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KM² Solutions Award Write Up

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2019 Latin American and Caribbean Contact Center Outsourcing Services Competitive Strategy Innovation and Leadership Award

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KM² Solutions Award Write Up

  1. 1. FROST & SULLIVAN BEST PRACTICES AWARD Competitive Strategy Innovation & Leadership 2019 CONTACT CENTER OUTSOURCING SERVICES - LATIN AMERICA AND CARIBBEAN
  2. 2. BEST PRACTICES RESEARCH © Frost & Sullivan 2019 2 “We Accelerate Growth” Contents Background and Company Performance ........................................................................3 Industry Challenges..............................................................................................3 Strategy Innovation and Customer Impact of KM2 Solutions.......................................4 Conclusion...........................................................................................................6 Significance of Competitive Strategy Innovation and Leadership ......................................7 Understanding Competitive Strategy Innovation and Leadership ......................................7 Key Benchmarking Criteria ....................................................................................8 Strategy Innovation..............................................................................................8 Customer Impact .................................................................................................8 Best Practices Recognition: 10 Steps to Researching, Identifying, and Recognizing Best Practices ...................................................................................................................9 The Intersection between 360-Degree Research and Best Practices Awards.....................10 Research Methodology ........................................................................................10 About Frost & Sullivan ..............................................................................................10
  3. 3. BEST PRACTICES RESEARCH © Frost & Sullivan 2019 3 “We Accelerate Growth” Background and Company Performance Industry Challenges On the strength of nearshoring demand from the United States (US), contact center service providers in the Central America and Caribbean region are experiencing some of the fastest growth rates in the hemisphere. Frost & Sullivan research expects the contact center outsourcing service market in Central America and the Caribbean region to continue growing vigorously, above a 7% compound annual growth rate year to year through 2023, and to achieve an estimated $3.6 billion in cumulative revenues by the end of that year. Both the number of raw agents and seats are forecast to rise continuously as well, with growth rates strongest up to 2020. 1 In the short-term (1 to 2 years) and longer-term (5 to 6 years), nearshore business will continue to provide opportunities for contact center service providers. In the face of commoditization, many organizations across verticals are focusing on increasing the frequency, quality, and personalization of customer touch points and experiences. The tight labor market in the US is propelling enterprises large and small to explore outsourcing back office, sales, and customer care operations for the first time. Telecom operators, contact center service vendors, and business process operations are intensely interested in new technology advancements, but they appear apprehensive of full automation and more comfortable with tools to boost productivity per agent and increase average revenue per agent. Digital marketing campaigns from many mid-market enterprises and consolidating sectors are corresponding with larger contact center service deployments to handle sales and customer care—providing service vendors a foothold to demonstrate value and expand services. While the volume of calls and agent numbers are up, many traditional customer care services increasingly are commoditized and the trend will continue—forcing vendors into a struggle to differentiate. Absent a compelling advantage, this competition may result in price wars. Moreover, finding and maintaining a labor pool continues to prove difficult in a mature market. In many nearshore locations, the labor force locally cannot supply the needed English-speaking resources—restraining many large and established providers from expanding. In light of the commoditization of many contact center services and plateauing capabilities for traditional providers, contact service providers are leaning hard on digital transformation to drive down costs in the hope that automation will boost revenues. However, this addressable market is a small pool of potential buyers. The market thus opens an opportunity for service vendors to take advantage of productivity-boosting technology while truly differentiating by demonstrating a better experience for consumer 1 Analysis of the Contact Center Outsourcing Services Market in Latin America and the Caribbean, Forecast to 2023: Automation is Heading the Market for Disruption, (Frost & Sullivan, November 2018).
