14-15 September 2016 Lisbon, Portugal #DeloitteSharedServices Deloitte Shared Services, GBS & BPO Conference Breakout 7: Selecting your location, and how to make it work Thomas Bo Jorgensen, DFDS; Elias van Herwaarden and Val Popovici, Deloitte
14-15 September 2016
Lisbon, Portugal
#DeloitteSharedServices
Deloitte Shared Services, GBS & BPO Conference
Breakout 7: Selecting your location, and how to make it work
Thomas Bo Jorgensen, DFDS; Elias van Herwaarden and Val Popovici, Deloitte
2The future of the tiered/dispersed service delivery model
3What does location really mean to the SSCs operating environment?
4How do you mitigate location challenges as you set-up and build-out your centre.
Elias van HerwaardenEMEA Service Leader
Global Location Strategies
Deloitte
Thomas Bo JørgensenSenior Project Manager Transformation Office
DFDS
Val PopoviciSenior Manager
Global Location StrategiesDeloitte
1What goes where? – Latest insights into location trends
Agenda
Think location from the outset of your journeyLocation dependencies
Vision, culture
& drivers
Delivery model
Processes & tools
Capabilities
Locations
requirements
constraints
There are 4 types of locations, selecting the one that is right for you now and in the future is keyLocation dynamics
Emerging
Hotspot Hotspot
Proven
destination
Under the Radar
Location
Location
attractiveness
Time
War for
talentModest Increasing FierceNone
Key
attributes
Low costs
Talent
availability
Talent quality
Infrastructures
Reliability
Low riskLow costs
ProcessModerate V-A
Increased
interaction
High V-A
Increased
Consultation
Highest V-A
ConsultationLow V-A
Sele
cte
d l
ocati
on
featu
res
Location development stagesBucharest (2005)
Bucharest (2016)
Bangalore (mid-1990s)
Bangalore (2016)
Location optionsAround the world in 60 seconds
Emerging
Proven Destination
Nascent
Countries moving Work (Majority)
Potential Recipients of Work
Size of the bubble represents scale
♦ Primary
♦ Secondary
Legend
Philippines
Argentina
Canada/ U.S.
China
Western Europe
Americas
HungaryPolandRomania
APAC
Czech RepublicBulgariaSlovakia
India
Singapore
Malaysia
Brazil
Costa Rica
Guatemala
Panama
Chile
Mexico
South Africa
Galway
Belfast
Dundalk
Glasgow
ManchesterLeeds
ChesterDublin
Cardiff London
Gothenburg
Copenhagen
Berlin
Dresden
Frankfurt amMain
Erfurt
ArnhemAmsterdam
Brussels
Luxembourg
Paris
La Rochelle
DijonGeneva
Milan
Barcelona
Zaragoza
Oviedo
Braga
Lisbon
Madrid
Rome
Msida
Turku
Vienna
Tallinn
Riga
VilniusKaunas
Tri-CityOlsztyn
Bydgoszcz
Warsaw
Lodz
Poznań
Wroclaw
Opole Katowice
KrakówRzeszów
Lublin
OstravaOlomoucBrno
Prague
Burgas
Varna
Plovdiv
Sofia Pleven
Bucharest
Kosice
ChișinauCluj
Debrecen
SibiuPécs
Craiova
Timişoara
Bratislava
BanskaMiskolc
Budapest
Zagreb
Szeged
IstanbulSamsun
Moskou
Voronez
Saint Petersburg
Stockholm
Helsinki
Karlstad
Soderhamn
Ostersund
Oulu
Haparanda
Sevilla
Malaga
Lviv
Brașov
Kyiv
Marseille
Bordeaux
Toulouse
Eskisehir
Belgrade
Skopje
Izmir
Rouen
2016 EMEA location trendsTraditional destinations steady, multi-center delivery persistent with outsourcers
Proven destination
Hotspot location
Emerging destination
Under the Radar Location
Sources: Deloitte GLS analysis based on local field work and FT data.
Budapest, Dublin, Krakow, Tallinn, Vilnius and Warsaw were top for new or expanding foreign centres in 2015-2016.
Bacau (RO), Iasi (RO), Poznan (PL), Timisoara (RO), Tri-City (PL), and Wroclaw (PL) top Tier-2 and Tier-3 cities.
Belgrade (SR), Izmir (TR), Oradea (RO), Rzeszow (PL), Skopje (MK) appear on the map.
Ukraine remains the lowest cost destination in Europe. Chernivtsy, Ivano-Frankivsk, Lviv, Ternopil, in the West offer large junior talent pools comparable to Poland.
