07 Mar, 2019
Once outsourcing became a business model, Shared Services centers was a logical and exponential outcome. Such centers are like business supermarkets, delivering key transactional processes and or administrative support under one roof. That results in clients getting to outsource finance and accounting, legal, information technology and even Human Resources in a bargain package that helps them consolidate productivity and reduce costs.
Historically, Shared Services was defined as delivery of processes to a company from a shared model. The sharing in this instance referred to services delivery across business units and a sharing of accountabilities and responsibilities between the shared services organization and its customers. There are different iterations of that model now, but the core definition remains attractive for firms, even as Artificial Intelligence and robotics are changing service delivery.
For the Caribbean, selling Shared Services, either in delivery or accommodation, may now be the region’s best outsourcing product. Some companies with a long history in the region have set up such centers here. Canadian activewear market leader Gildan established theirs in Barbados in 1999; Scotiabank launched its hub in Trinidad and Tobago in 2013. And only months ago, KPMG, one of the top four global professional services firm, opened its Shared Services center in Kingston, Jamaica.
To build marketing momentum and attract other big firms that want value from outsourcing, the Caribbean Export Development Agency will be promoting Shared Services at its second annual Outsource to the Caribbean Conference (OCC2019) in Curaçao May 6th to 10th. The Agency intends to highlight the Caribbean’s service possibilities, especially those beyond voice centers, and why partnerships in this region makes good business sense.
Operation size and space in the Caribbean are affordable, suitable and practical. Shared Services help these locations with economies of scale in real estate and business ready facilities. A company can benefit from Class A office space rental rates per square meter/ month as low as US$2.8 (US$0.26 per square feet) in Haiti, US$11.2 (US$1.04 per ft2) in Suriname and US$11.7 (US$1.08 per ft2) in Jamaica. In other benchmarked BPO markets like India, Philippines, Costa Rica, Colombia and Mexico, rental rates vary between US$12.4 (US$1.15 per ft2) to US$26.7 per square meter (US$2.48 per ft2).
The Caribbean’s diverse and skilled English-speaking workforce makes it an ideal location for most combined back office operations because it offers solid capability. Many Fortune 500 and other multi nationals already have a presence here, which means a center can recruit local talent who have first world business experience.
Shared Services also bring big savings on statutory and social security taxes and benefits like group health. Even better, the Caribbean’s labour costs are more competitive than North America, falling between 88% to 55% lower. Over 70,000 students graduate from higher education every year. The region also has the advantage of speaking several global languages with English, French, Spanish and Dutch spoken fluently.
The region’s proximity to major markets as a gateway between North and South America, and its modern infrastructure means set up and integration is seamless. That proximity, and recent telecom/internet advances in most territories make it easy to support cross border operations with other regional players.
Some other valuable benefits of Shared Services in the Caribbean for foreign firms were recently highlighted in a Smarter with Gartner blog: service reliability, simplification of effort and key insights that help partners improve business performance.
According to the blog, reliability adds value by meeting customer needs at a competitive cost. A reliable vendor allows a client to focus on improving and refining their own processes. “The Caribbean has already proven it’s a reliable business partner,” says Tessa Jacques – President of the Caribbean Association of Investment Promotion Agency’s (CAIPA). “Each country offers incentives that increase the savings to each investor and investment facilitation staff who stand ready to assist in any way.” The region’s territories also boast high functioning institutions, efficient government, and regulatory systems that are conducive to business.
The second benefit, simplifying effort, brings a seamless, positive customer experience for clients who may be expanding or who want their key processes done in a standardized manner and can leverage management expertise and governance across all business support functions.
Insights, often the best driver of business growth, are multiplied in Shared Services precisely because they bring untold value not only in the smart moves they allow companies to make, but also in market mistakes they help companies avoid. Insights from good data analysis offer opportunities to increase revenue, cut cost and improve business performance overall.
OCC2019 comes at a time when Caribbean economies are riding on growth north of the region. As this seems likely to continue for the near future, it will make it easy to sell the concept of Shared Services centers to firms that want partners who will join them in solving their business problems. Others will simply want the ease of setting up their own, as Scotia and KPMG did. “Many of these companies want to know that the local talent is technically capable to support their operations. We can offer that in the Caribbean,” says Tessa Jacques – President of the Caribbean Association of Investment Promotion Agency’s (CAIPA).
This article was originally published on the Outsource to the Caribbean website .