The document provides information about emerging tier 2 cities for business process outsourcing (BPO). It analyzes several US and international cities and compares their BPO talent pools, salaries, and major companies with shared services centers. Dallas has the largest talent pool for finance and accounting as well as human resources. Kuala Lumpur and San Jose offer more cost-effective options due to lower salaries. The document also outlines government incentives and academic collaborations that make tier 2 cities attractive locations for BPO operations.

1. Confluence 2013
Accelerating Global
Innovation
6th March 2013
Hyatt Regency Santa Clara, CA
Emerging Tier 2 Cities For BPO

2. Talent Neuron
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3. Overview
Zinnov has analyzed data for the following Tier 2 locations from a BPO domain perspective
with emphasis on F&A and HR activities
Locations
Phoenix, US Lincoln, US
Salt Lake City, US Santiago, Chile
Dallas, US San José, Costa Rica
Kuala Lumpur,
Orlando, US
Malaysia
Zinnov 3

4. BPO Related Talent and Salary
Dallas, Orlando, Phoenix and Kuala Lumpur are attractive cities with large installed talent.
However cities outside of the US are more cost effective
BPO Talent Pool and Eligible Fresh Talent Pool (in Thousands)
37 40 45
33 35
25 22
13 12 16
9 9
2 4 5 5
Lincoln San José Kuala Lumpur Santiago Phoenix Salt Lake City Orlando Dallas
BPO Talent Pool Fresh Talent Pool
BPO Talent Pool : Refers to the number of people currently employed in BPO Sector
Fresh Talent Pool : Indicates number of graduates passing out who are eligible for jobs in BPO Sector
Median Salary in BPO Sector (in Thousands of USD)
108.2 108.3
100.7 101.7
88.1 92.7
78.7 75.3 80.2
74.6
66.4 61.1
53.8 56.8 58.1 57.4
42.4 47.9
38.6
29.2 31.5
24.9
18.9 43.6 43.9 44.1 46.9
14.9 35.8
8.4 20.0
11.9
Kuala Lumpur San José Santiago Lincoln Orlando Dallas Salt Lake City Phoenix
0 to 3 Years 3 to 7 Years 7 to 10 Years More than 10 Years
Source : Zinnov Talent Neuron, U.S. Bureau of Labor Statistics (BLS), Costa Rican Investment Promotion Agency (CINDE), Chilean Association of ICT Zinnov 4
Companies (ACTI), Malaysian Ministry of Human Resource (MoHR), Interviews with Industry Experts

5. HR and F&A Talent
Dallas has highest availability of talent for both HR and F&A related activities
F&A Talent Pool Size
55%
49%
44% 45% 43%
40% 40%
29%
450 2,100 2,800 3,600 4,150 5,750 8,000 15,900
Lincoln San José Kuala Lumpur Santiago Phoenix Salt Lake City Orlando Dallas
F&A Talent Pool F&A Talent as Percentage of Overall BPO Talent
HR Talent Pool Size
29% 28%
20% 18% 20% 20%
15%
11%
450 750 950 1,650 1,800 1,800 3,750 7,950
Lincoln Kuala Lumpur San José Phoenix Santiago Orlando Salt Lake City Dallas
HR Talent Pool HR Talent as Percentage of Overall BPO Talent
Source : Zinnov Talent Neuron, BLS, CINDE, ACTI, MoHR, Interviews with F&A and HR Shared Service Center Stakeholders Zinnov 5

6. HR and F&A Salary Cost
Kuala Lumpur and San Jose are cost effective cities for BPO operations
Note: Salary and Cost Data is for talent with 3-7 years of experience
F&A Salary Cost (in Thousands of USD)
62
57 57 58
45 44 44 44 47
36
32
17 19 35 37 35 38
12 11 29
8
14
6 8
Kuala Lumpur San José Santiago Lincoln Orlando Dallas Salt Lake City Phoenix
HR Salary Cost (in Thousands of USD)
60
56 56 57
44 43 43 43 46
34 35
18 20 34 36 35 37
13 12 28
9
15
6 9
Kuala Lumpur San José Santiago Lincoln Orlando Dallas Salt Lake City Phoenix
Minimum Median Maximum
Source : Zinnov Talent Neuron, BLS, CINDE, ACTI, MoHR, Interviews with F&A and HR Shared Service Center Stakeholders Zinnov 6

7. Peer Companies
The following companies have set up their F&A and HR operations in the five focus locations
Non - Exhaustive
Dallas Lincoln Orlando Phoenix Salt Lake City
F&A Contact Centers F&A F&A F&A
• Frontier • Dell • Chase Card Services • Honeywell • Goldman Sachs
Communications
• Gallup • Charles Schwab & Co • Silicon Valley Bank • Convergys
• Jack Henry & • Hamilton Contact • SunTrust Bank • NCO • CallAssistant
Associates Center Services
• The Hartford • American Express • CST Global
• Banctec • Verizon Wireless Financial Services
• USAA • Corelogic BPO
• Deloitte Group
• QBE First • Bank of America • Metasource
• Aegis • BNY Mellon
• Cognizant F&A and HR Activities
F&A and HR • Wells Fargo Auto
Finance Corp F&A and HR • Advantage SBS
• Borden Dairy
• CNA Insurance • Core 3 • C3/CustomerContact
• Oasis Outsourcing Channels
Companies • Stream Global
• Allsec Technologies Services
• Allstate Insurance
• Popular Community • Xerox
Bank • ADP
• National Financial • Accenture
Resources
F&A and HR
• Siemens Global
Shared Services
Source : Zinnov Talent Neuron, Literature Analysis Zinnov 7

8. Peer Companies
The shared services ecosystem is mature in both Kuala Lumpur and San Jose, with a strong
peer group footprint
Kuala Lumpur San José
Company Name Key Services Company Name Key Services
BHP Billiton - Kuala Lumpur Citi Shared Services F&A
Financial and HR services
Shared Services Centre
DKSH Shared IT Services Amway F&A
Robert Walters Shared Services recruitment division Intel HR
IT, Finance operations, HR services,
Shell Customer Service, and Contracts & Dole Shared Services HR, F&A, Procurement
Procurement
Steelcase- Global Shared Procter & Gamble HR, F&A
back office services
Services Kuala Lumpur
Western Union F&A
AIG Global Services IT, F&A
Standard Chartered Bank F&A Pacific West Site Services F&A, IT
Air Products F&A
Bombardier Transportation F&A
schlumberger F&A
British American Tobacco IT Shared Services
United Nations
F&A
Development Programme
BP (Asia Business Service
F&A
Centre)
Source : Zinnov Talent Neuron, Literature Analysis Zinnov 8

9. Advantages
There are several advantages of moving operations to Tier 2 locations
Government Incentives Advantages Salary Cost Savings
Various tax sops and other Emerging locations have a
financial incentives are provided relatively lower wage rates
by the local government to leading to increased cost savings
encourage investments
4 1
Academic Collaboration Talent Attraction
Organizations establish lucrative 3 2 It is easier to attract talent to an
collaborations with academic emerging location from larger
institutes situated in and around cities due to lower cost of living
tier 2 cities to attract top talent and better living standards
Source : Zinnov US Tier 2 City Analysis Report, Interviews with Industry Experts Zinnov 9

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