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The key benefits of Globalization are cost savings. However, the growing trends suggests the changing perception of Shared Services as strategic business units for service & operational excellence Create job enrichment & augment skills of internal support employees and customers of the service To meet the changing landscape of business, companies are expanding the use of shared services for processes in more complex and knowledge-oriented areas that have traditionally been closer to business i.e. R&D, Engineering, Sales & Marketing, Analytics etc
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Overview of Shared Services Globalization in APAC (Executive Summary)
October 2013
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quoted, or reproduced for distribution outside the client organization without prior written approval from Talent Neuron.
1
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Disclaimer
All the information contained in this report is obtained through proprietary technology aggregation algorithms, human experts, network of domain experts, discussions with industry leaders, public and confidential information sources believed to be reliable. Talent Neuron makes no representations or warranties regarding the errors, omissions or completeness of any information contained herein and shall have no liability for the same. The report is provided solely for informational and marketing purposes and opinions must not be construed as advice, recommendations or endorsements. The reader of the report is advised to conduct an independent evaluation and form conclusions with respect to the information provided.
1 Overview
2 Captive Trends
(Available in Full Report)
3 F&A Landscape & F&A Globalization
(Available in Full Report)
4 HR Globalization and Sales Operation
(Available in Full Report)
Topics Covered in the report
3
5 Procurement
(Available in Full Report)
6 Business Function Talent Pool Split
(Available in Full Report)
7 Case Examples
(Available in Full Report)
8 Key Challenges
(Available in Full Report)
4 Talent Neuron
Overview
Cost savings along with enhancing process efficiency are two main factors due to which companies globalize their Shared Services
Sources: Talent Neuron Quarterly Events & Talent Neuron Surveys 2012 & 2013
The key benefits of Globalization are cost savings. However, the growing trends
suggests the changing perception of Shared Services as strategic business units for
service & operational excellence
Create job enrichment & augment skills of internal support employees and customers
of the service
To meet the changing landscape of business, companies are expanding the use
of shared services for processes in more complex and knowledge-oriented areas that
have traditionally been closer to business i.e. R&D, Engineering, Sales & Marketing,
Analytics etc
Impact Level
Cost Savings
Enhancing efficiencies through standardization of services & processes
Support corporate strategy
Enable flexible growth
Access to talent
Insights
Access to new markets
Key Drivers for Shared Services Globalization
5 Talent Neuron
Overview Companies have been increasingly off shoring/outsourcing their support functions
Source: Talent Neuron
Marketing
IT*
Human Resources
Customer Support
F&A
Procurement
Sales Operations
MATURITY
Laggards Rapidly Growing Mature
Glo
ba
liza
tio
n R
ate
Process such as lead identification, requirement analysis and delivery management are expected
to be increasingly globalized
Today companies have matured globalizing their R&D and IT
activities
Globalization Maturity of various functions
LOW
HIGH
R&D*
Sales
6 Talent Neuron
Overview Countries across APAC, EMEA and LA are preferred locations with their unique advantages and disadvantages
Source: Talent Neuron
Key Cities
Ireland Eastern Europe
China
Philippines
Australia
Malaysia
Brazil
Argentina
India
Current ‘hot’ Global locations
Potential alternatives
- Metro Manila - Bangalore - Chennai - Gurgaon
- Hyderabad - Cebu City - Mumbai
- Kuala Lumpur - Selangor
- Dalian - Chengdu
- Guangzhou - Johannesburg
- Krakow
Egypt Costa Rica
Sri Lanka
South Africa
- Colombo - Shanghai
- Beijing - Glasgow
- Wuxi - São Paulo - San José
7 Talent Neuron
Overview India, Philippines and China lead the pack of countries that are suitable for globalizing Shared Services
Note: Recent dollar appreciation has enabled India and Philippines to increase the cost arbitrage
Canada
Ireland Australia
Spain
New Zealand
Singapore
Turkey
Brazil Argentina
Ukraine
Costa Rica
Philippines China
India
Czech Republic
Russia
Poland
Mexico
Chile
LOW MEDIUM HIGH
LOW
MEDIUM
HIGH
Cost Attractiveness
Glo
ba
liza
tio
n
Suit
ab
ility
Cost Attractiveness Vs Globalization Suitability
8 Talent Neuron
Captive Trends In the recent past, India has garnered a lion’s share in terms of number of Global In-house Center setups with diverse set of models
Source: Zinnov Research, Prof. Illan Oshri
146
52 52
5 11
80
9
India China Rest ofAsia
SouthAmerica
Africa CEE &Russia
Ireland& Wales
Captive centers (GICs) per geographic region
# of Centers
2 10 6 6
22 28 29
0
10
20
30
40
50
60
70
80
90
100
India China Rest of Asia CEE+Russia Others
Activities per geographic region
9 Talent Neuron
Key Challenges Attrition and lack of experienced talent with domain knowledge are key challenges companies are facing in the global centers/operations
Source: Interviews with key industry stakeholders at leadership levels, Talent Neuron
Attrition
Process Adherence
Language Expertise
Right Levels of Training
Culture and Morale
Domain Knowledge
Key Challenges
• Attrition in most companies has ranged between 8%-22% in the last 3 years
• Increased competition for talent from service providers and lower compensation levels are key reasons
• Hiring talent for translation-related jobs is difficult ,and this in turn hinders the process
efficiency • Scaling language experts to the required
level normally takes time and this impacts the quality of work.
• Lack of career progression, low compensation and minimal customer interface lead to low morale amongst
shared services employees • Employees are not culturally well aligned
to the parent organization
• Lack of domain expertise and proper understanding of regulatory, quality and
security compliance processes
• Organizations are not able to determine the right training (process training,
spoken/written language training and cultural sensitization training) programs for
their staff
• Since the industry is yet to attain maturity, companies find it difficult to hire professionals with about 8-10 years experience
10
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