The State of Service

1
The State of Service Support in China

• Presented by
• Dr. Baumin Lee
• President, Teleweb Inc.
• April 27, 2005

2
Bio Dr. Baumin Lee

• China MII CRM Committee
  Deputy Director
• MII Federation of Informationization Promotion
  Expert Consultant
• China Academy of Labor and Social Security
  Chief Auditor
• MII Call Center Professional Jon Standard Commi
  Expert
• Taiwan Call Center Development Association
  Director
• 1998-present Teleweb Inc.
  CIO
• 2002-present Shanghai Teleweb Technology
  President
• 1998-2005 05Info Inc.
  CTO
• 1996,iPlanet Inc.
  Technical Director
• 1997-1998,Tandem Corp. Technical Manager
• 1988-1995 Bell Labs
  MTS
• 1983-1987, National Regulatory Research
• Institute
  
  Research Associate
• The Ohio State University, ISE Department
  P.HD.
• The Ohio State University Adjunct
  Professor

3
OUTLINE

• Technical Support and Help Desk Outsourcing
  Market
• The Peoples Republic of China
• China Call Center Market Status
• China Call Center/Technical Support Challenges
• Trend in Call Center Technology
• China SCP Experience
• Characteristics of China Support Centers
• China support Centers SWOT Analysis
• Leading China Outsourcing Call Center 95Teleweb
  Inc. Introduction

4
Technical Support and Help Desk Outsourcing Market
Dollars in Billion
2002
2007
International Data Corporation (IDC) predicts
that the compounded annual growth rate (CAGR) for
help desk outsourcing over the next five years
will be 11.2. According to IDC, the market for
technical support and help desk business process
outsourcing is expected to grow from 14.0
billion in 2002 to 21.5 billion in 2007.
Source Gartner Dataquest
5
Technical Support and Help Desk Outsourcing Market
2002 2003 2004 2005 2006 2007
Source IDC 12/2002
6
Business Process Outsourcing Market
2000
2005
Gartners most recent projection for the
worldwide BPO market predicted a 234 billion
opportunity by 2005, with the market growing at a
compound annual growth rate of 14 between 2000
and 2005.
Source Gartner Dataquest
7
Market for Offshore Outsourcing
3.3 million jobs to go offshore Over the next 13
years, 3.3 million U.S. service industry jobs and
136 billion in wages will move offshore to
countries like India, Russia, China, and the
Philippines. The IT industry will lead the
initial overseas exodus.
Source 2002 Forrester Research, Inc.
8
OUTLINE

• Technical Support and Help Desk Outsourcing
  Market
• The Peoples Republic of China
• China Call Center Market Status
• China Call Center/Technical Support Challenges
• Trend in Call Center Technology
• China SCP Experience
• Characteristics of China Support Centers
• China support Centers SWOT Analysis
• Leading China Outsourcing Call Center 95Teleweb
  Inc. Introduction

9
THE PEOPLES REPUBLIC OF CHINA

• Population of 1.3 billion people in 2004,
  expected to grow to 1.5 billion in 2020
• 3.7 million square miles 22 provinces, 3
  municipalities, and 5 autonomous regions
• Socialist Market Economy in 1976
• One Country, Two Systems
• Tiananmen Square in 1989
• GDP grew 8 and export grew 12 annually in 1978
  1992
• WTO in 2002 and Olympics in 2008, World Trade
  Show 2010
• Open door policy to keep economic
• development on track

10
China Political, Economic, and Social Environment

• Political Environment
• economic system reform and establishment of
  socialist market economic system
• Government Service Department have all
  established service-type call center,
• and this becomes a powerful growth field of
  Chinas call center industry
• the political environment of China has been
  gradually improved

• Economic Environment
• China has maintained an annual increase rate of
  9, Estimated by experts,
• The contribution of Chinas economic growth to
  the world GDP is 14, only
• after U.S. (20.7)
• The financial revenue of the whole country has
  reached 2.17 trillion Yuan with an
• increase of 278.7 billion Yuan than that of
  last year
• The 2008 Beijing Olympics and 2010 Shanghai World
  Fair will continuously
• promote the development of Chinas economy

• Social Environment
• China is a society that values human relations
  and face-to-face communication.
• The concept of conducting business activities by
  phone hasnt been broadly
• accepted.
• The service style of call center strengthens the
  customer relationship
• and is expanding its social foundation in China
• The call center for tele-shopping and e-commerce
  still lacks support from direct users
• The social and individual credit system of China
  hasnt established at present..

