and geographies. They will also capitalize on scale and diversity to acquire large, complex and multi-service contracts. Building specialization and scale in their chosen offering will also enable them to compete with niche providers.

Meanwhile, the awareness of higher billing rates and opportunities for differentiation in specialized services will motivate large vendors to continue pursuing acquisition targets with established niches and specialized services in order to gain presence in new segments or geographies.

3. Consolidation amidst FragmentationThe BPO industry will be tugged by opposing forces – consolidation and fragmentation. Mega deals or acquisitions will continue to gain momentum. However, there will be more small deals, primarily in the knowledge services area, as acquirers resort to small deals to obtain specialized knowledge, capabilities and customers.

Meanwhile, new firms, particularly IT service providers and consultants will be more involved in the game, as they are drawn by exciting new opportunities in offshore BPO. Replicating India’s success, competitive BPO locations like the Philippines will likewise attract new entrepreneurs because their governments are making a wide range of incentives available to them.

Also, a new breed of entrepreneurs especially professionals like lawyers, doctors, engineers and scientists will be fascinated with BPO. Minimal entry barriers, low infrastructures and set-up costs; as well as small critical size requirement will make small KPO set-ups possible.

Even the existence of high degrees of specialization and the proliferation of niches will not hinder small firms from existing profitably. So even with some degree of consolidation, the mushrooming of service providers will create further fragmentation.

In addition, the propagation of small niche players will create a large pool of acquisition targets. For these players to survive, especially the new and undifferentiated entrants will have to agree to acquisition by larger players to keep up with the higher demands of discerning customers.

The forces of fragmentation will prevail over those of consolidation, resulting to even more players in the years to come. One negative implication however is that, the vast pool of acquisition targets will lower valuation particularly for the small, undifferentiated multi-service outfits without the capacity to scale; and the intensity of price war will leave few buyers to take on their services at their desired price.

4. Offshoring Gains More MomentumOffshoring is growing robustly, fueled by buyers and vendors who are both in pursuit of global sourcing and labor arbitrage benefits. Almost all major BPO contracts will have an offshore component. This persistent need to deliver lower costs through offshoring, in turn will hasten the creation of global delivery networks.

Medium U.S. and European owned BPO enterprises, following the lead of major U.S. players are expected to increase their investments in India, Philippines, China and other competitive offshore BPO destinations.

5. Captives will become integral to the mixThere will be more offshore investments by large corporations in fully owned captive centers. This trend will be guided by two factors: the increasing sensitivity towards IPR, data security and confidentiality; and by the fact that many large corporations are seeing the viability of expanding their captive operations beyond pre-determined critical mass.

Interestingly, it is not just a matter of either pure captive or third party for buyers. Their unique company needs and risk perceptions will guide them in looking for an ideal “co-existence” model. Such complementary mix will facilitate the free flowing of best practices and cost efficiency learning between the captive and the third-party service provider.

6. Investors will loosen their pocketsBecause of the increasing maturity, growth and M&A activity, the financial community will be more enthralled in BPO. On the one hand, a great deal of BPO enterprises will achieve considerable scale, qualifying them for public listing. On the other hand, venture capitalists and private equity firms will pour in more investments, as drawn by the availability of exit, both via IPO and M&A.

Implications for Outsourcing Service Providers1. Small players will actively participate in BPO activities –

fragmentation of BPO operations is making it possible for small scale deals to gain momentum.

2. There will be much stiffer competition – as a result of fragmentation, many small-scale yet highly specialized players will emerge.

3. There will be more opportunities for offshoring – large and medium scale industries are increasing their investments in offshore outsourcing.

4. Financial community is getting into the picture – this means widening BPO market and a whole lot more opportunities for BPO service providers.

III. DEVELOPMENT AND PRODUCTION

a) Research and DevelopmentBusiness process outsourcing is becoming a standard strategy for mid-sized companies. For years, outsourcing’s singular purpose was to achieve cost savings in transaction-intensive, back-office business functions. Today, BPO has emerged as a flexible and powerful alternative that business leaders can use to achieve a wide range of more strategic goals: Drive Corporate Value - craft an outsourcing relationship

that specifically meets the corporation’s needs, gaining access to technology and unique expertise immediately, at a fraction of the cost and time required to bring in-house.

