July 2006
The Challengers
India and China are growing and gaining prominence so we decided to put a face to some of these companies servicing Canadian and US companies. The one thing about Asia is it moves fast reading over the research from 2003 one could see how fast these companies are growing. Moving from 0 to 6,000 or 8,000 employees in 3-5 years. We also included some US firms which are competing on more automation than labour arbitrage.
| Company | API Outsourcing | 247Customer.com | Mphasis |
| Founded | 1998 | 2000 | 2000 |
| Service Sector | Accounts Payable/Billing | Outbound/Inbound calling | IT Services |
| Markets Served | USA-Fortune 1000 | Asia, Europe, North America-Fortune 1000 | Asia, Europe, North America- G2000 |
| President/CEO | Gary Hallen | P.V. Kannan | Jerry Rao |
| Value Proposition | Automation of AP,A/R (Quality) | Quality/Performance | Quality |
| Milestones | E&Y Entrepreneur award (2004) & VC funding | Global Quality Certifications & VC funding | Shares bought by EDS & super growth |
| Head office | St. Paul, USA | Bangalore, India | Bangalore, India |
| Employees (2006) | N/A | over 6,000 (Jan 2006) | 12,000** |
| Growth Rate (rev. 2003-2005) | 135% | >100%** | 30%** |
| Website | www.apioutsourcing.com | www.247customer.com | www.mphasis.com |
**Estimate (due to high growth and the nature of outsourcing the number of employees can change dramatically). Not all companies are listed and some financial information comes from 3rd parties if we could not independently verify the financial information we estimated based on the most conservative view.
API Outsourcing
API Outsourcing is compared to the other two India firms, but its business model in our view from talking with the executives and analyzing the solution is process automation. This aspect differentiates from any India firm we have seen in the finance and accounting space. API Outsourcing is a process leader and a good example of where North American Service Providers should concentrate their efforts.
API Outsourcing is a leading business process outsourcing provider to Fortune 1000 companies. Founded in 1998, API provides state-of-the-art billing and accounts payable automation solutions. The process uses API's proprietary database technology to parse the customer's data and provide information in a designated format - print, email, e-bill and EDI - to complete transactions. Because all transactions are converted to one common electronic format and stored, all information is instantly available to authorized personnel and customers via the Internet, intranet, or extranet.
Gary Halleen, President and CEO, has 30 years of experience in information automation, including data processing, data communication, information management, document management, and imaging systems. He founded, and later sold, ComSquared Systems. In May 2004 he won the prestigious Ernst & Young Entrepreneur of the Year for the Minnesota and Dakotas region.
How did he get into this field? We never
interviewed him, but it looks like his experience at 3M
30 years ago gave him the foundation for electronic business.
247customer
247customer.com was founded by PV Kannan and Shanmugam Nagarajan who sold Business Evolution in 1999 to Kana Communications. They were initially looking at outsourcing email administration for high volume websites. 6-7 years ago many people thought that the phone would be less important--here we are in 2006 and we are actually using them more-and with more applications such as GPS. The founders initially invested between 2-5 million USD to jump start growth.
In 2000 247customer.com formally started their operations and has well over 6,000 employees currently. They were featured in Forbes in 2003 as a hot startup they entered Canada in September 2004. What makes this firm different--commitment to quality and customer service. From six sigma processes to certifications and to hiring it has brought a Japanese management style to the service industry in general.
In 2003 US based Venture Capital firm Sequoia Capital invested 22 million USD in a show of support for the business model.
24/7 Customer’s core expertise is inbound customer services support, outbound telemarketing and tele sales calls and inbound technical support calls.
Mphasis
MphasiS BFL was created out of the merger of MphasiS and a California-based IT firm (in April ’00). IT was founded by a former Citibank India CEO Jerry Rao (Chairman & CEO) and Jeroen Tas (Vice Chairman) who also worked at Citibank. The company has grown to 25 offices in 9 different countries including Canada.
MphasiS focuses financial services, technology, healthcare and telecom verticals, and in the these verticals their solutions focuses on IT architecture, application development and integration, application management and business process outsourcing, including the operation of large-scale customer contact centers. MphasiS clients typically operate complex, highly distributed IT infrastructures.