Focus of this webinar: Present key findings from the Q3 2011 Market Vista report and implications for buyers and service providers Provide perspectives on the state of the global services industry in Poland and implications for stakeholders

1. Key Market Developments in Q3-2011:
Market Vista Briefing
November 8, 2011
Live tweeting #MarketVista

2. Introductions
Eric Simonson
Managing Partner, Research
Everest Group
eric.simonson@everestgrp.com
Amneet Singh
Vice President, Global Sourcing
Everest Group
amneet.singh@everestgrp.com
Salil Dani
Research Director, Global Sourcing
Everest Group
salil.dani@everestgrp.com
Proprietary & Confidential. © 2011, Everest Global, Inc. 2

3. Context setting
Focus of this webinar
 Present key findings from the Q3 2011 Market Vista report and implications for
buyers and service providers
 Provide perspectives on the state of the global services industry in Poland and
implications for stakeholders
Proprietary & Confidential. © 2011, Everest Global, Inc. 3

4. Market Vista provides continuously updated facts and
analysis every quarter to enable effective management of
global services portfolios
General sourcing market Service Provider landscape
 Detailed analysis of trends by  Updates on service
industry vertical and provider market share,
geography capabilities, and
 Report of transaction volume, performance
size, and momentum  Service provider
 Perspective on events with profiles, including data
significant industry impact on:
(e.g., M&A) – Transactions
 Implications of regulatory – Location footprint
changes – M&A activity
Location data and dynamics Processes and models
 Data on market activity  Process-level trends
in key offshore  Details of captives set
geographies ups, divestures, and
– Political overall trends
– Macroeconomic  Fact-based insights on
– Promotion incentives adoption of emerging
 Trends in wage pricing models
inflation, attrition, and  Data and perspectives
arbitrage on new opportunity
areas
Proprietary & Confidential. © 2011, Everest Global, Inc. 4

5. Related Content
Related Content
 Market Vista: Q3 2011
 Global Locations Compass – China
 Global Offshore Captive Landscape and Trends: Focus Geography - China
 Global Location Insights: October 2011 – Perspectives on Global Services Market in Poland
 Blog: Video: Outsourcing and Offshoring Trends in Pharmaceuticals Report – Key Findings
 Blog: Do Indian Tier 1 Service Providers Run the Risk of Losing Their Cost Competitiveness?
 Blog: Indian “Strategic” Outsourcing Deals: Can the elephants dance when the music changes?
Proprietary & Confidential. © 2011, Everest Global, Inc. 5

6. What will you learn from today’s webinar?
Audience poll
Summary of key messages Questions we will address today
Outsourcing and offshoring  What is the current outlook for global sourcing activity?
activity declined in the third  What is the extent of decline?
quarter of 2011  Which segments are exhibiting momentum? Weakness?
Delivery center set-up activity  How are the center set-ups distributed geographically?
remained steady in the third  Which new captives were set-up during the quarter?
quarter  What are the trends across Tier 1 and Tier 2 locations?
The service provider financial  How did service provider segments perform financially?
performance and market activity  Which providers were most active in deals and M&A?
in the Market Vista index varied  How has the share of deals signed by Market Vista index
across different players/segments service providers changed?
Poland has become the primary  Is Poland viewed as an offshoring location?
European delivery hub due depth  What are the leading cities for global sourcing activity?
of multi-lingual skills and cultural  How do operating costs in Tier 1/ 2 locations compare?
affinity  What are the distinctive advantages offered by Poland?
Proprietary & Confidential. © 2011, Everest Global, Inc. 6

7. Poll Question: Which statement best reflects your
sentiment about demand for global services?
Significant decrease in demand 3%
Modest decrease in demand 26%
Flat or steady demand 39%
Modest increase in demand 26%
Significant increase in demand 5%
Source: Live polling conducted during the “Market Vista Q3 2011” webinar on November 8, 2011
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8. Agenda
 Key market developments in Q3 2011
 Special topic: Global services industry in Poland
Proprietary & Confidential. © 2011, Everest Global, Inc. 8