Competitive Superiority – transform average business processes into world-class capabilities, increasing business disciplines through standardization, centralization, and new technology.

Simplified Operations Management – improve information flow to management, while streamlining the numerous business processes into a more efficient few.

Renewed Investment in the Core Business – lower recurring costs significantly, redirecting savings to more strategic aims.

Guaranteed data integrity – meet regulatory requirements to guarantee the integrity of employee data.

Reduced Capital Expenditures – Convert upcoming, planned capital expenditures to period operating expenses.

Revived Management Focus – redirect management time toward strategic initiatives that focus on the real profit drivers of a company, outsourcing repetitive operational processes.

Managed Growth – handle business fluctuations, support acquisitions and divestitures, stimulating company growth by achieving unique, competitive capabilities.

Accelerated Time to Market – launch new businesses, fully operational with state-of-the-art capabilities in weeks rather than months.

Improved Integration – reduce the number of outsourcing vendors, asking a single provider to handle multiple processes, simplifying relationships and improving integration.

Enhanced Efficiencies – share service centers, extending the operational boundaries of the company to utilize less expensive labor and increase efficiencies.

Improved Service Levels– accelerate technology roll out, beyond what any company could achieve by itself. Outsourcing applications that run on the Web offers the benefits of self-service processes for customers, vendors, and employees.

Human Resources: A Prime Candidate for OutsourcingWhen the various functions within the organization are evaluated as candidates for outsourcing, many critical, non-core functions seem to be viable alternatives. Yet studies show that many firms are focusing on outsourcing human resources functions as their primary initiative.

Human Resources Business Process Outsourcing (HR BPO) is a logical extension of the trend toward outsourcing and the inclination of companies to delegate individual functions. In HR BPO, the company outsources complete responsibility for an integrated set of functions such as Benefits Administration, Payroll Management and general Human Resources Administration to a third party.

In deciding to outsource HR functions, most companies choose to outsource the tactical, transaction-related activities while keeping strategic functions in-house. These tactical activities include functions such as payroll processing, human resources administration (adding and terminating employees and the like) and benefits administration. These functions affect the performance of virtually every part of the company and consume a tremendous amount of the HR department’s time and energy.

Many companies report that these transaction oriented tasks require more than 80% of the HR staff’s time. Likewise, implementing the systems to support these functions is complicated, time-consuming and expensive. Once implemented, maintaining HRIS systems over their expected life cycle can approach or exceed the cost of the original implementation. This ongoing investment translates directly into the first compelling argument for HR BPO: most companies can achieve immediate, significant cost savings compared with the processes they’re employing now.

North American Contact Centre outsourcing - continues to growThe North American contact center outsourcing market continues to see impressive growth. This is especially true given the strategic, financial and technological factors fueling the thirst for outsourced contact center services. Organizations today are increasingly looking to focus on core competencies, while also striving to improve service quality by building brand equity and loyalty through exceptional customer interactions

The U.S. economic climate, coupled with greater acceptance of call center outsourcing across business verticals, will give rise to promising market growth in the future. Outsourcing firms must contain cost, improve agent efficiencies and deliver high-quality interactions in order to remain competitive in this market. Outsourcing has been a way for companies to subcontract business functions that are outside of their core competency and can be done at a lower cost. This movement is fueled by industry participants' ability to use a mix of on-shore, near-shore, and offshore facilities to provide continuous, round-the-clock coverage for their clients in every corner of the world.

However, the most evident challenge in call centers today is one of complexity. Frost & Sullivan believes that there are a myriad of factors that have contributed to this in blended inbound and outbound call centers. While increasingly diverse and complex products and services are now being offered, there is also sharp increase in consumer demand for speed and multi-channel media touches.

