Smart TunisiaYour talent HubFor Europe, the Middle East and Africa

London, October 20th

Raouf Mhenni, President

5 major industry drivers to be considered

Business integration

• Increasing focus on process integration and efficiency

• Outsourcing as a driver of innovation & knowledge

Re-shoring / Near shoring

• Increasing trend to review shoring distribution and consider nearshoringlocations

• Several raised issues: dissatis-faction, rising costs, data protection issues,.. )

Need for global

delivery Capabilities• Extension

and scalability of global delivery capabilities : a strategic growth enabler

• Emergent Hub & Spoke and Smart Shoring models

Market access

• Newly, a key decision factor for offshoring location strategy

• Upcoming growing market : Africa

New markets & Niches

• Emergent market segments and niches

• Innovation driven by business analytics and knowledge process outsourcing (KPO)

New developed delivery models to be “Close to Customers”, gain capabilities and mitigate risks

Source : Deloitte’s 2014 Global outsourcing and Insourcing survey

Need for global

delivery Capabilities• Extension

and scalability of global delivery capabilities : a strategic growth enabler

• Emergent Hub & Spoke and Smart Shoring models

Multi-locations sourcing model

Front-Office / Back-Office organization

Hub & Spoke model with regional Services Centres

Partnership with providers in a hybrid model

Co-delivery models

Free Lance outsourcing

Sub-contracting

Same Time Zone

Access to Talents pool

& skills

Multi-langages

skills

Service continuity

Risk mitigation

Process efficiency

Provider expertise & capabilities

Market access & proximity

Fast growing start ups

Large local companies

Small & Medium Size companies / providers

Large Corporations

Global / Leading outsourcing players

An ample room for industry growth at different maturity levels

Practice maturity

Size

• From regional to global Shared service centers

• Delivery capabilities extension

• Sophistication

• Market access • Set up of Shared service centres• Global delivery extension

• Scale up

Switch from Cost - driven to Quality - driven attractiveness

Cost factors

Business environment

Quality / conditions factors

Low Medium HighHigh Medium Low

Criteria importanceCriteria importance

Low technicity / Added-value High technicity / Added-value

Risk factors

Quality

Costs factors

Business environment

Talent pool availability - Key profiles

Intellectual property protection

Infrastructures - Offices

Sector maturity / size

Labour cost- Operators

Labour flexibility

IT Infrastructures – telecom / Cloud / …

Quality of life

Market

Tax rates

Low Medium high

BPM ecosystem

BPO -hightechnicity

New decision factors for BPO attraction

Risk

Labour cost- Supervisor / manager

Langages skills

Economic Risk

Corporate Risk

Energy risk

• X

FOR SMART SHORING

• X

Employees in offshoring sector 2015

Join an active offshoring ecosystem

+35 000

• A Leading position in BPO voice for French market

• Recent development in Italian Market

• Well established industry leaders with more than 10 Years presence

• An active ecosystem to enhance sector maturity : clusters, business partners, ambassadors, industry network,…

• X

Percentage of population with tertiary education

Available Offshore Ready Talents…

35%

Quality of Teaching Mathematics and Science1=poor, 7=excellent – among the best in the

Availability of Engineers and Scientists1=Zero, 7=Widely available

2,4

4,14,24,44,54,74,75,24,04,24,24,44,64,74,84,8

Source: World Competitiveness Report: WEF 2015

322 000 students60 000 graduates

per year 12 000 ICT graduates

9 000 Business administration

6 000 graduates in Life Sciences &

Healthcare

20 000 Engineers & scientists

A high-quality infrastructure

Tunisia is the Second country in the southern Mediterranean region and Africa, 81th among 143 countries in the “Networked Business Index” published by the “Global Information Technology Report 2015” in Davos

11 cyber parksSpread over several regions and

covering various specialties

10 operational techno-parks

“Leading country in the Southern Mediterranean region in term of Telecom infrastructure”

Networked Readiness Index-Global Information Technology Report

• X

Rent cost per M2

A world class infrastructures

8€

• Developed Label for Offices

• 500 000 m2 Offshore Ready Offices to be developed in the next 3 years

• A mixed offer of: • Techno-parks , • Dedicated real estate offers for

outsourcing• Individual real estate projects

A strong legal framework for investment

Investor protection index

A new investment code which further encourages high added-value activities, and improves the business environment

3,74,75,05,3

6,06,06,06,0

Source: World Economic Forum 2014-2015

• X

most cost effective in north-Africa, and 40-50% than Eastern Europe

A competitive destination

20-30%

• X

Support to training for new hires

Smart Tunisia a comprehensive incentive framework

5 000 TND

Tax regime for offshoring companies: Income tax of 10% for offshoring

companies instead of 25% Framework of double taxation

agreements

Incentives granted by Smart Tunisia:

Support for the cost of trainings and of new recruits, first time job seekers, of up to 5 000 TND for any new hire

A recruitment allowance for the first seven consecutive years with a celling of 700 TND per year for each first-time job applicant

176154

72

71

68

65

64

62

6059

33

20

Mauritania

Algeria

Egypt

Morocco

Albania

Croatia

Cyprus

Russia

Tunisia

Luxembourg

Spain

Switzeland

Source: Doing Business database 2015

Ease of doing business ranking

“Leader in North Africa in Business Climate”World Bank Doing Business 2015

50000

Innovation

EMEA Hub

Nearshore

Attractive destination for knowledge intensive and high-added value activities

Talent hub for delivery capabilities and access to EMEA Market

A leading offshoring destination for the French speaking market

A Nearshore destination for services outsourcing (ITO,BPO, R&D & Knowledge)