11
China IT Software Industry

• Chinas mobile phone market has overtaken the US
  and is now the biggest in the world with more
  than 190 million subscribers at the end of 2003.
• China is planning to spend more than 120 billion
  over the next five years developing its telecom
  and IT industries.
• The number of Internet users in China at the end
  of 2003 has reached 85 million and will be 150
  million by 2005. Now China is the worlds
  second-largest Internet user base.
• China software market is expected to achieve a
  compound growth rate (CAGR) of 36.9, reaching
  US7.7 billion in 2006.
• ERP applications will grow at a CAGR of 32 to
  reach US3.6 billion by 2005. The CRM market is
  expected to grow at a CAGR of 37, to reach
  US2.7 billion by 2005.

12
OUTLINE

• Technical Support and Help Desk Outsourcing
  Market
• The Peoples Republic of China
• China Call Center Market Status
• China Call Center/Technical Support Challenges
• Trend in Call Center Technology
• China SCP Experience
• Characteristics of China Support Centers
• China support Centers SWOT Analysis
• Leading China Outsourcing Call Center 95Teleweb
  Inc. Introduction

13
China Call Center Industry Snapshot

• 125,900 call center seats
• Compound annual growth rate gt16
• Industry value estimate US2.1 billion
• 60 have been operating for lt4 years
• Non services call centers lt 20
• Outsourcing call centers lt 16
• Average CSR salary US3500
• Annual loaded salary less than US4000 gt88
• Call Center consulting and training market
  gtUS500M

14
China Vs. Worldwide Call Center Industry
Infrastructure
100
14.37
Outsourcing, Consulting training
73
80
60
85.63
40
System Integration
20
27
0
Global
China
SourceCTIForum
15
Market Engineering Seats Forecasts for the China
Call Center Services Market
Source CTIForum 2004
16
Market Drivers
Rank Driver 1 Year 2-3 Years 4-5 Years
1 Reduction in telephone service tariff High Medium Low
2 Explosive growth in the telecom services market High Medium Low
3 Establishment of call centers by banking, and finance industries Medium Medium Low
4 Increasing intensity of competition drives need to improve customer service Medium Medium High
5 Reduction in call center equipment costs drive demand Medium Medium Low
Source Frost Sullivan
17
Market Restraints
China Call Center Market Market Restraints
Ranked in Order of Impact, 2001-2005
Rank Restraints 1 Year 2-3 Years 4-5 Years
1 Cost issues deter potential customers High Medium Low
2 Companies need to prepare their business for Call Center implementation Medium Medium Low
3 Failure to show economic return Medium Medium Low
Source Frost Sullivan
18
OUTLINE

• Technical Support and Help Desk Outsourcing
  Market
• The Peoples Republic of China
• China Call Center Market Status
• China Call Center/Technical Support Challenges
• Trend in Call Center Technology
• China SCP Experience
• Characteristics of China Support Centers
• China support Centers SWOT Analysis
• Leading China Outsourcing Call Center 95Teleweb
  Inc. Introduction

19
Trends in China Service Center

• Market is still relatively immature
• China Service Centers tend to be small
• China Service Centers not always tightly managed
• Customer service most common business functions
• Major technology Gaps
• Majority are planning to upgrade their Technology
• Low uptake of external QA programs
• Outsourcing is fastest growing sector
• Major issues with accessibility of skilled HR
  resources

20
What Are the Challenges

• Lack of resources/industry know-how on technology
  and people management
• Price competition on system integrators and
  outsourcing call centers
• The doubtful effects for call center consulting
• The traditional concepts from high level
  management. Call Center managers have
  difficulties on high quality people hiring,
  training, applying advanced technology, etc.
• Internal Process is too long to kick off projects

21
OUTLINE

• Technical Support and Help Desk Outsourcing
  Market
• The Peoples Republic of China
• China Call Center Market Status
• China Call Center/Technical Support Challenges
• Trend in Call Center Technology
• China SCP Experience
• Characteristics of China Support Centers
• China support Centers SWOT Analysis
• Leading China Outsourcing Call Center 95Teleweb
  Inc. Introduction

22
Trends in Call Center/Technical Support Technology

• Multi-Media Contact Center
• IP Call Center
• Voice Web Portal (Self-Services)
• Knowledge Workers
• Integrated Contact Centers Across Companies
  Cross Border

