ABSL Conference in Prague. Location, location, location. Demystifying the location selection process

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1 ABSL Conference in Prague Location, location, location. Demystifying the location selection process 17 October 2013

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

2 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 renegotiation. 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 SSC in audit in Katowice, Poland. Every member of the team has a deep understanding of the SSC methodology. 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

3 Why undertake a location selection project? Slide 3

4 There is a lot of choice within CEE Wroclaw Credit Suisse, UPS, IBM, HP Gdansk Arla Foods, Intel, Acxiom, Sony Tallinn Playtech, Swedbank, Statoil Vilnius Mirror Support Services, BDO, Barclays Bank Katowice, Capgemini, Steria Prague Accenture, DHL, Exxon Mobil, SAP Brno IBM, Motorola, Infosys Ostrava GE Money, Siemens, OKIN Group CZ PL SK HU LT RO EE Warsaw Citi Group, ABN Amro, Colgate Palmolive Krakow Shell, IBM, Capgemini, Philip Morris Debrecen BT, Ygomi, GEM, National Instruments Bratislava IBM, Henkel, KONE, Kraft Foods Cluj-Napoca Office Depot, Bombardier Budapest IBM, Diageo, Morgan Stanley, Citibank, Timisoara Oracle, Alcatel Lucent, S&T Romania, Wipro Bucharest Hewlett Packard, Procter & Gamble, Huawei Slide 4

5 Asia Nagpur Ahmedabad Jaipur New Delhi TCS, Genpact, IBM Beijing Accenture, Capgemini. IBM Dalian Accenture, Convergys, IBM Mumbai TCS, IBM, JP Morgan Chase CHN Shanghai Accenture, Wipro, SAP Hangzhou Pune IND Chengdu Hyderabad GE, TCS, Genpact Bangalore GE, Cisco, SAP Chennai HP, TCS, IBM Colombo CL Penang MAL VN Kuala Lumpur Shell, Accenture, Convergys, TCS RP Ho Chi Minh Changsha Manilla Accenture, Wipro, Genpact, Shell Cebu - Accenture, Wipro, Convergys Davao Slide 5

6 Americas Seattle Accenture, Wipro, Vcare, Boise Ciudad Juarez Genpact, ACS, S- Data Solutions Monterrey Wipro, Accenture, ACS Guadalajara Queretaro Mexico City SAP, Accenture, EDS Vancouver Accenture, Microsoft, ebay San Antonio Accenture, Citi, BD Calgary Bogota CDN Santiago USA MEX Buenos Aires CR PA CO Winnipeg RCH RA BR Curitiba Ottawa Accenture, Fusion BPO Services Indianapolis Virginia Beach San Jose Panama City Caterpillar, Heineken, CCTG Recife Motorola, Dell, Sun Microsystems Campinas Rio de Janeiro IBM, Oracle, Satyam Sao Paulo Accenture, Convergys, Hewitt Associates Slide 6

7 approach to get to a selection Workshop discussion Feasibility & analysis Site visits Final selection & recommendation 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 Understand the vision & key drivers Approx 25 locations Shortlist of up to 10 locations Down select to 2-3 preferred locations Slide 7

8 When selecting a location, what is important to your organisation? Slide 8

9 Some common criteria Labour pool Population / students Labour force Unemployment Language skills availability SSC/BPO centres Labour costs Salary costs Additional employer charges insurances, taxes and benefits Wage inflation data Other costs Recruitment costs Labour market conditions General unions rules Amount of leave entitlements Termination notice Easiness to hire & retire Office space Lease rates Current office availability Future office availability (under construction) Location accessibility International airports Various flight connections Geographical proximity Tax and subsidy factors Corporate taxation SSC investment subsidies / EU grants Opportunity for tax exemptions Standard of living Living standard indices for foreigners Rental property costs International schools Other Size of current business Potential exit Easiness to transfer & exit IT infrastructure IT connectivity Security IT infrastructure cost Country factors Political stability Inflation Corruption * Different weights assigned Slide 9

10 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

11 Different cities are at different stages of their SSC development Slide 11

Budapest/ Prague 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

12 Budapest/ Prague City Overview Budapest Prague Population Labour pool Number of universities Number of students Language availability Good Very Good Unemployment rate 11,10% 7,5% Office space sqm sqm Current cost per sq meter for class A office space EUR per sq meter per month EUR per sq meter per month Location Accessibility / International airport(s) Very Good / Yes Very Good / Yes Corporate taxation 19,0% 19,0% SSC s in the city Finance Leaders' Summit May 2012 Slide 12

13 Brno / Katowice City Overview Brno Katowice (Silesia) Population ( ) Labour pool ( ) Number of universities Number of students Language availability Good Good Unemployment rate 9,54% 3,60% (10,8%) Office space sqm sqm Current cost per sq meter for class A office space 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% SSC s in the city Finance Leaders' Summit May 2012 Slide 13

Lviv / Lublin 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

14 Lviv / Lublin City Overview Lviv Lublin Population Labour pool Number of universities Number of students Language availability Moderate Good Unemployment rate 15,00% 10,10% Office space sqm sqm Current cost per sq meter for class A office space 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% SSC s in the city Finance Leaders' Summit May 2012 Slide 14

Thank you Anna Wójt Manager Poland +48 519 507 593 anna.wojt@pl.pwc.

15 Thank you Anna Wójt Manager Poland 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 PricewaterhouseCoopers LLP. All rights reserved. In this document, 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

VII Annual Outsourcing Forum Poland as an outsourcing destination. September 20 th, 2012

VII Annual Outsourcing Forum Poland as an outsourcing destination September 20 th, 2012 Meet the Panelists Waldemar Olbryk, President of the board Skanska Property Poland Austen McDonach IBM s Finance