1. 2009. Copyright Tholons Inc. All rights reserved. Advisory Investments Research Jonathan De Luzuriaga Managing Director January 2010 Version 1.0 Country Assessment Framework

2. Page 2 Looking at Fresh Options Why are clients seeking new geographies? Why will existing solution not be enough in the new decade? Closer to Customer New Generation of Services Specialized Skill Requirement Established Locations inhibited by Talent Saturation Localization Integration of new countries into the Global Economy (Example: Brazil, South Africa, China) Customer Demand becoming more Sophisticated Evolving and Developing ProcessesNew Customer Segments 3. Page 3 Key Question: Where should we locate? What proportion of a citys talent is EMPLOYABLE in the outsourcing and offshoring (O&O) industry? What PROCESS is most suitable for the employable talent available in a city? Which location can yield maximum COST BENEFIT and most EFFECTIVE OPERATIONS OUTSOURCING DESTINATION providing Best TALENT Best COST STRUCTURE & MINIMUM RISK for SPECIFIC OUTSOURCING REQUIREMENTS Employability Complexity Handling Capability Cost Vs. Effectiveness Outsourcing Destination Outsourcing Destination 4. Page 4 Parameters influencing selection: Process Requirements and Geographical & Operational Delivery Models 5. Page 5 One destination, Various Perspectives Buyers / Clients LOCATION Service Providers Government & Policy Makers Cost Advantage Cultural Affinity Near Shore / Time Zone IP Laws and Risk Factors Client Potential Infrastructure Scalability Government Support Foreign Investments Export Revenues Economic Progress Employment Generation Each destination is viewed differently by the various stakeholders, leading to different: Judgments Perceptions Decisions 6. Page 6 Tholons Location Assessment Framework Scale & Quality Labor Pool Skills Availability Graduate Output Complexity Cost Business Catalyst Infrastructure Risk Profile Quality of Life Cost of Operations Cost of Training Cost of Real Estate Cost of Bandwidth Cost of Living Cost of other Infrastructure Connectivity Bandwidth Availability Transportation Commercial Risk Political Risk Natural Risk Social Risk Social Infrastructure like Education Institutions, hospitals etc. Non Work Culture Availability of Recreation/Leisure facilities Government Benefits/Incentives Competitive Landscape Untapped Labor Pool Currently Employed Skills and Scalability Savings Business Environment Operational Environment Risk to Business Non-Business Environment Each city has unique dynamics and capabilities to offer to the Services Globalization Industry, the Tholons Location Assessment Framework acknowledges and helps identify that 7. Page 7 Top voice based contact center destination, has been unable to evolve towards non-voice/IT services Top voice based contact center destination, has been unable to evolve towards non-voice/IT servicesThe Global Leader, but increasing competition and rising demand-supply gap in talent pool The powerhouse of the MERCOSUR with an attractive domestic market Huge scale and very competitive cost; however, English has proved to be a huge constraint on growth potential Top 5 Offshore Nations Philippines Most culturally aligned and offers high productivity, facing stagnancy due to high cost India ChinaIreland Brazil 8. Page 8 Nearest destination with perfect cultural alignment to US; minimal cost advantage Nearest destination with perfect cultural alignment to US; minimal cost advantage Multilingual near-shore targeting to US Hispanic market, has taken a bite from Canadas market share R&D center of the world with abundant skill availability Lowest cost destination in the world, however, struggling in evolving towards high-value ITO services Offers scalable and sustainable talent pool among its competition with the smaller countries in EE Next 5 Offshore Nations Canada Mexico Russia Poland Vietnam 9. Page 9 Emerged: With Scalability and Cost Advantage City Country Rank 2008 Rank 2009 Bangalore India Top 8 Top 8 Delhi NCR India Top 8 Top 8 Mumbai India Top 8 Top 8 Manila NCR Philippines Top 8 Top 8 Dublin Ireland Top 8 Top 8 Chennai India Top 8 Top 8 Hyderabad India Top 8 Top 8 Pune India Top 8 Top 8 Due to the global recession, the Top 50 list has seen minimal movements. While the emerged locations have retained their positions, emerging locations have undergone consolidation with sustainable advantage being the theme for differentiation. Indian cities service delivery maturity and cost-effectiveness bolster its position as a leading outsourcing location. Dublin as an early entrant in Europe with its skills availability and nearshore proposition Manila, as well as the leading cities in India, maintain their leverage by capitalizing on the labor pools language skills and scalability 10. Page 10 Contact Jonathan De Luzuriaga Managing Director jonathan@tholons.com Asia Offices Europe Office Asmec Centre Eagle House, Bracknell Berkshire RG12 1HB, UK Phone: +44-1628-566140 India Office 2/10, 2nd Floor, 80 Ft Road RMV Extension Stage II Bangalore 560 094, India Phone: +91-80-23519760 Philippines Office Unit 803, Richmonde Plaza 21 San Miguel Ave., Ortigas Center Pasig City, Philippines Phone: +63-2-635-9236 North America Office 5 Penn Plaza, 23rd Floor New York, NY 10001 Phone: +1-646-290-9320 Fax: +1-646-349-3546