  4. 4. BEST PRACTICES RESEARCH © Frost & Sullivan 2019 4 “We Accelerate Growth” and clients. Opportunities exist for vendors to address underserved market segments and buyers new to contact center outsourcing. Strategy Innovation and Customer Impact of KM2 Solutions Recognized as a Frost & Sullivan customer value leader in 2015, KM2 Solutions (KM2 ) has demonstrated an impressive acuity in identifying growth opportunities and building a sustainable foundation. A family company, KM2 prioritizes the long-term vision in its strategic planning. Experiencing a steady double-digit growth rate in recent years, and an over 20% revenue growth in 2018, KM2 is building a dynamic and diversified footprint as it reaches its 15-year anniversary this year. Exceptionally Nimble and Adaptable KM2 operates as an impressively nimble service provider, able to partner with customers to meet unique needs in the market–discerning previously unrecognized efficiencies and gaps. The company begins from a perspective of prioritizing not simply winning business, but building true partnerships that grow together to create better products, processes, and outcomes. These close working relationships (discussing a client’s entire operation and goals) make operations highly flexible, where the client and KM2 management know the individuals assigned to which accounts—a personal touch that makes dialogue and course changes straightforward and uncomplicated. Similarly, compared to large and distant contact services providers, KM2 has a much closer perspective and ability to manage operations on the ground. With modern locations and an advanced infrastructure, KM2 has a streamlined focus on country and facility levels that enables it to focus on solutions and performance, dynamically expanding an implementation alongside client needs. Since its founding, the company has grown revenues and available capacity every year and can meet the needs of startups, for customer care or back office seats, and larger customers who need scale, e.g., hundreds of seats across customer engagement, sales and marketing, collections, and back-office processing. Building Local Relationships with Long-term Vision Frost & Sullivan commends KM2 's choice to take the less traveled path, building capacity by implementing a long-term strategy to create a positive presence in locations with untapped potential. The KM2 vision centers on entering locations early in the lifecycle for contact center or business processes outsourcing. This approach provides protection from labor pool competition but requires relationship building in local communities and with local governments. KM2 collaborated with developers and governments to build facilities and cultivate a reputation as a stable, trustworthy, and generous employer. As a result, KM2 can depend on steadfast populations and thus provide clients with quality performance and productivity.
  5. 5. BEST PRACTICES RESEARCH © Frost & Sullivan 2019 5 “We Accelerate Growth” From the first facilities in the English-speaking Caribbean, the company expanded into services with bilingual operations—making long-term plans to support the community and gain a competitive advantage with positive relationships. Now with 10 facilities in 6 countries (Bogota, Colombia; Castries, Saint Lucia; San Pedro Sula, Honduras; Grenville, Grenada; Santo Domingo, Dominican Republic; and Bridgetown, Barbados), KM2 has admirably added capacity and capabilities with the framework that can double and triple footprint smoothly. KM2 prioritizes good relationships with local communities and governments and treating employees as part of the family-run company. In everyday business, KM2 pays fair and above minimum wages, providing medical insurance, as well as child care partnerships for working parents in many countries. The company leverages its corporate social responsibility arm, KM2 Cares, to support families and communities when troubles or challenges arise, and also to provide education programs and learning supplies to local schooling organizations. The results speak for themselves, with low turnover and high employee satisfaction rates in an industry known for burnout. Proving the Value Consulting with customers to discover their true profit and lost centers, KM2 challenges a comparison against preexisting performance. The results prove the efficacy of its methods. Many new clients are outsourcing for the first time, and KM2 can guide prospective buyers through the plethora of omnichannel services offered in a consultative approach. KM2 sends a management team from US corporate headquarters and a management team from the nearshore location to the client’s site to spend several days learning their business and uncovering opportunities to drive synergies and efficiencies. With its nimble operations and a low starting threshold, KM2 can conduct a proof of concept test for a single line of businesses or challenge a customer’s internal teams. In these trials, KM2 demonstrates its value to achieve equal or better results with lower costs—generating opportunities to provide further high-performance services. Championing Underserved Markets With its exceptional agility to adapt to client service and capability needs, KM2 strategically diversifies its client base and establishes relationships with dynamic companies and underserved markets. New types of niche verticals and markets are looking to experiment with nearshoring services but are not willing to invest in complex 200 seat contracts. As KM2 recognizes the potential in these customers and focuses on a diversified customer base, it works with fast-scaling companies, mid-size enterprises, and new growth areas. For example, startups who previously might have looked to outsource in South or East Asia find that large companies are unresponsive and uninterested. KM2 can implement a new program with 20 agents for a particular function, perform well and complement with additional services, while remaining price competitive.