23
Channels of Customer Contact are Expanding
24
Existing Technology
Philippines
Singapore

ACD 67 48 78 81 68 82 67 70
IVR 28 33 73 35 51 35 46 43
CTI 26 28 49 18 28 22 26 28
Customer Contact/CRM Software 42 33 68 43 45 43 47 46
Workforce Management 18 10 26 17 19 18 18 18
Speech Recognition 1 2 14 0 8 4 0 4
Call Recording 15 30 50 35 49 37 28 35
Voice Data Recording Quality Monitoring 5 0 51 4 7 7 4 11
IP Telephony 5 2 24 1 16 1 1 7
Predictive Dialer 6 7 29 2 21 6 6 11
E-learning system 6 0 30 10 11 5 6 10
Malaysia
All Asia Countries
Thailand
HK
India
China
Source callcenters.net 2003
25
Equipment Enhancement Plan
China HK India Malaysia Philippines Singapore Thailand All Asian Countries Combined
ACD 21 6 34 11 28 18 31 21
IVR 16 10 42 8 35 18 25 22
CTI 16 8 31 9 9 8 16 14
26
CRM, WFM, and PD Enhancement Plan
China HK India Malaysia Philippines Singapore Thailand All Asian Countries Combined
CRM 14 12 33 8 15 26 22 18
WFM 6 4 22 3 18 6 12 10
PD 7 4 22 2 4 4 6 7
27
VoIP and Speech Recognition Enhancement Plan
China HK India Malaysia Philippines Singapore Thailand All Asian Countries Combined
VoIP 3 2 16 2 4 6 5 5
SRS 3 1 19 2 4 10 5 6
28
Decision Making
China HK India Malaysia Philippines Singapore Thailand All Asian Countries Combined
Call Center Manager 38 64 18 30 53 29 28 46
Finance manager/Director 7 15 9 19 6 4 6 19
Marketing Manager 4 7 20 14 0 8 2 11
IT Manager 7 5 20 12 13 24 5 15
Special Project Team 1 1 9 2 6 24 2 6
Senior Manager 31 11 19 18 23 14 53 25
29
Call Center Issues Faced in Next 12 Months
China HK India Malaysia Philippines Singapore Thailand All Asian Countries Combined
Agents lack of skills 5 0 5 1 0 8 17 5
Budget/high expenses 2 4 3 15 4 18 7 7
Technology/System Issues 13 7 11 7 11 12 22 12
Competition client retention 5 3 11 3 4 2 6 5
Customer Dissatisfaction 2 1 5 12 4 10 6 5
Insufficient Employees 9 11 0 3 0 5 12 7
Turnover Rate 1 1 11 4 6 14 2 5
30
Current China Service Center Operations Issues

• Labour shortage
• Staff Motivation and Training
• Managing Growth and System integration
• Need to demonstrate ROI
• Sunk Costs restraining purchases
• Lack of management skills/experiences
• Poor technology/system issues
• Standardized operation procedures
• CRM implementation
• Language Capabilities

31
OUTLINE

• Technical Support and Help Desk Outsourcing
  Market
• The Peoples Republic of China
• China Call Center Market Status
• China Call Center/Technical Support Challenges
• Trend in Call Center Technology
• China SCP Experience
• Characteristics of China Support Centers
• China support Centers SWOT Analysis
• Leading China Outsourcing Call Center 95Teleweb
  Inc. Introduction

32
95Teleweb SCP KPIs
SCP Elem Name of Element SCP Metrics 95Teleweb Metrics
3.02 Response Time 80 within 5 minutes 80/20 seconds
3.03 Initial Call Back Response Time 80 customers get callback within 2 hours 24 hours
3.04 Resolution Time Company Specific 3 min
3.06 First Contact Resolution Company specific gt97
3.07 Customer Abandon Rate lt8 lt4
3.08 Electronic Support Request Acknowledgment 80 within 1 hours NA
3.09 Electronic Support Response Time 80 email get response along with potential resolution within 2 hours 24 hours

33
2004 Audit Results
34
Benchmark Comparison
35
OUTLINE

• Technical Support and Help Desk Outsourcing
  Market
• The Peoples Republic of China
• China Call Center Market Status
• China Call Center/Technical Support Challenges
• Trend in Call Center Technology
• China SCP Experience
• Characteristics of China Support Centers
• China support Centers SWOT Analysis
• Leading China Outsourcing Call Center 95Teleweb
  Inc. Introduction

36
Characteristics of China Support Centers

1. Corporate Culture and Environment
2. Employee Training, Staffing, and Incentives
3. Levels of Customer Service
4. Incorporating Customer Feedback
5. Interdepartmental Relationship and Consistency
   Across Channels
6. Measuring Customer Centricity and Links between
   Contact center Performance and the bottom line
7. Tools and Technology