9. Both outsourcing transactions and captive activity decreased
from last quarter
Index of outsourcing transactions1 Index of offshore captive health1
Number Number 2
Captive set-ups = New + Expansion
Captive divestures =
503 516
472 33
4
20
13 29
20
9
4 1 1
Q3 2010 Q2 2011 Q3 2011 Q3 2010 Q2 2011 Q3 2011
1 Includes only publicly disclosed data
2 Announcements include both new set-ups and expansion of existing captive operations
Source: Everest Group analysis
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10. The decrease in outsourcing transactions was mostly due to
lower traction in the public sector, particularly in the UK
Outsourcing transactions by vertical Outsourcing transactions by buyer geography1
Number of transactions Number of transactions
100% = 503 516 472 100% = 503 516 472
Others3 4% 1% 1%
Others1 20% 22% 21% 22% 21%
RoW2 20%
MDR 17% 15% 17%
Rest of Europe 25% 27%
Healthcare 8% 28%
11% 11% (RoE)
E&U 8% 5%
Defense 4% 3% 7%
2% 13% 20% 17%
UK
Government 15% 17% 14%
Technology 2% 2%
7% 3% 4%
Telecom 5%
North America 34% 32% 34%
BFSI 20% 19% 21%
Q3 2010 Q2 2011 Q3 2011 Q3 2010 Q2 2011 Q3 2011
1 Includes logistics and wholesale, services, travel and transport, media and entertainment, education, etc. Also, includes any transactions where buyer
identity/industry was not disclosed
2 Includes Asia-Pacific, Middle East, Africa, and Latin America
3 Includes transactions where the buyer geography was not publicly disclosed
Source: Everest Group analysis
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11. Outsourcing activity continued to remain steady in financial
services and manufacturing although the distribution varied
across geographies
ITO AND BPO TRANSACTIONS
Financial services Manufacturing, distribution, and retail
Distribution of transactions by buyer geography1 Distribution of transactions buyer geography1
Number Number
100% = 99 98 100 100% = 83 76 82
Others3 1% 1% Others3 4% 1%
8% 13%
7%
19% Rest of World2 18%
29%
Rest of World2 27%
Rest of Europe 34%
29% 46%
22% 38%
Rest of Europe 26%
10% UK 18%
18%
UK 11% 14% 22%
41% North America 37%
North America 27% 30% 26%
21%
Q3 2010 Q2 2011 Q3 2011 Q3 2010 Q2 2011 Q3 2011
1 Buyer geography is the buyer location or the signing region associated with the transaction
2 Includes Asia-Pacific, Middle East, Africa, and Latin America
3 Includes transactions where the buyer geography was not publicly disclosed
Source: Everest Group analysis
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12. Service provider developments | Market Vista Index service
providers
Traditional global service providers Offshore-centric service providers
1
3
2
1 Perot was acquired by Dell in Sep 2009 and was rebranded as Dell Services
2 EDS was integrated into HP, and the segment is now called HP Enterprise Services (HP ES)
3 Hewitt merged with Aon in October 2010 and the combined entity is now called Aon Hewitt
Proprietary & Confidential. © 2011, Everest Global, Inc. 12

13. Service provider developments | Overview
Highlights of Q3 2011
Sequential growth in revenues (Q2 2011 vs. Q1 2011) Sequential growth in operating margins (Q2 2011 vs. Q1 2011)
Percentage Basis points
6.2
3.0
4.0 -13.0
3.6
-117.0
Traditional Offshore-centric Overall Traditional Offshore-centric Overall
global service service global service service
providers providers providers providers
Top events in Q3 2011
Top service providers by number of
Top outsourcing transactions by deal value transactions announced Significant M&A deals
 Department for Work and Pensions (UK)-IBM:  IBM: 23 deals  IBM-Algorithmics: The deal, valued at US$387
US$1.2 billion (seven years)  Accenture: 11 deals million, will expand IBM's business analytics
 Vodafone Essar-IBM: US$1.0 billion (six  HP ES: 10 deals capabilities in the financial services industry
years)  CSC: nine deals
 U.S.-based manufacturing firm-CSC: US$900  Infosys: nine deals  Capgemini-AIVE: The US$60 million acquisition will
million (ten years)  Capgemini: eight deals strengthen its application portfolio as well as its
 Manulife Financial-IBM: US$659 million (seven  HCL: seven deals Software-as-a-Service (SaaS) positioning in Italy
years)  ACS: six deals
1 Analysis includes financials for Mahindra Satyam, which was acquired by Tech Mahindra in April 2009
2 Normalized operating margins exclude ACS, Atos, Capgemini, and Dell Services as information is not available
Source: Company disclosures; websites; press releases; Everest Group analysis
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14. While overall transaction activity reduced in Q3 compared to
Q2, the share of leading service providers increased during
this period
Number of outsourcing transactions announced
Number of deals
100% = 516
472
Market Vista Index
service providers 108
118
Other service
408
providers 354
Q2 2011 Q3 2011
Source: Everest Group analysis
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15. Asia continued to account for majority of offshore location
activity in Q3; Tier-1 cities reported marginally more activity
than Tier-2 cities
Offshore location activity across geographies Offshore location activity across Tier-1 and Tier-2
Number of service delivery centers set up locations
Number of service delivery centers set up
Q2 2011 Q3 2011
2010 Quarterly average
24 23 24
21 21 22
19 18
17 17 17
9
7
5
2
Asia Europe and Africa Latin America Tier-1 Tier-2
Note 1: Offshore location activity denotes number of delivery centers of captives and third-party service providers established in offshore locations
Note 2: Five delivery centers were set up in Africa during Q3 2011
Source: Everest Group analysis
Proprietary & Confidential. © 2011, Everest Global, Inc. 15

