14-15 September 2016

Lisbon, Portugal

#DeloitteSharedServices

Deloitte Shared Services, GBS & BPO Conference

Breakout 7: Selecting your location, and how to make it work

Thomas Bo Jorgensen, DFDS; Elias van Herwaarden and Val Popovici, Deloitte

2The future of the tiered/dispersed service delivery model

3What does location really mean to the SSCs operating environment?

4How do you mitigate location challenges as you set-up and build-out your centre.

Elias van HerwaardenEMEA Service Leader

Global Location Strategies

Deloitte

Thomas Bo JørgensenSenior Project Manager Transformation Office

DFDS

Val PopoviciSenior Manager

Global Location StrategiesDeloitte

1What goes where? – Latest insights into location trends

Agenda

Think location from the outset of your journeyLocation dependencies

Vision, culture

& drivers

Delivery model

Processes & tools

Capabilities

Locations

requirements

constraints

There are 4 types of locations, selecting the one that is right for you now and in the future is keyLocation dynamics

Emerging

Hotspot Hotspot

Proven

destination

Under the Radar

Location

Location

attractiveness

Time

War for

talentModest Increasing FierceNone

Key

attributes

Low costs

Talent

availability

Talent quality

Infrastructures

Reliability

Low riskLow costs

ProcessModerate V-A

Increased

interaction

High V-A

Increased

Consultation

Highest V-A

ConsultationLow V-A

Sele

cte

d l

ocati

on

featu

res

Location development stagesBucharest (2005)

Bucharest (2016)

Bangalore (mid-1990s)

Bangalore (2016)

Location optionsAround the world in 60 seconds

Emerging

Proven Destination

Nascent

Countries moving Work (Majority)

Potential Recipients of Work

Size of the bubble represents scale

♦ Primary

♦ Secondary

Legend

Philippines

Argentina

Canada/ U.S.

China

Western Europe

Americas

HungaryPolandRomania

APAC

Czech RepublicBulgariaSlovakia

India

Singapore

Malaysia

Brazil

Costa Rica

Guatemala

Panama

Chile

Mexico

South Africa

Galway

Belfast

Dundalk

Glasgow

ManchesterLeeds

ChesterDublin

Cardiff London

Gothenburg

Copenhagen

Berlin

Dresden

Frankfurt amMain

Erfurt

ArnhemAmsterdam

Brussels

Luxembourg

Paris

La Rochelle

DijonGeneva

Milan

Barcelona

Zaragoza

Oviedo

Braga

Lisbon

Madrid

Rome

Msida

Turku

Vienna

Tallinn

Riga

VilniusKaunas

Tri-CityOlsztyn

Bydgoszcz

Warsaw

Lodz

Poznań

Wroclaw

Opole Katowice

KrakówRzeszów

Lublin

OstravaOlomoucBrno

Prague

Burgas

Varna

Plovdiv

Sofia Pleven

Bucharest

Kosice

ChișinauCluj

Debrecen

SibiuPécs

Craiova

Timişoara

Bratislava

BanskaMiskolc

Budapest

Zagreb

Szeged

IstanbulSamsun

Moskou

Voronez

Saint Petersburg

Stockholm

Helsinki

Karlstad

Soderhamn

Ostersund

Oulu

Haparanda

Sevilla

Malaga

Lviv

Brașov

Kyiv

Marseille

Bordeaux

Toulouse

Eskisehir

Belgrade

Skopje

Izmir

Rouen

2016 EMEA location trendsTraditional destinations steady, multi-center delivery persistent with outsourcers

Proven destination

Hotspot location

Emerging destination

Under the Radar Location

Sources: Deloitte GLS analysis based on local field work and FT data.

Budapest, Dublin, Krakow, Tallinn, Vilnius and Warsaw were top for new or expanding foreign centres in 2015-2016.

Bacau (RO), Iasi (RO), Poznan (PL), Timisoara (RO), Tri-City (PL), and Wroclaw (PL) top Tier-2 and Tier-3 cities.

Belgrade (SR), Izmir (TR), Oradea (RO), Rzeszow (PL), Skopje (MK) appear on the map.

Ukraine remains the lowest cost destination in Europe. Chernivtsy, Ivano-Frankivsk, Lviv, Ternopil, in the West offer large junior talent pools comparable to Poland.

Cairo (EG) drops from the radar for new centres. Government fights hard to retain existing operations.

Business services and technology firms were leading investors in new or expanding centres, accounting each for 30% of the centres in EMEA.

