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Service centers and outsourcing

Competitive edge from service centers and outsourcing

Many companies have already switched to a service center model in their financial, reporting, IT, HR, customer service and acquisition operations, or have begun exclusively using Shared Services and Outsourcing (SS&O).

Globalisation and accessibility of information technology enable new ways of doing business. Nowadays companies also utilise the service center and outsourcing model in operations more closely associated with business, such as research, product development, taxation and legal matters.

Service centers

Service centers are a means of facilitating qualitative and financial benefits. A service center solution may be driven by changes in the business model (e.g. a client, adoption of the principal model), corporate reorganisation, a need to improve the quality of operations, decrease in the level of costs or improvement of control and transparency.

Operative cost savings from implementing a service center are typically between 20-50%, depending on the company’s starting situation and the conditions specified for the service center model. The pressure on companies to improve the efficiency of their operations challenges them to also re-evaluate the locations and processes of their existing service centers.

How can we help?

The adoption of a service center is typically a project of 6-18 months, during which scattered operations in business and regional companies are transferred to the service center. We can help you

  • define an implementable service center strategy and draw up a tangible example based on which management can make a decision about how to move on
  • plan a concept that can be implemented with regard to the company’s structure, business model and known future changes
  • analyse and choose a physical location for the service center that best suits the company’s criteria and apply for any available subsidies
  • plan in detail the legal structure, steering, management and service model, organisation, data systems and processes of the service center
  • draw up a detailed implementation and transfer plan
  • evaluate the effects on the current operating model and personnel and draw up a detailed plan of action to avoid potential risks
  • construct the service center at the desired location and choose and manage other required local partners (premises and infrastructure, recruitment, local authorities etc.)
  • draw up detailed, unit-specific plans for transfer, effects and change
  • transfer operations from individual countries and businesses to the service center
  • optimise the structures left in the countries and businesses and ensure the realisation of the plan
  • evaluate the business benefits of an existing service center
  • improve the efficiency of a service center’s services and expand them
  • support the arrangements related to the location and ownership of the service center.

Outsourcing

The scope and structural complexity of outsourcing are increasing. The very first outsourcing contracts were long-term bilateral agreements. Today with the great accessibility of information technology, the trend is towards a multi-sourcing model, where the responsible supplier acts as a procurer and provides the other suppliers, or where a group of suppliers collectively offers a bunch of services.

How can we help?

The different stages of the lifecycle of outsourcing have their own challenges. We will focus on the whole picture and study the entire contract period and special questions related to each stage. We can help you

  • identify the operations to outsource and draw up a tangible example based on which management can decide whether outsourcing and partner selection should be planned in more detail
  • define a detailed work distribution and responsibilities between the service provider and the client
  • define the required internal know-how and resources for the management of the outsourced service and the changes needed for the company’s own organisation when transferring to an outsourced service
  • define the requirements and evaluate potential suppliers
  • negotiate the right terms
  • draw up agreements that take key factors into account and cover the sharing of immaterial property, performance criteria and penalty fees for negligence
  • evaluate the effects on personnel, plan the details of implementing changes in operating methods and personnel
  • implement the adoption of the service and the required changes in processes, data systems, legal structures, tax arrangements and organisation, as well as inform employees about changes in their working environment
  • manage political, legislative and operative risks related to the partner, outsourced operations or the local statutes of individual countries
  • check and manage existing contracts and resolve disputes.
How can we help you? Send a proposal request and we will contact you shortly.

Contact us

Kimmo Nieminen

Kimmo Nieminen

Partner, Consulting Leader, PwC Finland

Tel: +358 (0)20 787 7504

Mikael Guarnieri

Mikael Guarnieri

Partner, Consulting, PwC Finland

Tel: +358 (0)20 787 7805

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