  6. 6. BEST PRACTICES RESEARCH © Frost & Sullivan 2019 6 “We Accelerate Growth” Following service gaps in niche markets has been a growth enabler; the company has targeted eCommerce companies, auto financing, as well as newly consolidated enterprises. In 2018, KM2 reached particular success with a set of recently merged healthcare clients. First demonstrating the efficiency capable in performing scheduling and appointments for many offices of the same practices, KM2 finds the synergies in combining additional lines of business in its locations. Success has bred success in these new growth areas as CEOs give referrals to other medical practices growing by acquisition and consolidation. Conclusion With seemingly little to distinguish between service providers in the contact center outsourcing space, KM2 Solutions (KM2 ) truly distinguishes itself with its long-term vision and strategic execution. Selecting the paths less traveled to develop facilities in nearshore locations where it cultivates positive relationships with workers and communities, KM2 delivers high-performance quality services to clients. Targeting niche verticals and emerging market spaces, KM2 demonstrate the productivity and savings it can achieve within a range of services. As an authentic consultative partner, KM2 spends the time to understand a client’s business and uncover opportunities for efficiency. With its competitive differentiation based on sustainable growth strategies, KM2 Solutions earns Frost & Sullivan’s 2019 Competitive Strategy Innovation and Leadership Award in contact center outsourcing services in the Latin America and Caribbean region.
  7. 7. BEST PRACTICES RESEARCH © Frost & Sullivan 2019 7 “We Accelerate Growth” Significance of Competitive Strategy Innovation and Leadership Any successful approach to achieving top-line growth must (1) take into account what competitors are, and are not, doing; (2) meet customer demand with a comprehensive, value-driven product or service portfolio; and (3) establish a brand that resonates deeply with customers and stands apart from other providers. Companies must succeed in these three areas—brand, demand, and positioning—to achieve best-practice levels in competitive strategy. Understanding Competitive Strategy Innovation and Leadership As discussed above, driving demand, brand strength, and competitive differentiation all play a critical role in delivering unique value to customers. This three-fold focus, however, must ideally be complemented by an equally rigorous focus on Strategy Innovation and Customer Impact.
  8. 8. BEST PRACTICES RESEARCH © Frost & Sullivan 2019 8 “We Accelerate Growth” Key Benchmarking Criteria For the Competitive Strategy Innovation and Leadership Award, Frost & Sullivan analysts independently evaluated two key factors—Strategy Innovation and Customer Impact— according to the criteria identified below. Strategy Innovation Criterion 1: Strategy Effectiveness Requirement: Strategy effectively balances short-term performance needs with long-term aspirations and vision for the company. Criterion 2: Strategy Execution Requirement: Adoption of best-in-class processes supports the efficient and consistent implementation of business strategy. Criterion 3: Competitive Differentiation Requirement: Unique competitive advantages with regard to solution or product are clearly articulated and well accepted within the industry. Criterion 4: Executive Team Alignment Requirement: The executive team is aligned along the organization’s mission, vision, strategy, and execution. Criterion 5: Stakeholder Integration Requirement: Strategy reflects the needs or circumstances of all industry stakeholders, including competitors, customers, investors, and employees. Customer Impact Criterion 1: Price/Performance Value Requirement: Products or services offer the best value for the price, compared to similar offerings in the market. Criterion 2: Customer Purchase Experience Requirement: Customers feel they are buying the most optimal solution that addresses both their unique needs and their unique constraints. Criterion 3: Customer Ownership Experience Requirement: Customers are proud to own the company’s product or service and have a positive experience throughout the life of the product or service. Criterion 4: Customer Service Experience Requirement: Customer service is accessible, fast, stress-free, and of high quality. Criterion 5: Brand Equity Requirement: Customers have a positive view of the brand and exhibit high brand loyalty.