16. While India continued to account for largest activity in the
captive1 market, Europe and Africa also witnessed
considerable activity
Europe: Four captive set-ups
 Nestle opened its shared business
service center in L’viv (Ukraine) Rest of Asia: Five captive set-ups
 Romtelecom opened its new BPO  Acer opened its new R&D facility in
center in Bacau (Romania) Chongqing (China)
 Nokia Siemens Networks opened an R&D
facility in Quezon City (The Philippines)
 Mitsui Chemicals opened its new center in
Singapore
Middle East and Africa: Four captive set-ups
 Ericsson opened its first regional support
center in Ghana (Africa)
 Amazon opened its new customer service
center in Cape Town (South Africa)
Latin America: One captive set-up
 National Instruments opened a
new shared services center in San India: Six captive set-ups
 Microsoft opened a R&D center in Bangalore (India)
José (Costa Rica)
 Maruti opened a new R&D center in Delhi/NCR (India)
 Fiserv opened a new R&D center in Bangalore (India)
1 Indicates announcements related to actual captives set-ups and expansion
Note: All references to captives include only offshore captives
Source: Everest Group analysis
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17. Sourcing risk: Currency appreciation in Brazil, Chile, and
Malaysia is impacting arbitrage potential in these locations
Currency trends over 2007-11 xx% Net change in currency over 2007-11 ITO SERVICES
Local currency/USD indexed to 2007
Appreciating currency: Increases costs in USD
+19% Brazil
+13% Malaysia
+7% Philippines
-4% Poland
-10% India
Depreciating currency: Decreases costs in USD
2007 2008 2009 2010 2011
Annual operating costs per FTE per annum xx% Arbitrage relative to U.S.
2011; Index: India = 100 Tier-1 city (Chicago)
300-320
170-175 175-180
100 115-120
India Philippines Malaysia Poland Brazil
(Bangalore) (Metro Manila) (Kuala Lumpur) (Krakow) (Sao Paulo)
80-85% 75-80% 69-72% 67-71% 42-47%
Source: Everest Group analysis
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18. Agenda
 Key market developments in Q3 2011
 Special topic: Global services industry in Poland
Proprietary & Confidential. © 2011, Everest Global, Inc. 18

19. Poll Question: What is your organization’s current
posture on the role of Poland for global services?
Do not currently use and no plans to
66%
begin using Poland
Do not currently use, but plan to
11%
begin using Poland
Use for service delivery, but not
5%
planning to grow
Use for service delivery and planning
14%
to grow modestly (<20% growth)
Use for service delivery and planning
5%
to grow significantly (>20% growth)
Source: Live polling conducted during the “Market Vista Q3 2011” webinar on November 8, 2011
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20. Leading buyers and service providers have multiple delivery
centers in Poland
Tier-1 city
Tier-2 city
NOT EXHAUSTIVE
Gdansk
Olsztyn
Poznan
Warsaw
Lodz
Wroclaw
Katowice
Krakow
Source: Everest Group analysis
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21. Poland’s key strengths include significant depth in multi-
lingual skills and cultural affinity with source geographies
along with moderate savings in global services delivery
Annual operating cost per FTE in F&A services
2011; US$ (‘000s)
68-70
40-43% 45-50%
Poland offers significant depth in multi-lingual
skills
40-42 39-41  Good availability of English, German, Russian,
34-36 French, and Spanish
 Multiple players already leverage Poland for
delivery of multi-lingual voice- and non-voice-
BPO processes such as customer care,
transaction processing
Croydon
Croydon Warsaw
Warsaw Krakow
Krakow Lodz
Lodz
(London) (Tier-1) (Tier-1) (Tier-2)
Please refer to our recent newsletter Perspectives on Global Services Market in Poland for more details
and insights
Source: Everest Group analysis
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22. Q&A
 Attendees will receive an email enabling them to download today’s webinar presentation as well as access
a recorded audio version
 For advice or research on Market Vista, please contact:
– Eric Simonson, eric.simonson@everestgrp.com
– Amneet Singh, amneet.singh@everestgrp.com
– Salil Dani, salil.dani@everestgrp.com
 For background information on Everest Group, please visit:
– www.everestgrp.com
– research.everestgrp.com
 Thank you for attending today
To ask a question during the Q&A session
 Click the question mark (Q&A) button located on the floating tool bar in the bottom right of your screen.
This will open the Q&A Panel
 Be sure to keep the default set to “send to All Panelists”
 Then, type your question in the rectangular field at the bottom of the Q&A box and click the send button to
submit
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23. Check out our blog for the latest perspectives on global
services
Experts in the global
services terrain
www.sherpasinblueshirts.com
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24. About Everest Group
Everest Group is an advisor to business leaders on the next generation of global
services with a worldwide reputation for helping Global 1000 firms dramatically
improve their performance by optimizing their back- and middle-office business
services. With a fact-based approach driving outcomes, Everest Group counsels
organizations with complex challenges related to the use and delivery of global
services in their pursuits to balance short-term needs with long-term goals. Through
its practical consulting, original research and industry resource services, Everest
Group helps clients maximize value from delivery strategies, talent and sourcing
models, technologies and management approaches. Established in 1991, Everest
Group serves users of global services, providers of services, country organizations
and private equity firms, in six continents across all industry categories. For more
information, please visit www.everestgrp.com and research.everestgrp.com.
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25. Everest Group
Leading clients from insight to action
Everest Group locations
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+1-214-451-3000
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