AWS has joined the generative AI march, recruiting third parties to host models on its cloud. Also, Bandwidth has released its Maestro platform, positioning it as the connectivity fabric that allows businesses to bridge the gap between best-of-breed CCaaS and UCaaS tools. And recently, Concentrix announced its plans to roll up fellow BPO Webhelp. Everest Group estimates that the Webhelp acquisition will result in Concentrix enjoying a market share of between 6-8%.
Digital Compliance
2022 has proven to be a constantly shifting and unpredictable year for outsourcing services. The first half witnessed an unprecedented demand surge accompanied by cost and price inflation, and the second half saw a slowdown in client decision-making with fears of a recession.
In this webinar, Everest Group’s pricing experts will analyze the trends observed this year and deliver the pricing outlook for IT and BPO services in 2023.
Our speakers will discuss:
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The planned merger announced last month between Konecta, the leading provider of Spanish-speaking Customer Experience solutions, with Italy-based customer management provider Comdata will create the sixth-largest player by revenue in the customer experience Management (CXM) BPO sector. This consolidation will intensify competition in the attractive CXM market, with the combined entity commanding close to €2 billion in revenues and €300 million in EBITDA. Read on to find out what this big deal will mean.
Comdata
Global CXM provider Comdata offers end-to-end management solutions (acquisition, retention, customer service, technical support, and credit collection) in 30 languages across four continents and 21 countries with its network of 50,000-plus agents. Headquartered in Milan, it served more than 670 clients in 2021, generating revenue of approximately €980 million.
Konecta
Konecta, acquired by Pacheco together with the company’s management team in 2019, is a leading tech-enabled end-to-end CX BPO player in the Spanish-speaking markets. It has successfully integrated different companies such as the Brazilian Uranet and the Spanish Rockethall group, reinforcing the company’s leadership in Artificial Intelligence, digital marketing, and big data solutions. In 2021, it generated revenue and EBITDA of approximately €918 million and €148 million, respectively.
Combined entity
Subject to approval by authorities, the merger is expected in the third quarter of 2022, creating a global CXM leader capable of providing the “best shoring solution” to local, regional, and global clients in 30-plus languages across industries such as finance and insurance, technology, telco, retail and e-commerce, utilities, and healthcare.
The combined entity will be headquartered in Madrid (Spain), jointly chaired by the CEOs of Konecta and Comdata. It will serve more than 500 large corporations across Europe and America, leveraging the expertise of 130,000-plus employees. According to a statement by the companies, “the new group has a solid financial structure and will take advantage of its position in Spain, Latin America, Italy, and France to deploy all its commercial and operational capacity in its strategic markets. In addition, it will have additional capabilities to fuel its growth in the North American market and throughout Europe.”
The advantages of this deal are:
With US$2 billion in revenue and 130,000 agents, the combined entity gives tough competition to other global CXM providers such as Teleperformance, Sitel, and Concentrix. Below is a look at the capabilities of these global providers in comparison to the combined entity.
Teleperformance | Sitel | Concentrix | Konecta+Comdata | |
Revenue | US $8.4 billion | US $4.3 billion | US $6 billion | Approx. US $2 billion |
FTEs | 420,000+ | 160,000+ | 290,000+ | 130,000+ |
Languages | 265+ | 50+ | 70+ | 30+ |
Countries served | 170 | 40 | 40+ | 24 |
Although organizations have the best intentions to use mergers and acquisitions to supplement their organic efforts, they generally underestimate the risks such as failure to achieve synergies, lack of due diligence, and security and integration challenges. Business leaders have often recognized people, culture, change management, and communication as the top reasons for integration failure. Lack of adequate change management policies can affect the organization’s governance and accountability structure, cause stress and uncertainty for employees, and decrease productivity for businesses, ultimately impacting service quality and timely delivery.
With Sitel’s acquisition of Sykes and Webhelp’s acquisition of OneLink BPO and Dynamicall in 2021, the trend of consolidation among CXM market players is gaining traction. Consolidation enables service providers to work with large clients across multiple delivery countries and end markets, a capability that is rising in importance for CX clients. It also enhances service offering portfolios and technology capabilities by serving as a one-stop-shop for buyers for all CXM needs.
This deal also represents an opportunity for buyers to reexamine their vendor portfolio since certain service providers might now be better positioned to support their clients across multiple locations and processes, representing an opportunity to optimize their portfolio with fewer providers to achieve operational and cost efficiencies.
To discuss the CXM market landscape, please reach out to David Rickard, Vice President, BPS, [email protected], Divya Baweja, Senior Analyst, BPS, [email protected], or contact us.
You can also learn how expanding and developing businesses are attracting technology-focused workers to help execute existing and evolving digital transformation, adopt new processes, and innovate. Join our webinar, How to Effectively Attract and Drive Productivity within the Tech Workforce.
Access the on-demand webinar, which was delivered live on January 20, 2022.
Today’s rapidly changing business environment, influenced by economic, demographic, societal, and environmental forces, is causing enterprises to revisit their Business Process Services (BPS) model and strategy – making the role of BPS 4.0 crucial for success.
In this on-demand webinar, our experts will capture five success-driving imperative actions for enterprises that should be incorporated into their 2022 planning, and beyond.
Our experts address the following topics:
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