8 Factors to Consider When Choosing A Shared Services Location

It is no secret that the pandemic caused an interruption of business growth worldwide. It seemed as if the entire world was on pause for quite some time. However, despite the societal challenges faced, some organizations are finally starting to see growth again. With growth comes the challenge of organizations striving to stay ahead in their industry. Organizations that have begun their expansion again are also quickly adapting to trends and changes within the market. The result is an increasingly competitive field. One way that growing organizations are working to put themselves in the best position for long-term success is by establishing or adding a new shared services location to support their expansion. In the following, I will provide some insight into factors to consider when it comes to picking a location for a shared services organization.

Finding a suitable location for a shared services organization can lead to a number of advantages. Some of these include cost efficiency, market access, infrastructure and technology, talent pool, risk management, and more. However, in the midst of the process of selecting a location, several key considerations come into play, and one crucial factor among them is the quality of labor and availability.

Labor Quality and Availability

When establishing a new Global Shared Services Center, quality of labor and availability becomes a high priority. It is beneficial to choose a location based on certain external factors such as high quality universities, substantial number of graduates per year, and the availability of skills and capabilities that support your business needs like finance, supply chain, etc. Furthermore, selecting a university with studies that focus on Global Shared Services can provide even a greater advantage.

Competitive Environment

Another important factor to consider in the decision-making process is the competitive environment. When assessing this factor, it is important to research and evaluate the demand for talent in that area. Competitive environment should not always be seen as a challenge. It’s a great way to provide growth opportunities for Key Talent and an opportunity to learn from other Shared Services Organizations as new talent enters your organization. Understanding the environment can provide strategic insights for workforce planning, assists in tailoring recruitment strategies, and supports cost-efficient resource allocation. Understanding the competitive environment is important for long-term sustainability as it will enable your organization to adapt to changes, use available resources, and create your desired workforce.

Business Climate

The next crucial factor to emphasize is the business climate. Do the locations you are considering offer tax advantages or incentives for your investments? Does the area have a healthy economic environment? Answering these questions can help your organization understand the benefits for investing in one location versus another. .

Location Risk

Next, I stress the importance of assessing location risk. This includes evaluating factors like climate and political unrest. For instance, consider whether earthquakes or hurricanes are common in the area and assess the potential for feuds or social issues that may cause business disruption. These are all things to consider when looking for a location. By evaluating location risk, you can make an informed decision based on threats and enhance your ability to adapt to possible changing circumstances.

Access

Access is another important factor to consider when looking for a shared services location. This involves thinking about well-connected airports and being on similar clocks to your customer (internal or external) worldwide. You also want a highly accessible location that your leadership can get to without multiple connections. As a Shared Services Center we welcome visitors and want to showcase our team and our delivery capabilities. Highly considering access when picking your shared services location is a strategic move that keeps your center visible to the organization and enhances your partnerships.

Real Estate

Next, let's go over why real estate is another important factor to consider. In starting a shared services organization or any organization for that matter, one is going to also want to create a goal of growth. Thus, making it important to plant your business in a location that has opportunities for expansion (expand to another floor, modify current floor plan for more desk space, etc.). You want to select a location that has an option to expand, if required. You are also looking for stable infrastructure, reliable internet connectivity, and efficient transportation options for your employees. This will ensure both a solid foundation for your organization, and will make the opportunity of expansion much more smooth as well.

Quality of Living

Another factor to consider is quality of living. You want a location where people want to live and not see it as a transient location. They feel they can make a good living based on local wages and overall feel it's a good economy.

Support Your Mission

After considering all the above questions, we arrive at the last key factor: finding a location that supports your organization's mission. This may be the most important factor, as having a community that will stand behind your organization's mission will go a long way. Think of your organization's mission and consider what demographics will support it not only now, but also in the future. Talent trends suggest connecting with the company's mission is more important than salaries in recent studies. Being able to find an area that will support you in the long run will lead to long-term success.

Conclusion

In conclusion, when exploring the key considerations for selecting a Shared Services location, it is evident that strong organizations can remain resilient amidst global challenges, adapt to changes, and find avenues for successful expansion. From labor quality to the competitive environment, business climate, location risk, access, real estate, quality of living, and community support, each of these key factors play a major role in finding a strong location for your organization. By assessing each of the above factors, you will be even more prepared to make an informed decision that will likely lead to success and long-term sustainability.