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Finance

How to Select a Strategic Location for SSCs

Thomson Reuters Tax & Accounting  

Thomson Reuters Tax & Accounting  

Today, many multinational organizations are going through some kind of finance, tax, or IT transformation project to drive efficiency and reduce costs. Often, these transformations include the use of technology to automate processes or centralizing common functions through the use of shared centers. No matter what delivery model that your organization finds best to support statutory reporting, there are four elements that must work together in harmony to enable success: process, people, data, and technology.

For this multi-part blog series, we’ve interviewed industry experts and customers just like you to get their take on these crucial four elements and what they mean for centralizing and standardizing compliance operations. In our second installment, we hear from Shane Nolan, Senior Vice President at IDA Ireland, as he talks through trends he’s seen in the market for shared service centers (SSCs) and why Ireland is a strategic location for companies looking to centralize their operations.

What is a country development agency and how do you help customers?

The role of a development agency is to attract and support employment creating foreign investment. IDA Ireland’s role is to do just that: attract and support employment intensive investment from the World’s leading brands to the benefit of their business and Ireland’s economic progress. We have 20 offices internationally from Sydney to San Francisco and from Tokyo to Texas, and we are one of the oldest inward investment agencies having been established in 1949.

What are some trends you’ve observed in the market for SSC’s/GBS?

From our work with the 200+ centers in Ireland, we have seen a move towards the Global Business Services (GBS) model over the past decade with Ireland home to global process owners driving standards across all sites within their organisations. As part of this trend, we are also seeing quite diverse activities brought into the GBS center – HR, marketing, facilities management, sales. In fact, with the evolution of digital tools and more and more customer interactions becoming digital, we are also seeing quite a lot of customer facing roles become centralized in Ireland. The fastest growth area by far at present (from an activity perspective) is inside-sales. Also, the advent of automation is causing many sites in Ireland to move employees in transactional roles into more analytical or insight-based roles.

Why should a company look at Ireland as a strategic location?

We’ve been at the forefront of shared services innovation since the early 1990s where Ireland was the defacto consolidation point for shared services projects right up to present where centers in Ireland (supported by IDA-led GBS-related initiatives) are embracing robotics, automation, and emerging AI tools to drive efficiency, and retrain/redeploy staff into higher value activities.

What incentives are there for companies to set up operations/SSCs/GBS in Ireland?

We provide employment-creation incentives across large swathes of the country.  We also have one of the most attractive corporation tax regimes globally (with a top line corporation tax rate of 12.5% and an attractive suite of tax incentives for R&D activities in Ireland – 25%). For GBS specifically, we have designed a suite of supports to incentivise SSCs or GBS centres to embark on transformation or automation projects and we have also partnered with the education and vocational training sector in Ireland to develop funded courses in automation, GBS and enterprise analytics to help sites in Ireland to continually evolve and enable their employees to migrate to higher value activities.  For GBS education, Ireland is one of the only countries that offers GBS professionals a suite of courses from Cert to Masters (MSc) in Global Business Services. With our 25 year+ track record in shared services and now global business services, there is also a very mature base of management talent in GBS in Ireland, well experienced in both global process consolidation projects as much as global transformation projects.

Can you provide some examples of some of the funding grants that you offer clients and how customers can apply?

The most popular grants that GBS clients avail of are employment creation grants, training grants (as part of transformation projects) and GBS transformation grants (which support pilot projects in robotics driven transformation). The application process is straightforward guided by IDA relationship managers, and the approval cycle for funding is within weeks.

What are some tips you have for clients on how to make better decisions for their location strategy?

Talk to other companies. Many prospective investors are quite surprised about how open other investors are in Ireland about their experiences and most importantly, what they have learned and what they might do different next time round. While this may sound counter-intuitive, it’s also useful to know your exit strategy before you make a location decision as there may be may reasons outside your control which may cause you to revisit your location choice and an inability to reverse a decision can be very costly indeed.

Anything else that would be good to share?

The best talent is globally distributed. While any one particular location may present an initial abundance of local talent, in order to help your organization grow over time, and particularly to drive innovation, you will need to bring in talent from other countries to supplement and enhance local teams. Therefore, choosing a location with a pro-business emigration policy is also vitally important.

About IDA Ireland

IDA Ireland’s main objective is to encourage investment into Ireland by foreign-owned companies. Our success is measured by the impact on the Irish economy of FDI and IDA supported companies.

For more information about technology solutions that can help you automate, centralize, and standardize compliance tasks in a Shared Service Center, visit our Statutory Reporting and Indirect Tax Compliance pages.