37
1. Corporate Culture and Environment

• Motivation for the organization to become
  customer centric, including barriers that the
  organization had to overcome
• Customer service philosophy
• How culture has aided or worked against the
  contact centers focus on customers
• How company leaders internally demonstrate their
  commitment to customer centricity
• How companies ensure that each contact with the
  customer is made with warmth and appropriate
  intimacy
• Individual responsibility in the contact center
  for resolving customer complaints

38
2. Employee Training, Staffing and Incentives

• Developing necessary qualities in
  customer-centric technical support agents
• Attracting, hiring, retaining, and motivating
  support talent that have both people skills and
  technical skills
• Optimizing staffing levels in the contact center
  to provide the level of customer service that
  customers desire, while balancing the companys
  cost and resource requirements
• Ensuring the contact center performance
  management system supports the employee and
  management behavior necessary to deliver the
  optimal customer experience

39
3. Levels of Customer Services

• Providing mass customization
• Segmenting customers and determining levels of
  service
• Managing growth in the customer base
• Exceeding the expectations of customers
• Explaining service commitments to customers

40
4. Incorporating Customer Feedback

• Soliciting customer comments
• Soliciting perceptions of competitors
  performance as well as of company performance
• Determining the attributes that contribute to
  customer loyalty
• Demonstrating a link between a customer-centric
  approach and increased customer loyalty
• Sharing, posting, and updating contact center
  performance measures
• Having a future orientation toward customer needs

41
5. Interdepartmental Relationships and
Consistency Across Contact Channels

• Contact center relationship with other areas of
  the company
• Process for resolving conflict between
  departments
• Assurance that customer contacts and service
  delivery are consistent across all contact
  channels
• The process by which front-line service
  collaborates with back-office process

42
6. Measuring Customer Centricity and Links
between Contact Center Performance and the Bottom
Line

• Measuring success in the contact center
• Ensuring customer contact representatives and
  center measures are balanced
• Balancing efficiency measures with softer
  measures of customer centricity
• Tracking internal metrics that are predictors of
  increases or decreases in overall company success
  or customer satisfaction
• Measuring ROI on customer-centric initiatives
• Constructing a business case to justify the
  strategic plan for customer centricity

43
7. Tools and Technology

• Existing technology in place
• Assurance that everyone in the organization has a
  complete picture of the customer at all times
• Role of knowledge management systems to enable
  customer centricity
• Self-service technology

44
Future Directions of China Call Centers

• More centralization to achieve cost savings
  and increase efficiencies
• From cost center to profit center Inbound to
  outbound
• Incorporation of new technologies/applications
• Speech recognition and web collaboration
  investigations now, implementation next 12 to 24
  months
• CTI often linked to longer term CRM
  implementations.
• CRM some planning implementation over next 12
  to 24 months
• VoIP limited planning at present, seen as longer
  term (2-4 years) for implementation. Quality
  concerns delaying adoption

45
OUTLINE

• Technical Support and Help Desk Outsourcing
  Market
• The Peoples Republic of China
• China Call Center Market Status
• China Call Center/Technical Support Challenges
• Trend in Call Center Technology
• China SCP Experience
• Characteristics of China Support Centers
• China support Centers SWOT Analysis
• Leading China Outsourcing Call Center - 95Info
  Inc. Introduction

46
China Now on The Radar
Weakness (Challenges)
Strengths

• Political stability.
• Strong government support
• Very large domestic market
• Economic environment
• Attractive after entry into WTO
• Non-Latin language skills
• Infrastructure leapfrogs
• Hong Kong gateway for the more timid
• Cost of human resources 20-40 cheaper than
  India
• Reverse brain drain
• Strong Linux skills

• Intellectual-property protection and piracy
• Education level
• Lack of process
• Poor levels of English
• Poor technical innovators
• IT companies small
• Weak marketers
• Weak RD budgets and efforts
• Lack of international name brands
• Lack of innovative software products

Opportunities
Threats/Risks

• Distrust of legal system
• U.S. ignorance/perception of China
• Weak English skills
• Slower development of business relationships
• Corruption/piracy /trust
• Critical shortage of skilled IT resources
• Management of internal opposition to WTO reforms

• WTO opening up markets
• Very large domestic market
• 2008 Olympics
• U.S. investment focus
• Cooperation with India / Accepting Indian
  providers
• Finding creative ways to take on large projects
• Mass producing skilled IT professionals

47
OUTLINE

• Technical Support and Help Desk Outsourcing
  Market
• The Peoples Republic of China
• China Call Center Market Status
• China Call Center/Technical Support Challenges
• Trend in Call Center Technology
• China SCP Experience
• Characteristics of China Support Centers
• China support Centers SWOT Analysis
• Leading China Outsourcing Call Center - 95Info
  Inc. Introduction

