Establishing a Customer Support CentreA cost/quality comparison(Based on information from the Financial Times fDi Benchmark tool – April 2012)

Competitiveness of Scottish Central Belt

Value for Money

Overall Attractiveness

Quality of the Location

Annual Operating Costs

Quality Competitiveness

General Business Environment

Labour Availability and Quality

Presence of an Industrial Cluster

Infrastructure and Accessibility

Living Environment

Contents

The following analysis is based on fDi Benchmark, an online location benchmarking tool provided by

the Financial Times (FT)

fDi Benchmark compared Scottish Central Belt with the leading locations globally for Customer Support Centres

based on an analysis of over 55 quality factors and 10 cost factors

A key emphasis was placed on:

- Presence of industrial cluster

- Labour availability and quality

- Infrastructure and accessibility

Other factors including the living environment and general business environment were also

assessed

Benchmarking Study

Project Profile Overview

Cost Factor Usage Amount

Property  

Total Occupancy cost (in town office rent) 3,500 m²

Telecoms  

National Call 2,700,000 Mins

Intl Call to US (International Call) 1,000,000 Mins

Intl Call to France 1,000,000 Mins

Intl Call to Germany 1,000,000 Mins

Intl Call to Italy 1,000,000 Mins

Intl Call to Sweden 1,000,000 Mins

Intl Call to China 1,000,000 Mins

Intl Call to Singapore 1,000,000 Mins

Intl Call to India 1,000,000 Mins

Intl Call to Brazil 1,000,000 Mins

Intl Call to Mexico 1,000,000 Mins

Weighting Model Overview Weight

Presence of an Industrial Cluster 40

Labour Availability and Quality 35

Infrastructure and Accessibility 15

Living Environment 5

General Business Environment 5

Employee Type Profile Head count

General Management  Business Unit Manager 1Project Manager 15Marketing  Customer service rep 280Customer Services Manager 25Head of Customer Services 1Administration  Facilities/Office Services Specialist 20Secretary 8

fDi Benchmark Matrix

The fDi Benchmark Matrix shows the trade off between cost and quality across the 8 selected locations for the Customer support centre profile. The average cost and quality score is 100 for the selected locations.

Source: fDi Intelligence, from the Financial Times Ltd

The ‘ideal’ quadrant is the

top left

(high quality/lower operating costs)

fDi Benchmark Matrix

• The matrix is based on the weighting and cost model for the Customer support centre profile. The weighting model identifies the key location criteria for the project and the cost model shows the primary cost inputs for the operation. The cost and quality scores are calculated using real data on all the location requirements and cost inputs.

• The results indicate the different location solutions for the investor as follows:

• The Scottish Central Belt offers higher quality at lower cost than the average of all the selected location

• Amsterdam, Barcelona offer higher quality but at higher cost

• Belfast, Cardiff, and Manchester offer lower cost, but at lower quality

The Operating Cost value is in GBP - United Kingdom Pound

Location Qualitative ScoreOperating Cost

IndexOperating Cost

Value

Amsterdam 104.6 114.7 19,379,243

Barcelona 157.3 108.4 18,316,694

Belfast 73.2 83.4 14,091,752

Cardiff 69.1 87.6 14,797,931

Cork 50.7 103.9 17,568,902

Dublin 95.6 116.0 19,600,129

Manchester 99.5 98.3 16,615,809Scottish Central Belt 148.5 87.8 14,847,214

Source: fDi Intelligence, from the Financial Times Ltd

Location Attractiveness Index

The location attractiveness index shows the overall attractiveness of the 8 selected locations for the Customer Support Centre profile. The ratio of quality to cost is 50:50

Source: fDi Intelligence, from the Financial Times Ltd

Cost Quality Competitiveness

The cost quality competitiveness uses the results of the fDi Benchmark Matrix to show the value for money of each location option. The graph shows that:

The top locations offering the highest quality for a given level of cost are the Scottish Central Belt and Barcelona The Scottish Central Belt and Barcelona offer an above average level of quality and good value for money as there

relative quality is higher than their relative cost.

