MONDAY 31st JANUARY 2011

Shared Revolution

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Birmingham shares its service secret

Business Birmingham looks at the 21st century phenomenon of shared services, which has revolutionised how businesses manage their operations, and puts forward its case for why the city can offer a unique proposition to investors in the sector.

Technology has created an untold number of opportunities for business in the past 30 years – from snail mail to email from meetings to messaging, technology has changed the way we do business.

Changes in how we communicate impacted on how organisation’s manage the internal and external processes, which allied with increasing drives for efficiency, led to the rise of the shared service sector.

These business support hubs, named Shared Service Centres (SSC), house non-core business processes including HR, customer services, procurement, finance and accounting. Their success not only in delivering financial, but operational efficiencies have seen their proliferation across the spectrum, as large corporations and SMEs alike capitalise on the potential to streamline their support operations, removing the need for multiple offices replicating the same functions, and cutting costs and resources in the process.

Location, location, location

When assessing where to locate a new SSC, there are a number of factors for organisations to consider including:

• the location’s available talent pool, to ensure the right calibre of staff;
• geographical location, to ensure it can remain part of the organisation’s global network;
• business and peer networks, to provide professional support and growth opportunities;
• technological expertise, to deal with the off-site location and communications challenges,
• size and scale, to ensure the area can absorb the operation.

The volume of business critical data being processed in SSCs creates a highly pressurised hub, which requires highly skilled staff if the operation is to be efficient and deliver the necessary financial and operational benefits. The calibre of staff used to resource the centre is vital for success.

Over 50 large corporations and smaller businesses have located their Shared Services Centres in the Midlands, in part due to the high quality of the region’s staff. McDonald’s, the world’s largest chain of fast food restaurants, has a SSC just outside Birmingham, while two of the largest professional services in the UK, PriceWaterhouseCoopers and Ernst & Young, have established centres in Birmingham’s business district.

So why did they choose to locate in Birmingham?

Firstly, and at the heart of the decision, is the availability of a highly-skilled workforce. Birmingham provides access to over 40,000 graduates every year from its three universities, including Aston University - which regularly finds itself in the top 10 UK league table for ‘employment ready’ graduates, and the University of Birmingham - which is famed for its international research credentials and expertise in technology and innovation, including cloud computing, a major force in the shared services industry. Birmingham’s position as one of the most diverse cities in Europe with an international and multi-lingual labour force is also a key draw to an industry that provides support to countries across the globe.

Placed in the heart of the UK and Europe, Birmingham is served by fast international and national transport links that allow it to host a global SSC base. With direct flights to long-haul destinations such as the US and short-haul across Europe and the Middle East, Birmingham is an international location. Across the UK, businesses can connect through its three train stations, including New Street Station, the busiest in the UK, while 98% of the population can be reached within four hours on the country’s road network.

With its strong talent pool, central European and UK location, size, scale and technological expertise, Birmingham is fast becoming the shared service sector’s location of choice.

Network

Recognising its unique offer, Birmingham is now cultivating a strong support network within the region’s shared services sector, designed to further develop the skills, technology and knowledge sharing of local industry experts.

Business Birmingham recently launched a Shared Services Networking Forum for the Midlands, acknowledging the importance of a local network of experts on hand to support a company looking to locate a SSC to a new city. The Forum, which includes representatives from international companies with local SSCs including Lafarge, Deutsche Bank and Adecco, provides strategic advice on issues such as human resources, employee relocation, sector data as well as providing an essential platform for local knowledge sharing and networking.

If you would like to learn more about locating a SSC in Birmingham, or already work within the local industry, Business Birmingham is keen to speak with you. The Shared Services Networking Forum will continue to meet in 2011. If you are interested in joining, please contact us.

Investment Director Wouter Schuitemaker will be attending the European Summit on Finance Shared Services and Outsourcing 2011 in London this March, and will be meeting with industry representatives. If you are a delegate at the Summit, or would like to speak with Wouter on a specific SSC inquiry, please contact him via email: wouter.schuitemaker@marketingbirmingham.com.