Overview of Shared Services Globalization in Asia Pacific Region

Overview of Shared Services Globalization in APAC (Executive Summary)

October 2013

This report is solely for the use of Talent Neuron clients and Talent Neuron Subscribers. No part of it may be circulated,

quoted, or reproduced for distribution outside the client organization without prior written approval from Talent Neuron.

1

Talent Neuron Copyright and Disclaimer

Copyright

The material in this report is copyrighted. No part of this report prepared by Talent Neuron can be reproduced either on paper or electronic media without permission in writing from Talent Neuron. Request for permission to reproduce any part of the report may be sent to [email protected]. Customers are welcome to use an unlimited number of copies of the materials contained within this report. Furthermore, customers may copy any graphic herein for their own internal purpose. Talent Neuron requests only that members retain the source name/logo mark on all pages produced. Please contact our Talent Neuron account manager at +1-408-716-8432 for any help we may provide. The report herein is the property of Talent Neuron (A Zinnov LLC Company). Beyond the membership, no copyrighted materials of Talent Neuron may be reproduced without prior approval.

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

Talent Neuron Slideshare Channel

Follow us on Twitter

To Access the complete Report. Sign-up for a Demo Account

http://talentneuron.com/demo_signup.php

Recent White Papers

Storage Domain - Attrition Trend Comparison Report

http://www.talentneuron.com/article.php?art

_id=247&access=1

Global Location Niche Skill-Set Insights

http://www.talentneuron.com/article.php?art

_id=234&access=1

Big Data Talent Overview

http://www.talentneuron.com/article.php?art

_id=207&access=1

Subscribe to our Weekly Newsletter:-

Subscribe now

Follow us on Linkedin

Talent Related Videos

Our thoughtful Insights on Talent

Share your views

Talent Neuron

Talent Analysis

Peer Trends

Cost Analysis

University Analysis

Location Analysis

Latest Trends & Related News

Employee Profile

Analysis

520 + Cities 7,500 +

Companies

12,000 Unique Data points per

city 360+ Skills

20.5 Million Professionals

~3,200 Universities

11

Using Big Data principles, Talent Neuron Platform provides powerful insights on Talent, Location, Cost, Peer Group Footprint, Current Trends and Employee’s profiles

11

12

Our offering consists of the following FIVE modules..

12

Talent Acquisition

Workforce Planning

Globalization Initiatives

Predictive Talent

Analytics

Site / Location Selection

TALENT NEURON

MODULES

1

2

3 4

5

Workbench Talent Neuron

Platform Our Service Offerings

THANK YOU

3080 Olcott Street, Suite A125, Santa Clara, CA 95054 Phone: +408-716-8432

21, Waterway Ave, Suite 300 The Woodlands TX – 77380 Phone: +1-281-362-2773 69 "Prathiba Complex", 4th 'A' Cross, Koramangala Ind. Layout 5th Block, Koramangala Bangalore – 560095 Phone: +91-80-41127925/6 First Floor, Plot no. 131, Sector 44, Gurgaon-122002, Phone: +91 124 4420100

[email protected]

www.talentneuron.com @talentneuron