Source: fDi Intelligence, from the Financial Times Ltd

Cost Competitiveness

The annual operating cost calculation for Customer support centre is based on the following primary input costs: Labour Cost, Property and Telecoms

The average cost across the selected locations for Customer support centre is GBP16,902,208 The greatest cost saving between the selected locations is GBP5,508,378 per annum The values in the chart below are in GBP - United Kingdom Pound

Source: fDi Intelligence, from the Financial Times Ltd

Cost Competitiveness

Location Labour Cost Property TelecomsAmsterdam 17,189,162 1,208,931 981,149Barcelona 14,093,057 2,443,369 1,780,266Belfast 11,170,782 811,750 2,109,218Cardiff 11,500,083 1,188,629 2,109,218Cork 15,003,150 786,370 1,779,380Dublin 16,565,365 1,255,383 1,779,380Manchester 12,955,249 1,551,341 2,109,218Scottish Central Belt 11,293,641 1,444,354 2,109,218

The locations with the lowest operating costs are Belfast and Cardiff

In terms of the individual cost factors, the locations with the lowest costs are:

Labour Cost: Belfast and the Scottish Central Belt Property: Cork and Belfast Telecoms: Amsterdam and Cork

The values in the table below are in GBP - United Kingdom Pound

Source: fDi Intelligence, from the Financial Times Ltd

Quality Competitiveness

The quality competitiveness assessment is based on the weight model for the Customer support centre profile which assesses each location across the following location factors: General Business Environment, Labour Availability and Quality, Presence of an Industrial Cluster, Infrastructure and Accessibility and Living Environment. The average score for the selected locations is 100.

The locations with the highest quality scores are the Scottish Central Belt and Barcelona

Source: fDi Intelligence, from the Financial Times Ltd

Quality Competitiveness

Location

General Business

Environment

Labour Availability and

QualityPresence of an

Industrial ClusterInfrastructure

and AccessibilityLiving

EnvironmentAmsterdam 4 22 46 27 5Barcelona 3 71 59 18 6Belfast 5 20 33 10 5Cardiff 5 21 28 10 5Cork 5 18 12 11 5Dublin 5 30 41 14 5Manchester 6 42 31 16 5Scottish Central Belt 6 56 70 12 5

In terms of the individual quality factors, the locations with the highest scores are:

General Business Environment: Manchester and the Scottish Central Belt Labour Availability and Quality: the Scottish Central Belt and Barcelona Presence of an Industrial Cluster: the Scottish Central Belt and Barcelona Infrastructure and Accessibility: Amsterdam and Barcelona Living Environment: the Scottish Central Belt and Barcelona

Source: fDi Intelligence, from the Financial Times Ltd

General Business Environment

13

The quality competitiveness breakdown for General Business Environment for the Customer support centre profile is shown below

The locations with the highest overall scores for General Business Environment are Manchester and the Scottish Central Belt

Source: fDi Intelligence, from the Financial Times Ltd

General Business Environment

LocationEconomic growth

and stabilityOperating risk

Taxation and incentives

Regulatory environment

Amsterdam 1.31 0.57 0.46 1.63Barcelona 1.61 0.52 0.37 0.96Belfast 0.70 2.55 0.47 1.76Cardiff 0.55 2.55 0.47 1.76Cork 0.68 1.34 0.64 2.19Dublin 1.15 1.34 0.64 2.19Manchester 1.15 2.55 0.47 1.76Scottish Central Belt 0.86 2.55 0.47 1.76

In terms of the individual quality criteria within General Business Environment, the locations with the highest scores are:

Economic growth and stability: Barcelona and Amsterdam Operating risk: Manchester and the Scottish Central Belt Taxation and incentives: Dublin and Cork Regulatory environment: Dublin and Cork

Source: fDi Intelligence, from the Financial Times Ltd

Labour Availability and Quality

The quality competitiveness breakdown for Labour Availability and Quality for the Customer support centre profile is shown below

The locations with the highest overall scores for Labour Availability and Quality are the Scottish Central Belt and Barcelona