  9. 9. BEST PRACTICES RESEARCH © Frost & Sullivan 2019 9 “We Accelerate Growth” Best Practices Recognition: 10 Steps to Researching, Identifying, and Recognizing Best Practices Frost & Sullivan analysts follow a 10-step process to evaluate Award candidates and assess their fit with select best practice criteria. The reputation and integrity of the Awards are based on close adherence to this process. STEP OBJECTIVE KEY ACTIVITIES OUTPUT 1 Monitor, target, and screen Identify Award recipient candidates from around the globe  Conduct in-depth industry research  Identify emerging sectors  Scan multiple geographies Pipeline of candidates who potentially meet all best- practice criteria 2 Perform 360-degree research Perform comprehensive, 360-degree research on all candidates in the pipeline  Interview thought leaders and industry practitioners  Assess candidates’ fit with best-practice criteria  Rank all candidates Matrix positioning all candidates’ performance relative to one another 3 Invite thought leadership in best practices Perform in-depth examination of all candidates  Confirm best-practice criteria  Examine eligibility of all candidates  Identify any information gaps Detailed profiles of all ranked candidates 4 Initiate research director review Conduct an unbiased evaluation of all candidate profiles  Brainstorm ranking options  Invite multiple perspectives on candidates’ performance  Update candidate profiles Final prioritization of all eligible candidates and companion best-practice positioning paper 5 Assemble panel of industry experts Present findings to an expert panel of industry thought leaders  Share findings  Strengthen cases for candidate eligibility  Prioritize candidates Refined list of prioritized Award candidates 6 Conduct global industry review Build consensus on Award candidates’ eligibility  Hold global team meeting to review all candidates  Pressure-test fit with criteria  Confirm inclusion of all eligible candidates Final list of eligible Award candidates, representing success stories worldwide 7 Perform quality check Develop official Award consideration materials  Perform final performance benchmarking activities  Write nominations  Perform quality review High-quality, accurate, and creative presentation of nominees’ successes 8 Reconnect with panel of industry experts Finalize the selection of the best-practice Award recipient  Review analysis with panel  Build consensus  Select recipient Decision on which company performs best against all best-practice criteria 9 Communicate recognition Inform Award recipient of Award recognition  Present Award to the CEO  Inspire the organization for continued success  Celebrate the recipient’s performance Announcement of Award and plan for how recipient can use the Award to enhance the brand 10 Take strategic action Upon licensing, company may share Award news with stakeholders and customers  Coordinate media outreach  Design a marketing plan  Assess Award’s role in future strategic planning Widespread awareness of recipient’s Award status among investors, media personnel, and employees
  10. 10. BEST PRACTICES RESEARCH © Frost & Sullivan 2019 10 “We Accelerate Growth” The Intersection between 360-Degree Research and Best Practices Awards Research Methodology Frost & Sullivan’s 360-degree research methodology represents the analytical rigor of our research process. It offers a 360-degree-view of industry challenges, trends, and issues by integrating all 7 of Frost & Sullivan's research methodologies. Too often, companies make important growth decisions based on a narrow understanding of their environment, leading to errors of both omission and commission. Successful growth strategies are founded on a thorough understanding of market, technical, economic, financial, customer, best practices, and demographic analyses. The integration of these research disciplines into the 360-degree research methodology provides an evaluation platform for benchmarking industry participants and for identifying those performing at best-in-class levels. About Frost & Sullivan Frost & Sullivan, the Growth Partnership Company, enables clients to accelerate growth and achieve best in class positions in growth, innovation and leadership. The company's Growth Partnership Service provides the CEO and the CEO's Growth Team with disciplined research and best practice models to drive the generation, evaluation and implementation of powerful growth strategies. Frost & Sullivan leverages more than 50 years of experience in partnering with Global 1000 companies, emerging businesses and the investment community from 45 offices on six continents. To join our Growth Partnership, please visit http://www.frost.com. 360-DEGREE RESEARCH: SEEING ORDER IN THE CHAOS

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