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OUTSOURCING
• Higher awareness: Services providers are broadening their focus from mature Western markets to relatively new markets such as Middle East and Africa. Their investments in business development within the region has helped improve awareness among businesses.
Factors favouring the shared services wave:
• Regional expansion: Businesses have realised that a single-country focus is no longer sustainable. They are increasing their regional presence through mergers and acquisitions, which inevitably lead to duplication of process capabilities. Shared services is a key element of the plan to derive cost synergies from M&A.
• Economic co-operation: Regional economic co- operation in GCC, Euro and Asia-Pac regions makes it easier to set up regional operations units and shared services.
• Cost advantage: There is a wide variance in labour costs across countries engaged in economic co- operation. Setting up shared services in low-cost locations enables operational efficiency and helps in development of infrastructure in those locations. For example, in the Middle East region businesses can serve customers from high-cost locations like Dubai, Abu Dhabi or Kuwait through a shared service in Fujairah, thus creating a win-win for both sides.
Embarking on the IT outsourcing and shared services journey
The first step in the journey is to review the current operating model, define the target benefits and the target operating model. Clarity on the target state will help in identifying suitable partners and ensuring a seamless transition to an improved model.
ABOUT THE AUTHOR
Sudeep Nair is a Senior Director at Cedar Management Consulting International LLC, a US based management consulting firm. Sudeep has over 15 years of international consulting experience (USA, UK, Continental Europe & India) and is a recognised expert in delivering significant improvements for businesses across Organization, Process and Technology. He can be reached at
Sudeep.Nair@
cedar-consulting.com
www.ibsintelligence.com © IBS Intelligence 2016
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