"In this highly competitive market, organizations are looking to drive process improvements by moving the needle on service quality to enhance brand equity," says Frost & Sullivan Strategic Analyst Michael DeSalles. "Meeting end-

user demand for quality and speed in a multi-channel environment is a challenge for even the most experienced outsourcers."

The real market opportunity lies in gaining more wallet share from existing client engagements and from prospects that operate in-house contact centers. Providers looking to add new logos to their client list must address all aspects of risk mitigation in order to attract these potential customers. In some cases, it could mean an internal re-design of the sales and service delivery channel to align more closely with the client's objectives and goals. New clients are looking for industry-centric solutions from providers that have a history of measurable results.

Typical Mid-Market HR BPO ServicesAdministrative Services• Comprehensive Payroll• HR Management• Benefits Administration• Workers’ Compensation Administration

HR Technology• Comprehensive HRIS applications, extended to Web• Technology Hosting Services• Application and Technology Management Services

HR Professional Support• HR BPO Transition Services• HR Operational Service Centers

b) Production RequirementsManaging a bundled outsourcing relationship requires additional skills and strategies. Two are particularly important: establishing a new, enterprise governance model; and creating a supplier portfolio strategy based on a future-looking orientation.

Enterprise governanceBundled outsourcing requires a more effective enterprise-level governance model—one that supports more effective management across business functions and that produces more value by eliminating redundancy and by helping different parts of the organization work together more efficiently. In our experience, the most successful enterprise governance model involves creating a dedicated organization or outsourcing center of excellence. Rather than focusing on each individual outsourcing relationship, such a center provides higher-level guidance and skills in such areas as negotiations, transition, solution design, supplier relationship management, compliance and change management.

Enterprise governance can provide valuable oversight in such areas as developing standard contractual terms,

facilitating risk assessments, reporting overall outsourcing performance and shaping the supplier portfolio. Experienced bundlers will tell you the importance of beginning as early as possible to establish and manage a Center of Excellence. An enterprise governance organization can take several years to reach optimal effectiveness, so it is best to work on establishing the organization before the volume of outsourcing agreements gets too high.

It's also important to use strong sponsorship and communications strategies to help the rest of the organization accept the new ways of working under an enterprise governance model. Appoint a well-respected and highly visible champion with cross organizational credibility.

Supplier portfolio strategiesUnderstanding some of the synergies that occur in bundled outsourcing can help organizations choose the right supplier—one capable of maximizing the value of those synergies. For example, finance and accounting (F&A) outsourcing gains increased power through its close ties with other processes such as supply chain, payroll and customer support. So a provider with experience in multiple IT systems touching those areas will be critical to success over time. Similarly, a great deal of the cost reduction potential in HR outsourcing comes from improved procurement capabilities in areas such as recruiting and benefits. And an HR outsourcing provider that also has deep skills in enterprise learning outsourcing can help an organization deliver increased performance across the entire talent management lifecycle.

For outsourcing arrangements that begin from a bundled perspective, the need for a provider with broad experience will be obvious. But it is equally important, when beginning a single-function outsourcing arrangement, to have one eye on the present and the other eye on the future. It's important to consider from the start a provider's capacity and capability to expand scope into additional functions. A provider that cannot scale up, or that cannot capture horizontal synergies between functions, will be a constraint on future value.

While HRO providers may seem to offer little that is different between them, differences do occur in their size, culture, HRO methodology and track record. However, they offer their services in three distinct ways.• Single-service or transactional solutions for a particular HR activity.• Multiple HR services as part of a large-scale deal.

• Transformational deals which radically change the purpose and role of HR.

Three different types of providers are active in the HRO market - pure HRO specialists, business/HR transformation firms and HR process technology suppliers.

c) Productions Process

Many large corporations outsource discrete, non-core functions of their operations, such as payroll, tax filings, and benefits administration.

The market for multi-process HR outsourcing is relatively new. It is estimated that approximately 300 of the Global 500 are viable candidates for HR outsourcing. Based on the median employee base and estimates of annual spending per employee for various services, we estimate that the addressable market basic HR outsourcing consists of annual spending of approximately $29 billion per year.

