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ABSL Conference in Prague Location, location, location. Demystifying the location selection process
17 October 2013
www.pwc.com
PwC
Who we are
• The SSC CoE team consists of 16 SSC Practitioners experienced in all aspects of SSC & BPO from Strategy & Feasibility, implementation and Transition, to performance optimisation and contract re-negotiation.
• The team is made up of qualified ACCA, CPA & Six Sigma staff (black belt) staff, together with staff who have worked in the big 5 BPO providers.
• The team is based in Poland and has worked with over 100 Clients in Poland, CEE and all over the Globe.
• The team has set up and run its own PwC SSC in audit in Katowice, Poland.
• Every member of the team has a deep understanding of the PwC SSC methodology. PwC has a SSC methodology that works.
• The SSC CoE team received award for the Best Professional Advisory Firm in Shared Services and Outsourcing 2013
Slide 2
PwC
EE
LT
PL
CZ
SK
HU
RO
There is a lot of choice within CEE
Slide 4
Warsaw – Citi Group, ABN Amro, Colgate Palmolive
Krakow – Shell, IBM, Capgemini, Philip Morris
Bucharest – Hewlett Packard, Procter & Gamble, Huawei
Cluj-Napoca – Office Depot, Bombardier
Debrecen – BT, Ygomi, GEM, National Instruments
Vilnius – Mirror Support Services, BDO, Barclays Bank
Tallinn – Playtech, Swedbank, Statoil
Wroclaw – Credit Suisse, UPS, IBM, HP
Prague – Accenture, DHL, Exxon Mobil, SAP
Bratislava – IBM, Henkel, KONE, Kraft Foods
Budapest – IBM, Diageo, Morgan Stanley, Citibank,
Ostrava – GE Money, Siemens, OKIN Group
Brno – IBM, Motorola, Infosys
Katowice – PwC, Capgemini, Steria
Gdansk – Arla Foods, Intel, Acxiom, Sony
Timisoara – Oracle, Alcatel Lucent, S&T Romania, Wipro
PwC
Asia
Jaipur
Mumbai – TCS, IBM, JP Morgan Chase
Pune
Bangalore – GE, Cisco, SAP
Chennai – HP, TCS, IBM
Hyderabad – GE, TCS, Genpact
Penang
Ahmedabad
Nagpur
New Delhi – TCS, Genpact, IBM
Kuala Lumpur – Shell, Accenture, Convergys, TCS
Ho Chi Minh Colombo
IND
CHN
VN
MAL
RP
CL
Dalian –Accenture, Convergys, IBM
Beijing – Accenture, Capgemini. IBM
Shanghai – Accenture, Wipro, SAP
Manilla – Accenture, Wipro, Genpact , Shell
Cebu - Accenture, Wipro, Convergys
Hangzhou
Chengdu
Davao
Changsha
Slide 5
PwC
Americas
Monterrey – Wipro, Accenture, ACS
Mexico City – SAP, Accenture, EDS
Ciudad Juarez – Genpact, ACS, S-Data Solutions
Guadalajara
Queretaro
Boise
Seattle – Accenture, Wipro, Vcare,
Indianapolis
Vancouver – Accenture, Microsoft, eBay
Ottawa – Accenture, Fusion BPO Services
Calgary Winnipeg
Recife – Motorola, Dell, Sun Microsystems
Sao Paulo – Accenture, Convergys, Hewitt Associates
Rio de Janeiro – IBM, Oracle, Satyam
Campinas
Curitiba
Santiago
Buenos Aires
San Jose
Virginia Beach
San Antonio – Accenture, Citi, BD
Panama City – Caterpillar, Heineken, CCTG
Bogota
CDN
USA
MEX
BR
RCH RA
CR
PA CO
Slide 6
PwC
PwC approach to get to a selection
Workshop discussion Feasibility & analysis
Site visits
Final selection & recommendation
•Understand the vision & key drivers
•Approx 25 locations
•Shortlist of up to 10 locations
•Down select to 2-3 preferred locations
Slide 7
Initial screening
Elimination of certain locations based on 4-5 pivotal parameters
Long list of locations
Assessment criteria
Detailed research & analysis
Site visits (optional)
Final selection
PwC
Some common criteria Labour pool
•Population / students
•Labour force
•Unemployment
• Language skills availability
• SSC/BPO centres
Other costs
• Recruitment costs
Office space
•Lease rates
•Current office availability
•Future office availability (under construction)
Location accessibility
• International airports
•Various flight connections
•Geographical proximity
Standard of living
•Living standard indices for foreigners
•Rental property costs
•International schools
Country factors
• Political stability
• Inflation
• Corruption
Labour costs •Salary costs •Additional employer
charges • insurances, taxes and
benefits •Wage inflation data
Tax and subsidy factors
•Corporate taxation
•SSC investment subsidies / EU grants
•Opportunity for tax exemptions
IT infrastructure
• IT connectivity
• Security
• IT infrastructure cost
Labour market conditions
•General unions rules
•Amount of leave entitlements
•Termination notice
• Easiness to hire & retire
Other
• Size of current business
• Potential exit
• Easiness to transfer & exit
* Different weights assigned
Slide 9
PwC
Trends and lessons
• It’s not just about labour cost
• What cities are well placed to deliver knowledge based services (KPO)?
