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Stream Global Services Inc. (OOO) Customer Service is Not Dead

As the world economy begins to find its footing after recent economic events, companies are increasingly looking at costs and how to reduce and control them. In past years, capital was cheap and many institutions let capital flow with little regard for cost controls. Although this was poor judgment, it was nonetheless common practice. Today, however, cost controls are a very much needed necessity to be accomplished in a variety of ways. A company that can aide in achieving these goals is one that could be very profitable. As this reality settles in, these types of companies will become more prevalent if they are among the first to establish themselves.

Stream Global Services Inc., an outsourcing services company (18 countries/33 services centers/ 17,000 employees), works to provides additional or required backroom services to companies worldwide. The company offers its services worldwide, but is headquartered in the United States.

Stream appears to be a company that has been noticed. Currently working through a merger, the company appears to have found a footing among management control companies. Although technical support service is a large portion of the company’s business (65%), it does delve into other aspects where there may be opportunity for additional growth. Currently, customer service represents 20% of business while revenue generation provides 10%. Although one might suspect the services business’ sales have suffered under current conditions, the company has indicated new contracts and business in the latter part of 2009 while a pending merger is now underway.

Asking for a company statement, Stream Global responded, “The combination of Stream Global Services and eTelecare brings together two strong forces in the industry, creating what we believe will be an unparalleled BPO services organization with world-class services for our valued clients. The new Stream Global Services will have a projected combined revenue for 2010 of approximately $1 billion and a global presence across North America, Europe, Philippines, India, Latin America, Middle East and Africa

There are issues regarding consumer response, but in a general sense the company can continue to rely on the need for customer service. Gross profit has increased over 15% in the first part of 2009 while head count and equipment cost (the major cost component of the company) has remained in relative line. As Stream Global moves forward it does appear that growth is coming. There may be a certain consumer backlash to Indian influence, but in an overall business perspective the company looks to be well positioned to benefit from the realities of today’s business.

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