Implementing Global Business Services Using a Regional Center Model
Peeriosity benchmarking data suggests that, while many companies embrace the idea of moving towards a Global Business Services model with a broad scope of services and a large geographic footprint, less than 20% of companies have ambitions to deliver global services from a single location. The model most likely to be embraced is to implement on a regional basis, with multiple regional centers that support many countries in a region, and with only a limited number of processes or sub-processes delivered on a global basis from one of the regional centers (thus making it a global hub for that process or sub-process).
A recent PeercastTM featured a global $10B product distributor with 20,000+ employees, 500+ branch locations, and millions of customers. After completing a multi-step process to get a consensus on what processes to target, the next step was to determine the optimal location for the first regional hub. Twenty locations were evaluated using sixty attributes in their selection criteria. A location in Central America was the selected site for the regional center. Below are five examples of the more heavily weighted location selection attributes used:
1. Quality of the workforce
2. Language capabilities
3. Cost and financial benefit
4. Telecommunications infrastructure
5. A stable political climate
Following are examples of lessons learned during the implementation:
· A comprehensive training plan is required
· Be out in front of redeployment issues
· Understand cultural differences and similarities
· Address performance issues quickly
· Evaluations of language proficiency must include both speaking and writing
· Develop a strong bond between center personnel and business partners
· Documentation must be validated and complete
· Identify non-standard work
· Run in parallel before go-live
· Involve business partners at every step
· Develop detailed plans for knowledge transfer
· Create and document business continuity and disaster recovery plans
· Technology changes need to be implemented and thoroughly tested before go-live
As shown below, per a supporting iPolling1 question, 64% of companies have implemented regional hubs, with another 21% with plans to do so.
Perhaps more interesting are the results from the second iPollingTM question that asks about the member company’s outlook on further consolidation. The results indicate that 52% expect to consolidate with regional hubs playing an important role, with only 14% reporting that they either are already operating processes on a global basis or have long-term ambitions to do so. An additional 24% are either pausing for the moment or have completed the transition, with their response indicating that “standardization across locations is more a driver for us than further consolidation”. Here are the details:
Here are some additional comments from iPolling participants:
· Our HR Shared Services model is currently operating with regional hubs, primarily in the US, Canada, Mexico, and Brazil. At this time, there are no plans to consolidate into one.
· While our talent is located regionally, our goal is to support global business processes by optimally leveraging location and talent.
· We continue to identify additional services to consolidate into our two regional hubs to gain greater efficiencies.
· We are still standardizing processes and have started consolidation, but will need a few more years before we could say we are mainly operating from regional hubs.
· Our belief is that a regional hub might be the best solution to deal with time zone differences and language barriers.
Do regional Shared Service centers fit with your company’s plans for global Shared Services?
Have you fully implemented, or are there additional processes to include more countries to transition?
Who are your peers and how are you collaborating with them?
“PeercastsTM” are private, professionally facilitated webcasts that feature leading member company experiences on specific topics as a catalyst for broader discussion. Access is available exclusively to Peeriosity member company employees, with consultants or vendors prohibited from attending or accessing discussion content. Members can see who is registered to attend in advance, with discussion recordings, supporting polls, and presentation materials online and available whenever convenient for the member. Using Peeriosity’s integrated email system, Peer MailTM, attendees can easily communicate at any time with other attending peers by selecting them from the list of registered attendees.
“iPollingTM” is available exclusively to Peeriosity member company employees, with consultants or vendors prohibited from participating or accessing content. Members have full visibility of all respondents and their comments. Using Peeriosity’s integrated email system, Peer MailTM, members can easily communicate at any time with others who participated in iPolling.
Peeriosity members are invited to log into www.peeriosity.com to join the discussion and connect with Peers. Membership is for practitioners only, with no consultants or vendors permitted. To learn more about Peeriosity, click here.