• Secondary (or even tertiary) cities are making a play
• Considering what the city will look like in 4-5 years time
• What do we actually want to achieve from our SSC?
• Do we want to be in a hot spot location?
• Personal touch/visit can make a difference
Slide 10
PwC
Budapest/ Prague
SSC’s in the city
Slide 12
May 2012 Finance Leaders' Summit
City Overview Budapest Prague
Population 1 722 000 1 246 200
Labour pool 955 000 750 000
Number of universities 45 33
Number of students 180 000 120 100
Language availability Good Very Good
Unemployment rate 11,10% 7,5%
Office space 629 700 sqm 369 550 sqm
Current cost per sq meter for class A office space
15 – 25 EUR per sq meter per month
19 – 21 EUR per sq meter per month
Location Accessibility / International airport(s)
Very Good / Yes
Very Good / Yes
Corporate taxation 19,0% 19,0%
PwC
City Overview Brno Katowice (Silesia)
Population 384 000 310 000 (1 980 000)
Labour pool 189 000 202 371 (1 200 000)
Number of universities 15 29
Number of students 81 500 200 000
Language availability Good Good
Unemployment rate 9,54% 3,60% (10,8%)
Office space 280 000 sqm 255 800 sqm
Current cost per sq meter for class A office space
12-15 EUR per sqm per month
14,0-16,0 EUR per sq meter per month
Location Accessibility / International airport(s)
Very Good / Yes
Very Good / Yes
Corporate taxation 19,0% 19,0%
Brno / Katowice
SSC’s in the city
Slide 13
May 2012 Finance Leaders' Summit
PwC
City Overview Lviv Lublin
Population 750 000 350 000
Labour pool 500 000 231 000
Number of universities 38 14
Number of students 138 000 90 000
Language availability Moderate Good
Unemployment rate 15,00% 10,10%
Office space 150 000 sqm 120 000 sqm
Current cost per sq meter for class A office space
10 – 12 EUR per sq meter per month
9 – 12 EUR per sq meter per month
Location Accessibility / International airport(s)
Good / Yes
Good / No
Corporate taxation 25,0 % 19,0%
Lviv / Lublin
SSC’s in the city
Slide 14
May 2012 Finance Leaders' Summit
PwC
Thank you
Anna Wójt
Manager
PwC Poland
+48 519 507 593
This publication has been prepared for general guidance on matters of interest only, and does not constitute professional advice. You should not act upon the information contained
in this publication without obtaining specific professional advice. No representation or warranty (express or implied) is given as to the accuracy or completeness of the information
contained in this publication, and, to the extent permitted by law, PricewaterhouseCoopers LLP, its members, employees and agents do not accept or assume any liability,
responsibility or duty of care for any consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this publication or for any decision
based on it.
© 2012 PricewaterhouseCoopers LLP. All rights reserved. In this document, “PwC” refers to PricewaterhouseCoopers LLP (a limited liability partnership in the United Kingdom)
which is a member firm of PricewaterhouseCoopers International Limited, each member firm of which is a separate legal entity.
Slide 15