Overview of Shared Services Globalization in APAC

7/27/2019 Overview of Shared Services Globalization in APAC

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Overview of Shared Services Globalization in APAC

(Executive Summary)

October 2013

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2/13

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1 Overview

2 Captive Trends(Available in Full Report)

3F&A Landscape & F&A Globalization

(Available in Full Report)

4

HR Globalization and Sales Operation


Topics Covered in the report

3

5Procurement


6Business Function Talent Pool Split


7Case Examples


8Key Challenges



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4Talent 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 thathave traditionally been closer to business

i.e. R&D, Engineering, Sales & Marketing,

Analytics etc

Impact Level

Cost Savings

Enhancing efficiencies throughstandardization of services & processes

Support corporate strategy

Enable flexible growth

Access to talent

Insights

Access to new markets

Key Drivers for Shared Services Globalization


5/13

5Talent 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

Globaliz

ationRate

Process such as lead identification, requirement

analysis and delivery management are expected

to be increasingly globalized

Today companies have maturedglobalizing their R&D and IT

activities

Globalization Maturity of various functions

LOW

HIGH

R&D*

Sales


6/13

6Talent Neuron

Overview

Countries across APAC, EMEA and LA are preferred locations with their unique advantages

and disadvantages

Source: Talent Neuron

Key Cities

IrelandEastern 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

EgyptCosta Rica

Sri Lanka

South Africa

- Colombo

- Shanghai

- Beijing

- Glasgow

- Wuxi

- So Paulo

- San Jos


7/137Talent 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

IrelandAustralia

Spain

New Zealand

Singapore

Turkey

Brazil Argentina

Ukraine

Costa Rica

PhilippinesChina

India

Czech Republic

Russia

Poland

Mexico

Chile

LOW MEDIUM HIGH

LOW

MEDIUM

HIGH

Cost Attractiveness

Globalization

Suitab

ility

Cost Attractiveness Vs Globalization Suitability


8/138Talent Neuron

Captive Trends

In the recent past, India has garnered a lions 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

511

80

9

India China Rest of

Asia

South

America

Africa CEE &

Russia

Ireland

& Wales

Captive centers (GICs) per geographic

region

# of Centers

2

10 6 6

2228 29

0

10

20

30

40

50

60

70

80

90

100

India China Rest of Asia CEE+Russia Others

Act iv i t ies per geographic region


9/139Talent 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

ProcessAdherence

Language

Expertise

RightLevels 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


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520 + Cities7,500 +

Companies

12,000 Unique

Data points percity

360+ Skills

20.5 Million Professionals

~3,200 Universities

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Overview of Shared Services Globalization in APAC