Treasury and Trade Solutions
26
SMARTER, BETTER OUTCOMES
FOR CORPORATES DRIVING SSC
ADOPTION IN EMEA
EMEA is at the forefront of many shared service center (SSC) trends
given its favorable regulatory environment, advanced infrastructure
and technology, and the availability of relatively low-cost, highly educated
individuals in a number of countries within the region. The following are
some of the most important trends currently driving SSC adoption
in EMEA.
Cost savings
Cost continues to be the fundamental
driver for SSC adoption in EMEA.
Regardless of the economic
environment, process efficiency and
cost savings are always attractive to
corporates. In uncertain times —
which still prevail in Europe despite
tentative signs of a recovery —
the incentive to cut costs is even
more pronounced.
SSCs offer numerous opportunities
to create savings. When services are
provided locally, multiple individuals
perform the same function. Usually,
they do not have specific expertise
— but rather many job functions
(possibly in addition to their regular
job). Centralizing functions therefore
offers an opportunity to improve an
individual’s productivity and create a
subject matter expert.
Centralizing a function into an
SSC improves its efficiency across
the region. By bringing multiple
processes into a single center of
excellence, economies of scale
are available that can facilitate
greater automation. Modern
communications infrastructure
means that there are few
geographical limitations on where
SSCs are located. As a result, SSCs
can be set up in low cost areas.
In EMEA, the success of SSCs has,
however, created its own challenges.
Where increasing numbers of
corporates have opened SSCs in the
same location, hiring becomes more
expensive and over time the relative
cost benefits diminish. Companies
have learned that they must look
beyond short-term personnel cost
savings — important though they
are — and instead focus more on
the efficiencies that result from
centralization and automation.
Moreover, rather than focusing
simply on initial cost savings,
companies are considering the
growth of the business and the
opportunity cost of not moving to
Steve Elms
Head of Industrials
Sector Sales,
Treasury and Trade
Solutions,
Citi