Comprehensive HR process outsourcing for large corporations requires a well-developed service delivery infrastructure and significant expertise in analyzing, providing, and managing HR processes across many

divisions and third-party vendors. It also necessitates policies, procedures, operations, and technologies that yield superior performance as measured by productivity, cost, quality, and customer satisfaction metrics.

d) Quality Assurance/Quality Control

For the past five or six years, there has been increasing desire within contact centers to improve upon customer satisfaction and experience, in order to keep customers loyal and profitable for longer. Recent ContactBabel studies have shown that increasing customer satisfaction is consistently the no.1 focus of UK contact centers, outperforming other key areas such as decreasing costs or increasing sales, and the US report shows a growing desire to improve customer satisfaction as well.

Call recording and monitoring may have been around for a long time, but it is at the forefront of the battle to improve quality and thus customer satisfaction and loyalty. Sophisticated call recording solutions have the tools within them to recognize patterns and anomalies, allowing management to identify the issues that are impacting customer service, and to deal with them at an agent or process level. Such recording solutions record every call that comes in and analyzes them on an agent- o subject level to identify areas for immediate action, such as whether it is a training issue, a process issue or a product issue.

This real-time analysis, and of course, the actions leading from it, can mean that customers' hold time and call time is shorter because of the increased agent efficiency, and customers call less often about processes that have been fixed as a result of the new system, with agent performance improving as well due to the identification of training needs.

Effectively, the call recording and analytics can act as an exceptionally well-informed and alert team leader who can oversee the entire operation instantaneously, which is vital, as supervisors are struggling under the mass of tasks they have and need something to keep them organized, and contact centers need something to monitor the supervisors and of course, prove compliance.

Quality assurance methodsScripting is used the most often within the outsourcing sector, where much of the work will be outbound sales, and

because the agent needs to portray and support the client’s brand values, detailed guidance in how to converse with the customer may be felt to be needed. Call monitoring (listening-in) is used almost everywhere – except with healthcare respondents - with call recording and customer surveys also being very popular.

e) Contingency Plans

Possible causes of failure in outsourcing:

IV. FINANCIAL DATA

a) Financial Projections

INCOME STATEMENT 2009 2010 2011 2012 2013Revenue: Outsourcing Revenue

Call Center 58,000.001,098,375.0

0 3,458,250.00 4,149,900.00 4,772,385.00

HR 214,666.674,065,250.0

0 12,799,500.00 15,359,400.00 17,663,310.00

Total Outsourcing Revenue 272,666.675,163,625.0

0 16,257,750.00 19,509,300.00 22,435,695.00          

TOTAL REVENUE 272,666.675,163,625.0

0 16,257,750.00 19,509,300.00 22,435,695.00COGS:           Outsourcing Vendors           Call Center 43,500.00 823,781.25 2,593,687.50 3,112,425.00 3,579,288.75

HR 161,000.003,048,937.5

0 9,599,625.00 11,519,550.00 13,247,482.50

Total - COGS 204,500.003,872,718.7

5 12,193,312.50 14,631,975.00 16,826,771.25          

GROSS PROFIT 68,166.671,290,906.2

5 4,064,437.50 4,877,325.00 5,608,923.75Expenses:           Depreciation and Amortization 58,333.33 56,666.67 38,333.33 20,000.00 20,000.00 Salary Expense 426,666.67 666,660.67 958,525.09 999,634.01 1,042,645.69 Payroll Expenses 24,550.00 41,799.64 59,311.51 61,868.04 64,543.24 Virtual Assistants 15,010.00 24,000.00 24,000.00 24,000.00 24,000.00 IT Hardware/Software 129,000.00 173,750.00 107,781.25 112,114.84 116,773.46 IT Outsourcing 27,200.00 40,800.00 40,800.00 40,800.00 40,800.00 Website Dev./Maintenance 6,000.00 6,000.00 6,000.00 6,000.00 6,000.00 Marketing 367,383.33 378,181.25 812,887.50 975,465.00 1,121,784.75 Telephone 5,000.00 6,000.00 6,000.00 6,600.00 7,260.00 Telephone - Cell 4,000.00 6,000.00 6,000.00 6,600.00 7,260.00 Rent and Utilities 13,400.00 30,000.00 72,000.00 79,200.00 87,120.00 Administrative Expense 34,950.00 38,400.00 17,400.00 18,090.00 18,814.50 Insurance 50,354.17 70,666.52 77,963.13 78,990.85 80,066.14 Professional Fees - Legal 7,500.00 6,000.00 6,000.00 6,000.00 6,000.00 Professional Fees - Accounting 2,750.00 3,000.00 3,000.00 3,000.00 3,000.00 Miscellaneous 0.00 6,000.00 6,000.00 6,300.00 6,615.00

