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Site Selection for Shared Services in Asia-Pacific

 Introduction

For companies that have moved beyond a country-by-country design to leverage scale across geographies, the most common model is to have a physical location that supports one or more geographic regions.  Servicing business activity in the Asia-Pacific region often means having a Shared Services center in the region, in addition to opportunities that may exist for global processing from an Asia-Pacific location.

Making the location decision for Asia-Pacific, or fine-tuning a decision that’s already been made, isn’t easy.  While it’s possible to hire a consultant to provide insights to this issue, for many a better alternative is to network directly with peers who have direct experience, without any bias or reasons to influence your decision, other than to candidly share their insights and opinions with the hope that others can benefit.   Fortunately, members of Peeriosity’s Shared Service Leadership best practice research community are well positioned to understand and learn from the actual experiences of leading peers; all within the safety and security of being part of a private professional research network, with access restricted to peer practitioners.

iPollingTM Results Review

A recent Peeriosity poll created explored the locations commonly selected in Asia-Pacific, and the range of reasons for the selection.  With regards to primary location, 33% have a primary regional location in India and 24% have a primary regional location in Malaysia.  Other popular choices included China, Singapore, and Australia, with several selecting the Philippines or New Zealand.  Here are the details:

When exploring the primary reason a country was selected, for 50% it was because of favorable labor quality and low cost.  For 40% the primary reason was tied to where the company already had a presence, including being headquartered in a country, with the remaining 10% based on other factors.

Here are a few of the comments from Peeriosity members:

  • Ended up in Singapore because that’s where the company set up its initial presence in the region. Not committed to this location long term due to higher relative labor costs.
  • Our primary location is the Philippines, which provides good quality service for the cost. Our AP/P2P back office is supported by a BPO in India.
  • We originally had a Shared Services office in Singapore which aligned with where our other offices were located. Due to cost factors the Shared Services operation was moved to India.
  • Not a low cost location, but significant business in China. Numerous strategic, process and legal reasons behind establishing a regional SSC in China.
  • Primary reason was cost and quality of labor. We do have other centers around the world to support language and regulatory requirements.
  • Our primary Asia-Pac location is New Zealand, but we also operate a Shared Service centre in Malaysia. Malaysia was selected for a number of reasons, including existing company location, labor cost and quality, and well-developed infrastructure.
  • China is our largest business area, and handles several countries in Asia Pacific, and we have hubs in other countries as well. 

Closing Summary

Making the decision for where to locate a Shared Services center in Asia-Pacific is complicated, and each company will have their own unique circumstances.  Even so, knowing the lessons learned from peers with practical experience and insights can be very valuable.  Peeriosity members can easily tap into the experience of their peers to understand the site selection decision of peers, and the range of reasons why the decision was made.  Most importantly, they have full information on which company made which decision, with the ability to follow up directly for additional discussion and clarification as needed.

Does your company have a Shared Services operation located in Asia-Pacific?  If so, where are you located, and what were the primary reasons the country you selected was chosen?

Who are your peers and how are you collaborating with them?

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 “iPollingTM” is available exclusively to Peeriosity member company employees, with consultants or vendors prohibited from participating or accessing content. Members have full visibility to 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.



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