Jobs creation in the next 5 years

SMART TUNISIA : 3 strategic dimensions for Tunisian value proposition

• X

~ 3 200 foreign companies settled in Tunisia (Manufacturing & Services)

They Trusted Tunisia

40 000

BPO

ITO

R&D / Know-ledge

• X

More than 30 000 European expats

Small but Smart Tunisia

+30 000

Ongoing stability & Democratic transition

Favorable position for women that is unique in the Arab world (61% of graduates)

Diversity of Cultural & Leisure events

Presence of international schools and universities

Healthcare system comparable to Western European countries

Emergent & active civil society

• X

THANK YOU

Appendix

• Highly skilled Tunisians in Management and business development positions of large corporates & SMEs

• Provide with a pool of skilled and offshore ready talents in Tunisia & Europe

• Multi-languages skills• Emergent young entrepreneurship

Our Tunisian Offer as Offshoring location

Close to Customer

Smart Shoring

Talents hub in EMEA

• Same Time Zone as Central Europe • Goof flights connection to Europe• Cultural proximity, • Close collaboration with customers teams

(for digital projects)

• Provide with added-value services and knowledge

• Be positioned in the Hub & Spoke model of major players in EMEA

• Address SME business • Co-deliver with other offshoring locations

( Indian / EMEA)• Develop expertise in 4-5 verticals / clusters

Talents

Hub

EMEA Market

Nearshore

Innovation

A continued industry growth with challenging changes and large opportunities

Business models ( Captive vs Outsourced

vs hybrid models)

Digital transformation projects versus

industrial offshoring projects

Global labor market

Competition landscape Delivery models Offshoring location

strategies & key decisions factors

• X

Less than 3 H to reach almost European cities

Strategically located destination close to all major European capitals

3

Paris 2h10

London 2h50

Milan 1h10

Stockholm 3h30

Tunis

Francfort 2h30

Madrid 2h00

Same time Zone with Central Europe

Good flights connection to major european cities

More than 40 flights a day to Europe from Tunis

• X

Offshoring wage inflation rate 7-12%

30% cheaper than Morocco , 50% cheaper than Eastern Europe

Productivity : 6-8 € per hour for added-value activities vs

6€ per hour for traditional industrial offshoring

Beginning Data scientist / Engineer Gross monthly salaries: 900-1100 USD

BPO

ITO

R&D / Know-ledge

Quality

Costs factors

Business environment

Talent pool availability ( Engineers & Scientists)

Intellectual property protection

Quality of education system / universities

Sector maturity & Similar existing activities

Labor cost- Engineers - Senior profile

Labor flexibility

Clusters / innovations ecoystems

Quality of life

Infrastructures

Tax rates

Low Medium high

Knowledge of the location

R&D

R&D decision factors mainly based on knowledge ecosytem

Labor cost- Engineers - junior profile

Risk

Economic Risk

Corporate Risk

Energy risk

Rising destinations

Asian challengers ( e.g. Sri Lanka)

2nd & 3rd tier cities

Eastern Europe ( Bulgaria, Serbia,..)

Sub-Saharian Africa locations ( Senegal / Ivory Coast)

Central & Eastern Africa (Ghana / Kenya)

India / Philippines

Central & Eastern Europe

1st tier Cities / Hotspots

Northern Africa

Mauritius / South Africa

An increasingly changing competition in EMEA outsourcing market

Practice maturity

• Leading destinations• Mature industry

• Emergent locations (Challengers) • Social pressure leading to On

Shore locations• Upcoming markets

• Start up locations in offshoring industry / Niches

• X

Targeted labels

…to extend your delivery capabilities

100 000

• Several initiatives to enhance Talents Pool : • Co-graduation with major international universities • Specialized training centers (aircraft maintenance, training for call

center agents, etc.)• 100 000 Certifications program• 5000 Managers program• TACT / ESPRIT training program developed for BPO / ITO industry• Launch of Conversion program : 25 000 reskilled talent pool • More than 30 000 researchers in ~700 laboratories and research units

Highest level of operational FrenchOutside countries with French as mother tongue: 28% of the population is fluent in French

Generalized EnglishTaught in schools starting from the age of 8

Language TrainingCertified and provided by cultural centers:German, Spanish, Italian, etc. ..

Some Smart Shoring Cases

>75 % of the offshoring jobs created by Top 50 players only

75%

• Evolution from BPO to ITO • Captive SAP delivery centre working

closely with USA centr• Talents pool extension model

( Multi-locations projects resources)

• Project driven by Tunisian Expatriate in France

• 260 engineers • Talents pool extensions with

Tunisian resources • Extension to IT support service to

French site• Developed training courses with

universities

• Actia group present in Tunisia with production and R&D activities

• 250 FTEs reached in 5 Years, Planned 400 FTEs extensions in 3 Y

• Reference centre in Actia group• Offshore Design center of INTEL for embedded

systems

• 170 FTEs• Document Management outsourcing• Management of Complex contracts not

addressed by Vitenam & Mauritius Sites• Potential extensions BPO & ITO

• R&D Center specialized in E-Book industry • Design , testing and implementation of

technology systems and platforms related to E-Book

• Wide range of technologies • 35 engineers R&D center rapidly set up

• Smart Shoring : 2 sites in France, 4 sites in Tunisia

• Serve Canadian & French market

• 1500 FTEs • 24/7 service center • Potential extension of 900

positions in 3Y

Recent implementation of SME in Tunisia as entry point to Europe (targeting in a part major Fench Retail players)

DigitalMania won the first place of the PITME program. PITME welcomes young MENA entrepreneurs, and facilitate their immersion in the capital of global innovation, the famous Silicon Valley, San Francisco.