Total Expenses 1,172,097.501,553,924.7

4 2,242,001.81 2,444,662.75 2,652,682.78          

Income Before Tax -1,103,930.83 -263,018.49 1,822,435.69 2,432,662.25 2,956,240.97Income Tax (38%) 0.00 0.00 692,525.56 924,411.66 1,123,371.57NET INCOME -1,103,930.83 -263,018.49 1,129,910.13 1,508,250.60 1,832,869.40

BALANCE SHEET as on 31st Dec 2009 2010 2011 2012 2013

ASSETS Cash and Cash Equivalents 154,355.07 302,242.32 583,315.12 1,837,491.63 3,443,829.78Accounts Receivables 22,722.22 430,302.08 1,354,812.50 1,625,775.00 1,869,641.25 Total Current Assets 177,077.29 732,544.41 1,938,127.62 3,463,266.63 5,313,471.03 Loans Investments Total Other Assets 0.00 0.00 0.00 0.00 0.00 Fixed Assets 66,666.67 30,000.00 11,666.67 11,666.67 11,666.67

TOTAL ASSETS 243,743.96 762,544.41 1,949,794.29 3,474,933.30 5,325,137.70

LIABILITIES & EQUITY Accounts Payable 97,674.79 129,493.73 186,833.48 203,721.90 221,056.90Short term loans Total Current Liabilities 97,674.79 129,493.73 186,833.48 203,721.90 221,056.90 Notes Payable Long term loans TOTAL LIABILITIES 97,674.79 129,493.73 186,833.48 203,721.90 221,056.90 Shareholders Equity Capital 1,250,000.00 2,000,000.00 2,000,000.00 2,000,000.00 2,000,000.00

Retained Earnings-

1,103,930.83-

1,366,949.32 -237,039.20 1,271,211.40 3,104,080.80Total Shareholders Equity 146,069.17 633,050.68 1,762,960.80 3,271,211.40 5,104,080.80 TOTAL LIABILITIES and SHAREHOLDERS EQUITY

243,743.96 762,544.41 1,949,794.29 3,474,933.30 5,325,137.70

Cash Flow Statement 2009 2010 2011 2012 2013Operating Activities Net Income -1,103,930.83 -263,018.49 1,129,910.13 1,508,250.60 1,832,869.40Depreciation & Amortization 58,333.33 56,666.67 38,333.33 20,000.00 20,000.00Changes in current Assets Accounts Receivable -22,722.22 -407,579.86 -924,510.42 -270,962.50 -243,866.25Changes in current Liabilities Accounts Payable 97,674.79 31,818.94 57,339.76 16,888.41 17,335.00 Operating Cash Flow -970,644.93 -582,112.75 301,072.80 1,274,176.51 1,626,338.15 Investing Activities CAPEX 125,000.00 20,000.00 20,000.00 20,000.00 20,000.00 Investing Cash Flow 125,000.00 20,000.00 20,000.00 20,000.00 20,000.00 Financing Activities Issuance of Shares 1,250,000.00 750,000.00 0.00 0.00 0.00Long term Loan Financing Cash Flow 1,250,000.00 750,000.00 0.00 0.00 0.00 Change in the Cash Position 154,355.07 147,887.25 281,072.80 1,254,176.51 1,606,338.15Beginning Cash 0.00 154,355.07 302,242.32 583,315.12 1,837,491.63 Ending Cash 154,355.07 302,242.32 583,315.12 1,837,491.63 3,443,829.78

