Choosing the Right Location for Your Shared Service Center: Factors to Consider

Expanding your business and establishing a shared service center can be a game-changer, offering enhanced efficiency and cost savings. However, one of the crucial decisions you’ll face is selecting the right location for your shared service center. The location you choose can significantly impact the success and long-term viability of your operations. With the implementation of shared services best practices, businesses can ensure efficiency, cost-effectiveness, and optimal performance of the overall operations. In this blog, we’ll explore the key factors you should consider when making this critical decision for global business services.

Cost and Economic Considerations

Cost is often the primary driver when deciding on a location for a shared service center. Look for regions or countries that offer a competitive cost structure, including lower labor costs, real estate expenses, and operational overheads. Additionally, consider the tax and regulatory environment, as well as any government incentives or subsidies for setting up shared service centers in certain locations.

Talent Pool and Skill Availability

Access to a skilled and diverse talent pool is essential for the success of your shared service center. Research shared service center locations that have a strong education system and a well-established workforce with expertise in the areas relevant to your operations, such as finance, human resources, IT, and customer service. Additionally, consider the availability of multilingual talent if your business center will serve a global audience.

Language and Cultural Fit

Language and cultural compatibility are critical factors when choosing a location for your shared service center, especially if it will serve customers or clients from different regions. Opt for a location where the majority of your team can communicate effectively in the primary languages of your target markets. This alignment enhances the value of your global business collaboration and overall team productivity.

Infrastructure and Connectivity

A robust and reliable infrastructure is essential for the smooth functioning of your shared service center. Look for locations with excellent connectivity, reliable power supply, and modern communication networks. Access to efficient transportation options benefits both your employees and the timely delivery of services to your clients.

Time Zone Considerations

If your shared service center will provide 24/7 support or interact with teams in different time zones, consider the location’s time zone in relation to your primary operations and target markets. Opting for a location with overlapping business hours can foster better communication and collaboration, aligning with shared services best practices.

Political and Security Stability

Political stability and a secure environment are crucial for the long-term viability of your shared service center. Conduct thorough research on the political climate and security situation in the prospective locations to ensure the safety of your employees and business operations.

Scalability and Future Expansion

Think long-term when selecting a location for your shared service center. Ensure that the location can accommodate your future growth plans and offers scalability service options. This will save you time and resources if you decide to expand or diversify your operations in the future. Additionally, incorporating shared services best practices into your location selection process ensures that your shared service center is well-positioned to adapt to evolving business needs and maintain operational excellence.

Five shared service center locations that have gained popularity among businesses

Dublin, Ireland

Dublin has emerged as a prominent location for shared service centers, especially for companies targeting European markets. The city offers a well-educated and multilingual talent pool, with a strong focus on finance, technology, and customer service expertise. Ireland’s business-friendly environment, competitive tax rates, and government support for foreign investments make it an attractive choice for global companies seeking to establish a presence in the European Union through their global business services.

Manila, Philippines

Manila has become a leading hub for shared service centers, particularly for organizations looking to cater to the Asia-Pacific region. The Philippines boasts a large English-speaking workforce, making it ideal for providing customer support and back-office services. With cost-effective labor, a vast pool of skilled professionals, and a supportive outsourcing ecosystem, Manila continues to be a preferred destination for shared service centers across various industries.

Krakow, Poland

Krakow has gained popularity as a top global location for shared service centers due to its strategic location in Central Europe and its exceptional talent pool. The city is home to several prestigious universities, producing graduates with strong language skills and expertise in finance, accounting, and IT services. Poland’s stable political environment, competitive operating costs, and European Union membership make it an appealing choice for companies looking to tap into the European market.

Bengaluru, India

Bengaluru, also known as the “Silicon Valley of India,” is a thriving hub for technology-based shared service centers. India’s vast talent pool, particularly in the IT and software sectors, offers a cost-effective solution for businesses seeking specialized technical expertise in their operations. The city’s favorable time zone for serving global clients, coupled with its advanced infrastructure and pro-business policies, has attracted numerous multinational corporations to set up shared service centers in Bengaluru.

Budapest, Hungary

Budapest has emerged as a prominent shared service center location in Central and Eastern Europe. The city offers a skilled workforce with multilingual capabilities, making it suitable for providing services to a diverse range of markets. Hungary’s competitive labor costs, supportive government policies, and well-developed infrastructure have contributed to its popularity among organizations looking to establish shared service centers in the region.

Conclusion

Choosing the right location for your shared service center is one of the shared services best practices and it requires careful consideration of various factors, including cost, talent availability, language proficiency, cultural fit, infrastructure, and stability. By conducting comprehensive research and analysis, you can make an informed decision that aligns with your business objectives and sets the foundation for a successful and thriving shared service center, including shared branching.

Remember that each business is unique, and the ideal location may vary based on your specific requirements. Consult with experts, conduct site visits, and consider seeking advice from companies that have successfully established shared service centers to gain valuable insights. With the right location in place, your shared service center can become a driving force behind your business’s growth and success.