Contact center state of the market presentation delivered at CRM Evolution 2009 in New York City.

1. Latest Market Trends Impacting Contact Center Strategy August 24, 2009

2. Today’s Economy Demands a Focus on Performance Improvement 1

3. How Business Leaders Are Responding Strategically 2 Survey Response of over 1400 Business Leaders – November 2008 Reduce Operating Expenses Increase Productivity Reduce Working Capital & Capex Introduce New Product / Services Restructure / Reorganize Seek Merger Acquisition Hire Key Talent Leave Certain Markets Increase Hedging No Steps Generate Cash Strengthen the Core Grow! 0% 20% 40% 60% 80% *McKinsey Quarterly, 1,424 respondents in November 2008 2

5. Margin pressure

6. Missing forecasts

7. Increasing sales and gross margins

8. Increasing market share

9. Scalable costs

10. Declining sales

11. Operating losses

12. Declining or negative cash flow

13. Out of cashWarning Signs 3 3

14. How Companies are Responding Tactically 4 Company’s Response to Downturn Impact of Economic Downturn on the Company

16. Segmentation and focus

17. Channel management and effectiveness

18. Pricing strategy and customer terms

19. Sales and marketing effectiveness

20. Customer relationship and targeting

21. Portfolio and product management

22. Order management and delivery

23. Competitive intelligence

24. Forecasting and demand management

26. Logistics planning

27. Production planning and process

28. Labor cost management

29. Sourcing and supplier management

30. Quality improvement

31. Service and warranty optimization

32. Materials cost reduction

33. Product design optimization

34. Supply and outbound logistics

36. Shared services and outsourcing

37. Indirect spend management

38. HR, payroll, benefits, and training

39. Sales and marketing overhead

40. IT applications and infrastructure

41. Finance and administrative efficiency

42. Insurance & risk management

43. Management reporting and KPI’s

45. Cash forecasting and management

46. Billing and credit management

47. Credit terms and factoring

48. Inventory management

49. PP&E utilization

50. Financial controls and monitoring

51. Capital expenditure planning

52. Order to cash cycle

53. Procure to pay cycle

54. Financing costs and incomeIndustry Perspective Performance Management Products and Pricing Customer Growth Sales and Marketing Strategic Context People and Locations Revenue Logistics Drivers ofEarnings and Cash Finance and Admin Direct Costs Operations Overhead Sourcing IT and MIS Working Capital AR / AP Inventory Financing and Property 5 5

55. How Recessionary Conditions Influence Contact Center Strategy In response to the downturn, the following strategies are being employed by companies that own and operate contact center operations Rationalizing Contact Centers Recession is forcing companies to optimize overhead costs as a way to preserve cash resulting in an increase demand in outsourcing or rationalizing of existing centers 1 Rethinking Technology Investments The recession has forced some practitioners to rethink there existing technology platforms including SsaS/Hosted Solutions, Unified Communications and Social Media 2 Improvement in Government Service Levels Government agencies are expected to provide the same level of service (if not better) than the private sector 3

56. Rationalizing Contact Centers 1 2 3 Companies are cutting back, rationalizing or consolidating contact centers when G&A spend does not flex with revenue or there are a number of decentralized/redundant support functions. Consolidation & outsourcing allows a company to “variablize” their cost base and focus on the core business. Recent Cut Backs/Consolidations Teleperformance & Teletech were forced to cut back or close operations in Belleville, VA & Akron, OH StarTek closed its Regina, Saskatchewan center March 2009 SITEL is closing its Sudbury Ontario center affecting 350 jobs Advance Auto Parts announced plans to shut down its 90 person call center in Roanoke, VA Greyhound announced plans to close its Tucson, AZ operation affecting affecting 450 jobs Recent Growth/Expansions RYLA announced plans to open a new regional headquarter customer contact center hub in Saraland, AL creating 600 customer service &supervisory jobs Cbeyond plans organic growth creating 600 jobs through 2011 Geico & Afni announced in 2007 that they would add 200 jobs at their local call centers Sykes opened a new state-of-the-art call center in Bardstown, KY Verizon Wireless rationalizes 2 NYC centers and opens 2 in Atlanta, GA & Wilmington, NC

58. Contact Center Satisfaction Index (CCSI) states 65% of unhappy customers will defect to a competitor if they receive poor treatment or experience a negative moment of truth by a live agent

59. Software-as-a-Service/Hosted Solutions are gaining traction in the contact center space

60. Unified Communications& IP-based contact centers as a way to improve customer retention rather than customer acquisition

61. Web 2.0 Technology is enabling practice leaders to right-channel more interactions to the web and less to live agents which is reducing G&A spend

63. Improvement in Government Service Levels 1 2 3 Situation Analysis & Market Observations There is a growing pressure to increase operational efficiencies while at the same time ensuring that citizens can access any necessary information at any time. According to the latest scores from the American Customer Satisfaction Index (ACSI), the federal government still lags behind the private sector when it comes to delivering exceptional customer service Complication The Federal Government is a monolith and citizens are completely intimidated by the complexity of it. The challenge that most Federal Governments face is how to make the government smaller for its citizens and provide the same level of service (if not better) than their commercial counterparts Solution Many federal, state & municipal agencies are investing in Web 2.0 and other tools to improve transparency and level of care to its citizens constituents

65. Over the past five years, these efforts seemed to have plateaued due to lack of governance models, legal, cultural and operational roadblocks

66. Web-related efforts are often fragmented from one agency to another

67. Sharing information across siloed departments runs counter to the 360-degree view of the customer theory of CRM

68. Most federal agencies don’t refer to their “citizens” as “customers”

69. Generally the government culture is slow to adopt technology

70. Insufficient capabilities exists in the arena of marketing, usability, customer insights and Web analytics

72. Employees at the DMV were scared to take lunch in their uniforms because they were scared at what citizens may say, think or do to them!

73. Lowered the wait time at the DMV from two hours to six minutes

74. Joe Doyle has taken the State of Georgia’s call centers from 50th in the nation to 4th with service levels approaching the quality of service as Nordstrom’sHis approach to transforming the State of Georgia call centers are anchored in four basic principles – the importance of top-down leadership, principle centered, customer driven and results focused 12 1 2 3

77. Since the launch of Medicare in 1966, beneficiaries had to navigate through several hundred 800 numbers because CMS’ call centers operated as a patchwork of 71 standalone centers.

78. The Virtual Contact Center Strategy and enabling technologies provide CMS with the tools to standardize operations and has resulted in: sustained cost savings in call center operations due to decreased call resolution time; consistent, accurate, and clear responses to Medicare beneficiaries and the public, thus improving customer service; increased efficiency and one-stop shopping13 1 2 3

80. While these efforts are happening, we should never lose sight of the importance of the customer and the social responsibility of organizations to deliver on its customer value proposition

81. Judicious use of call center technology integrated with a customer-driven approach to training, live agent empowerment and change management should result in effective and efficient operations balanced with high customer satisfaction14

82. 15 Art Hall Manager Alvarez & Marsal, LLC ahall@alvarezandmarsal.com(404) 260-4152 (O) (404) 759-9158 (M) www.alvarezandmarsal.com NORTH AMERICA • EUROPE • LATIN AMERICA • ASIA 15