Location selectionKey factors influence your location and footprint choices

Risks

Location

Attractiveness

Office Space

Business Costs

Infrastructure

Graduates

Experienced Talent

Ecosystem

Decision factors

Regulations

What STEM/IT skills you need

for engineering, R&D, data

analytics add-ons? Functional vs

language skills?

Can the local cluster

foster higher

complexity and

innovation?

How are uncertainties

impacting footprint?

(MY, PH, PL, UK)

Can you attract

(inter)national

talent?

What is the demand

of millennials from

the workplace?

How can you

attract and

retain

millennials?

Are local utilities

ready for your cloud

and analytic needs?

Is productivity and

quality following

rising costs?

How safe is your

data in a location?

The future of the tiered/dispersed service delivery model

Talent scarcity, technology, uncertainties undermine today’s SDMs

Multi-lingual needs

More technical processes

Automation

Instabilities and uncertainties

SSC destination w/ business/admin universities

Business/admin universities

SSC destinations

Tier-1saturation

Betteraccess to Tier-2+3

BetterBPO

provision

Introducing DFDS and our Finance Shared Service Centre

DFDS Group

Northern Europe’s largest shipping and logistics company

Activities covered by our Finance Shared Service Centre

Revenue: Euro 1.8 billion

People: 6,600

Ships: 54

Units transported: 406,000Passenger activities

Logistics activities

Freight shipping activities

Terminal activities

DFDS Polska

The heart of our transactional finance operation

Location in Poland Poznan facts

DFDS Polska facts

Poznan

Population: 1 m

Graduate population: 35.000

Number of SSC/GBO: 40

Approx 200 employees

55% of employees are below 31 years old

GL/AR/AP processes in scope

Note: 2015 figures

Large change management project – still ongoing

Easier buy-in when you are close to our customers

LBU proximity increase’s quality and efficiency in our operations

What were our overall selection criteria?

Political and macro risk

“Recruit ability”

Labor regulations

Labor skills

Labor attitude

Real estate availability

Business regulations

Location accessibility

Location attractiveness

Business regulations

Infrastructure

Business costs (labor, real estate, etc…)

…and value creation in practiceValue creation criteria during the selection process…

Ability to attract talent

Proximity to our LBU’s

Attrition makes in-flow of people important

The quality of our service is dependent on our people

We want people with open mind sets and can-do attitude

An assessment of the above mentioned criteria made us pick Poznan, Poland

What did we look for in Poznan and in our office configuration?

Office selection criteria in Poznan

LocationAccess to public transportation

Rent

Quick access to airport

Office standard

Proximity to hotel(s)

Floor plan –open space

Kitchen facilities

Things we should have thought about…

Pain

po

ints

Space

Recreational

space

Toilets

Office

ventilation

Space can disappear faster than you expect

Consider space options early in the selection process

Ensure sufficient space for “battery recharging”

Consider a cantina in the building

Make sure people don’t wait in line for some alone time!

Find the right ratio between male/female toilets

Assess, if possible, office ventilation system

Frequent complaints from employees is on ventilation

Key learnings to share with the group today

Country/city

selectionOffice selection Office preparation Launch

Be very specific

on your selection

criteria – what

really matters to

your business

case

Be diligent in your

selection process

Visit the short

listed cities – you

will learn a lot

from seeing the

city with your

own eyes

Team up with a

trusted advisor on

real estate

Set very hard

deadlines for the

process

Look for flexibility

in the contract –

break options or

options for more

space

Utilize internal

resources – if

available

Don’t

underestimate

time – especially

for infrastructure

installations

Set very hard

deadlines

Have a soft

opening of the

office

Have group

support staff

available onsite

Set a high office

standard from the

beginning

Celebrate your

opening

ClosingMistakes that you don’t want to make…

1

2

3

4

5

6

7

8

9

10

Starting to think of locations too late

Neglecting scalability

Making rushed & rash decisions

Focus on a single factor in the location decision making

Following the herd

Selecting a “safe landing” zone and then focusing on cost

Not conducting a proper due diligence of the availability and quality of local talent

Underestimating the local cultural and regulatory intricacies

Undervaluing the impact of building/office facilities’ selection

Ignoring the potential benefits incentives might offer

Q

A

&

14-15 September 2016

Lisbon, Portugal

Deloitte Shared Services, GBS & BPO Conference

Plenary 1:Welcome and Introduction to Current

14-15 September 2016

Lisbon, Portugal

#DeloitteSharedServices

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