b) Financial Ratios

Parameters 2009 2010 2011 2012 2013  Profitability Ratio          Gross Margin 25.00% 25.00% 25.00% 25.00% 25.00%EBITDA Margin -383.47% -4.00% 11.45% 12.57% 13.27%EBT Margin -404.86% -5.09% 11.21% 12.47% 13.18%Net Profit Margin -404.86% -5.09% 6.95% 7.73% 8.17%Return on Assets -452.91% -34.49% 57.95% 43.40% 34.42%Return on Equity -755.76% -41.55% 64.09% 46.11% 35.91%Return on Capital Employed -755.76% -41.55% 103.37% 74.37% 57.92% Solvency Ratio Current Ratio 1.81 5.66 10.37 17.00 24.04Quick Ratio 1.58 2.33 3.12 9.02 15.58Working Capital ($ ‘000) 79.40 603.05 1,751.29 3,259.54 5,092.41  

Comparison - Revenue and Net Income

(5,000.00) 0.00 5,000.00 10,000.00 15,000.00 20,000.00 25,000.00

2009

2010

2011

2012

2013

Year

in USD ('000)

Net Income

Total Revenue

c) Analysis

Total Revenue: The company expects to generate nominal revenue during 2009, with a gradually increases in 2010. The company becomes more stable in 2011 with a three fold revenues as compared to 2010. Post 2011, the company expects a gradual growth of 10 to 20% in the coming years.

Total Revenue - Comparitive Analysis

0.00

2,000.00

4,000.00

6,000.00

8,000.00

10,000.00

12,000.00

14,000.00

16,000.00

2009 2010 2011 2012 2013

Year

in U

SD ('

000)

Revenue Breakdown:The company expects to generate 70% of the revenues from HR outsourcing and 30% from call centre outsourcing.

0.00

6.00

12.00

18.00

24.00

in U

SD

mill

ion

2009 2010 2011 2012 2013

Call Center HR

Compounded Annual Growth Rate (CAGR)

The CAGR of the Company is expected to be 201.18%. This is mainly because of the jump in revenues during the initial period (2009 -2011).

Year Sales Yr-to-Yr Growth

2009 272.67 2010 5,163.63 1793.75%2011 16,257.75 214.85%2012 19,509.30 20.00%2013 22,435.70 15.00%

CAGR 201.18%

Profit ComparisonAlthough, the company is expected to make a loss in the initial period, the year on year growth in the profits depicts a positive trend. The company once earns stability in 2011, the profit margins are good, with Net Margin ranging between 6% to 9% and EBITDA margin from 11% to 14%.

Comparison of Profits

(2,000.00)

(1,000.00)

0.00

1,000.00

2,000.00

3,000.00

4,000.00

5,000.00

6,000.00

2009 2010 2011 2012 2013

Year

in U

SD ('

000)

Gross ProfitEBITDANet Income

Cash Flow

The company has enough cash to meet its obligations post 2011, whereas initially the company has negative cash flow due to set up costs and initial expenses for the startup. The company can look for investments after 2011 to earn heavy returns.

Cash Flow from Operations

(1,400.00)

(700.00)

0.00

700.00

1,400.00

2,100.00

2009 2010 2011 2012 2013

Year

in U

SD ('

000)

V. ORGANIZATION AND MANAGEMENT

a) Organization Chart

b) Management Team

Key Personnel

Top Management1. David Boudreaux, President2. Sunil Kurapati, Vice-President IT 3. Craig DiCecco, Vice-President Operations Vendor and Client

Other Personnel

Advisory Board Members:1. Allan Martin2. Russ Hunt3. Gordon Babbitt

David Boudreaux

President

TBD

Vice-PresidentFinance

Sunil Kurapati

Vice-PresidentInformation Technology

Craig DiCecco

Vice-PresidentSales

Marketing

Outsourced to The Delve

Group

TBD

Vice-President OperationsVendor &

Client