48
Company Overview

• Founded in 1998, joint venture between Teleweb
  Inc. and CPTT group.
• 700 staff (CSRs, Supervisors, managers, project
  management, account management, CRM developers,
  IT technician) and some offshore management
• Regional sales (Beijing, Guangzhou, Shanghai,
  Xian)
• High-profile and active board of directors
• High-profile brand clients (200)

Client Lists
49

Company Profile

• A global provider of IT and business process
  outsourcing solutions to Fortune 1000
  corporations, Chinese enterprises, and service
  organizations.
• Ability to integrate customer services into a
  flexible, total single-point-of-contact solution
  is a key element of 95Infos success.
• Strong commitment to quality and has been
  delivering IT service solutions for over 6 years
  in China.
• Partnerships with some of the best-in-class
  corporations provide 95Info with unparalleled
  experience in providing IT support solutions
• Help Desk/Call Center Services
• Technical/Management Staffing
• Professional Services/System Integration
• Training Programs

50
Key Competitive Strengths

• Internationally Recognized Client Base affording
  significant growth potential and highly respected
  references
• Multiple Service Offerings that provide expanded
  business opportunities with existing clients for
  new services
• Technically Proficient Employee base that enables
  us to compete more effectively for sophisticated
  IT support services
• Recognition for Delivery of Quality services in
  the form of ISO90012000and SCP certifications,
  the international standard for quality assurance
  and operating consistency
• Advanced Technology infrastructure featuring
  state-of-the-art call center enabling the company
  to maintain a leading provider of the IT support
  services
• Strong financial position and solid balance sheet

51
95Teleweb is leading the Pack (source Anderson
Consulting)
Competition Landscape in Beijing Shanghai
Size of Circle Competitors current market
performance Company Resources Based on parent
company size and resources and connection with
industries in China Call Center Expertise Based
on call center operation experience ,outsourcing
experience, and breadth of services managed
High
95Teleweb
TCY
Bell South
Sykes Shanghai
800 Teleservices
ITS
Haier
Compaq- Start
China Motion
Expertise
Bertelsmann
Unicom
_at_network
Shanghai Post Telecom
Operation in Beijing Operation in
Shanghai Operation in both Not in
operation yet
CCID
269
Hong Fan
Great Infotech
Company Resources
Low
High
52
Achievements To Date

• Call Center CRM leading Service Provide
• Industry Scope Telecom, Insurance, Securities,
  Banking, IT, Auto, Pharmaceutical, Durable Goods
• Client list Microsoft, Nokia, Alcatel, Nortel,
  DB, China Unicom, China Life Insurance, VW,
  Legend, Tai-Kang and Tai-Ping Insurance,
  Sony-Ericsson, China Railroad Telecom, China
  Telecom and China Netcom, etc.
• World-Class Service 2004 2005 China Best
  Outsourcing Call Center Service Award.
• Continuous development and update of solution
  packages
• Proven management team to deliver satisfactory
  services
• Professional team to keep close ties with
  clients/prospect
• Comprehensive and sophisticated call center
  training curricula and certification programs

53
Market Positioning

• Multi-channel Customer Service solutions
• Vertical Markets
• High-tech Manufacturers
• Automotive Manufacturers
• Telecom/Financial
• Business Model
• BPO
• Consulting/Training/System Integration
• Enterprise CRM Application implementations
• Solution Suite
• Customer Relationship Management
• Telemarketing with e-fulfillment

54
Quality Awards and Certifications

• ISO90012000 Certification
• First outsourcing company in China to receive
  ISO certification
• CFIP2004 Best China Outsourcing Call Center
  Award
• The first outsourcing company to receive MII
  CFIP the Best large call center award, the best
  call center manager award, and the best call
  center service agent award
• sina.com Survey 2004 Five star awards among 21
  automobile care line centers
• Zol.com survey 2004 Number 1 and 2 best mobile
  handset call centers among 20 mobile call centers
• Sony-Ericsson 2004 Number 1 best call center
  among global 35 call centers
• The number one call center outsourcing service
  provider in China based on market share, company
  resources and expertise. - Anderson consulting,
  2001
• SCP certification 2004
• First outsourcing call center in China to seek
  SCP certification
• One of the leading call center service
  providers in China IDC 2003

55
Our Impressive Customer List
56
Thank You!
Baumin Lee (86) 13701215695 (86) 56801060 ext.
5308 Baumin.lee_at_95teleweb.com