Cairo (EG) drops from the radar for new centres. Government fights hard to retain existing operations.
Business services and technology firms were leading investors in new or expanding centres, accounting each for 30% of the centres in EMEA.
Location selectionKey factors influence your location and footprint choices
Risks
Location
Attractiveness
Office Space
Business Costs
Infrastructure
Graduates
Experienced Talent
Ecosystem
Decision factors
Regulations
What STEM/IT skills you need
for engineering, R&D, data
analytics add-ons? Functional vs
language skills?
Can the local cluster
foster higher
complexity and
innovation?
How are uncertainties
impacting footprint?
(MY, PH, PL, UK)
Can you attract
(inter)national
talent?
What is the demand
of millennials from
the workplace?
How can you
attract and
retain
millennials?
Are local utilities
ready for your cloud
and analytic needs?
Is productivity and
quality following
rising costs?
How safe is your
data in a location?
The future of the tiered/dispersed service delivery model
Talent scarcity, technology, uncertainties undermine today’s SDMs
Multi-lingual needs
More technical processes
Automation
Instabilities and uncertainties
SSC destination w/ business/admin universities
Business/admin universities
SSC destinations
Tier-1saturation
Betteraccess to Tier-2+3
BetterBPO
provision
Introducing DFDS and our Finance Shared Service Centre
DFDS Group
Northern Europe’s largest shipping and logistics company
Activities covered by our Finance Shared Service Centre
Revenue: Euro 1.8 billion
People: 6,600
Ships: 54
Units transported: 406,000Passenger activities
Logistics activities
Freight shipping activities
Terminal activities
DFDS Polska
The heart of our transactional finance operation
Location in Poland Poznan facts
DFDS Polska facts
Poznan
Population: 1 m
Graduate population: 35.000
Number of SSC/GBO: 40
Approx 200 employees
55% of employees are below 31 years old
GL/AR/AP processes in scope
Note: 2015 figures
Large change management project – still ongoing
Easier buy-in when you are close to our customers
LBU proximity increase’s quality and efficiency in our operations
What were our overall selection criteria?
Political and macro risk
“Recruit ability”
Labor regulations
Labor skills
Labor attitude
Real estate availability
Business regulations
Location accessibility
Location attractiveness
Business regulations
Infrastructure
Business costs (labor, real estate, etc…)
…and value creation in practiceValue creation criteria during the selection process…
Ability to attract talent
Proximity to our LBU’s
Attrition makes in-flow of people important
The quality of our service is dependent on our people
We want people with open mind sets and can-do attitude
An assessment of the above mentioned criteria made us pick Poznan, Poland
What did we look for in Poznan and in our office configuration?
Office selection criteria in Poznan
LocationAccess to public transportation
Rent
Quick access to airport
Office standard
Proximity to hotel(s)
Floor plan –open space
Kitchen facilities
Things we should have thought about…
Pain
po
ints
Space
Recreational
space
Toilets
Office
ventilation
Space can disappear faster than you expect
Consider space options early in the selection process
Ensure sufficient space for “battery recharging”
Consider a cantina in the building
Make sure people don’t wait in line for some alone time!
Find the right ratio between male/female toilets
Assess, if possible, office ventilation system
Frequent complaints from employees is on ventilation
Key learnings to share with the group today
Country/city
selectionOffice selection Office preparation Launch
Be very specific
on your selection
criteria – what
really matters to
your business
case
Be diligent in your
selection process
Visit the short
listed cities – you
will learn a lot
from seeing the
city with your
own eyes
Team up with a
trusted advisor on
real estate
Set very hard
deadlines for the
process
Look for flexibility
in the contract –
break options or
options for more
space
Utilize internal
resources – if
available
Don’t
underestimate
time – especially
for infrastructure
installations
Set very hard
deadlines
Have a soft
opening of the
office
Have group
support staff
available onsite
Set a high office
standard from the
beginning
Celebrate your
opening
ClosingMistakes that you don’t want to make…
1
2
3
4
5
6
7
8
9
10
Starting to think of locations too late
Neglecting scalability
Making rushed & rash decisions
Focus on a single factor in the location decision making
Following the herd
Selecting a “safe landing” zone and then focusing on cost
Not conducting a proper due diligence of the availability and quality of local talent
Underestimating the local cultural and regulatory intricacies
Undervaluing the impact of building/office facilities’ selection
Ignoring the potential benefits incentives might offer
Q
A
&
14-15 September 2016
Lisbon, Portugal
Deloitte Shared Services, GBS & BPO Conference
Plenary 1:Welcome and Introduction to Current
14-15 September 2016
Lisbon, Portugal
#DeloitteSharedServices
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