ClientLogic and Sitel Emerge as Sitel
Sitel and ClientLogic, two leading providers of business process outsourcing, have completed the merger they announced in October 2006 and have taken the name Sitel. The combined entity is a single provider with 65,000 associates at more than 145 facilities in 28 countries, serving 3 million contacts per day. Its new brand strategy includes the expected new logo and revamped executive team, but also includes a newsletter for associates and clients to increase industry awareness, and a Web site detailing Sitel's commitment to bring its accumulated back-office expertise to market.
"This merger was not about combining two great companies to form one large company," said David Garner, president and CEO of Sitel, in a recorded message to employees. "The merger was about taking two great companies and creating the best." The decision to use the Sitel name was based on Sitel's superior customer reputation, This will play into building the new brand as Sitel introduces new services and methods for outsourced customer care, Garner said.
There is significant growth potential in the BPO market, with 85 percent of customer care functions worldwide performed in-house. IDC expects the global customer care BPO services market to grow from $51.4 billion in 2005 to $92.2 billion by 2010. Sitel's global presence will serve it well in this case; Garner said that 78 percent of Sitel's revenue will come from outside North America.
Elizabeth Herrell, a vice president with Forrester Research, says the merged company is poised for considerable success in the current market. "It made better business sense for ClientLogic and Sitel to merge, allowing them to leverage their investments and grow more efficiently, rather than in competition," she says. The old Sitel's expertise in verticals like financial services combined with ClientLogic's in communications makes for a comprehensive offering. "Among outsourcers, ClientLogic and Sitel really got it when it came to multi-channel BPO solutions. Each company was strong; as a combined company they're really strong. Look at companies like Convergys--Sitel will be right behind them."
It's possible that current conditions and the emergence of a strong Sitel will spark a consolidation trend in the BPO market. "There are at least 50 named outsourcers in a position to cut a deal. If they make intelligent mergers, it will be good business sense," Herrell says. Should that happen, Sitel will be challenged to excel both at managing its larger chunk of turf and keeping up quality as it grows. "If they don't, smaller companies can come in and show customers they can do it better."
Despite the possible threat of revamped competition, Herrell says Sitel's structure leaves it safe from great harm. "Sitel has a good, diverse clientele. Even if they should lose a client, they don't have to worry about losing revenue because of it. No one client makes up that much of the revenue stream."
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