Source: fDi Intelligence, from the Financial Times Ltd

Labour Availability and Quality

LocationOverall size of labour market

Tightness and competition for

labour

Experienced industry-specific

staff

Flexibility of labour regulations

Amsterdam 10.64 2.08 4.49 5.16Barcelona 53.40 5.72 8.27 4.07Belfast 8.14 2.63 1.52 8.04Cardiff 8.05 2.91 1.94 8.04Cork 5.48 4.22 0.85 7.32Dublin 13.16 4.00 5.05 7.32Manchester 27.67 3.53 2.38 8.04Scottish Central Belt 27.46 2.92 17.49 8.04

In terms of the individual quality criteria within Labour Availability and Quality, the locations with the highest scores are:

Overall size of labour market: Manchester and Barcelona Tightness and competition for labour: Barcelona and Cork Experienced industry-specific staff: the Scottish Central Belt and Barcelona Flexibility of labour regulations: Manchester and the Scottish Central Belt

Source: fDi Intelligence, from the Financial Times Ltd

Presence of an Industrial Cluster

The quality competitiveness breakdown for Presence of an Industrial Cluster for the Customer support centre profile is shown below

The locations with the highest overall scores for Presence of an Industrial Cluster are the Scottish Central Belt and Barcelona

Source: fDi Intelligence, from the Financial Times Ltd

Presence of an Industrial Cluster

Location Size of industry Track record

Amsterdam 45.15 0.80

Barcelona 27.27 31.53

Belfast 12.88 19.68

Cardiff 14.44 13.34

Cork 2.90 9.38

Dublin 11.63 29.63

Manchester 21.14 10.23

Scottish Central Belt 40.59 29.40

In terms of the individual quality criteria within Presence of an Industrial Cluster, the locations with the highest scores are:

Size of industry: the Scottish Central Belt and Amsterdam Track record: Barcelona and Dublin

Source: fDi Intelligence, from the Financial Times Ltd

Infrastructure and Accessibility

The quality competitiveness breakdown for Infrastructure and Accessibility for the Customer support centre profile is shown below

The locations with the highest overall scores for Infrastructure and Accessibility are Amsterdam and Barcelona

Source: fDi Intelligence, from the Financial Times Ltd

Infrastructure and Accessibility

LocationAccess to major

overseas marketsQuality of utilities

Quality of ICT infrastructure

Amsterdam 14.55 5.69 7.12

Barcelona 8.86 5.88 3.21

Belfast 2.42 4.13 3.65

Cardiff 4.13 4.13 2.12

Cork 4.20 3.95 2.85

Dublin 7.31 3.95 3.12

Manchester 7.62 4.13 3.75

Scottish Central Belt 4.93 4.13 2.68

In terms of the individual quality criteria within Infrastructure and Accessibility, the locations with the highest scores are:

Access to major overseas markets: Amsterdam and Barcelona Quality of utilities: Amsterdam and Barcelona Quality of ICT infrastructure: Amsterdam and Manchester

Source: fDi Intelligence, from the Financial Times Ltd

Living Environment

The quality competitiveness breakdown for Living Environment for the Customer support centre profile is shown below

The locations with the highest overall scores for Living Environment are the Scottish Central Belt and Barcelona

Source: fDi Intelligence, from the Financial Times Ltd

Living Environment

LocationCost of living

Attractiveness for international staff

Amsterdam 2.17 2.78

Barcelona 2.11 3.55

Belfast 2.67 1.96

Cardiff 2.66 2.01

Cork 2.53 2.17

Dublin 2.39 2.67

Manchester 2.69 2.40

Scottish Central Belt 2.78 2.46

In terms of the individual quality criteria within Living Environment, the locations with the highest scores are:

Cost of living: the Scottish Central Belt and Manchester Attractiveness for international staff: Barcelona and Amsterdam

Source: fDi Intelligence, from the Financial Times Ltd

To realise the potential,please contact:

Scottish Development International150 Broomielaw, Atlantic Quay Glasgow G2 8LU Scotland, UK T +44 141 228 2828F +44 141 228 2089www.sdi.co.uk

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