Roundtable Debate: Globalization
Posted October 14th, 2009 by SSON
The 11th Annual Shared Services & Outsourcing week in Singapore provided an opportunity to discuss the globalization of services in today’s markets. Hugo Walkinshaw, of Deloitte’s Asia office, led the discussion.
By: Barbara Hodge, Editor, Shared Services News,
Hugo Walkinshaw: I’d like to start off today’s discussion by asking you all to what extent your organizations are running or planning to run a global services center. How do you define “global services,” and how does it fit into the corporate services delivery strategy?
Rodrigo Martins: At GE, we have been running global business services for many years, now. This includes payroll, travel & living (T&L) customs, and general accounting amongst others, being provided from centers located in many countries. Now, we are taking this one step further, and establishing regional and then possibly global centers: first for T&L – which could be run for every single country out of one or two locations. We are also taking some of the general accounting work and sending it to the Philippines and China.
Hence, from a service delivery standpoint, we are starting with regionalization for some products, and then going to a global model where this makes sense. And we’ve been fairly successful so far going in that direction. From a cost and quality standpoint, as we pulse our customers – GE businesses – and benchmark costs, periodically moving to global products make sense when the work is purely transactional. In other words, you can easily shift the work from one country to another, and when we have the IT platforms to support that process. In our case, T&L is mostly operated with Concur. That will enable us to run everything out of one or two centers globally.
Hugo Walkinshaw: What is striking when you discuss globalization with folks here, is that many people imagine one center, all under one roof, serving the world; but from a business continuity standpoint alone this makes no sense. So, at GE, what do you call a global center?
Rodrigo Martins: When product delivery or strategy is centralized. Two examples: T&Lis based out of one center, serving several countries. Therefore, we service multiple geographies across regions with a specific function, or part thereof; not multiple functions across regions. Another example of global center is our employee services (payroll, benefits, etc), where the product’s strategy, and some tools and know-how, come from one country, and the delivery is executed in several centers around the world. It is nearly impossible to have one big global center servicing all customers’ needs simply from a scale standpoint this would not be viable: GE has four strategic units with diverse businesses; in each country, we could have about 35 businesses; worldwide, we also have thousands of legal entities. The scale is simply too large.