The development of Shared Service Centers and Regional

Report
The development of
Shared Service Centers
& Regional Headquarters
in the CEE region
Dr. Arne Gobert
President of the German Business Club (DWC)
Managing Partner
BWSP Gobert & Partners (Tax and Legal)
Managing Partner - BWSP Gobert & Partners
Current from 1996
President - Deutscher Wirtschafts Club (DWC)
as the 4th President in the 20 years history of the club
The DWC is a serious business platform available in Budapest for getting
information about business, politics and other social and cultural events.
The Club is active in the Hungarian-German Business community and plays an
important role in the field of networking.
German Business Club
The Club has over 130 members, representing more than 110 companies
The members are private individuals, whose professional activities are
connected with German-Hungarian business relations.
With a population of 135 million people
Central and Eastern Europe is among the world’s most rapidly
advancing economic regions
The region is currently growing at a faster pace than Western
European markets and therefore offers a bright future for foreign
investors who are interested in regional opportunities and their
unique benefits.
Regional Headquarters
Regional Headquarters
Regional headquarters -Entity at the top of regional unit, including all activities of the
various business units, to take full responsibility for overall profitability and success of
this regional unit.
CEE headquarters are typically located at 2nd or 3rd hierarchy level
A CEE-HQ is an organizational unit that acts as an intermediary between
global/European headquarters and country operations in CEE and is located in or next
to the region.
They are either:
• Spin-off of an
Austrian subsidiary,
• Newly founded unit
• Result of a takeover
of firm with CEE
presence
Most CEE-HQs are still located in Vienna
Regional Headquarters in Hungary
• Hungary is still
seen as an
attractive option for
locating regional
headquarters.
Budapest Headquarters
Ageon
Alcoa
British Telecom
Citigroup
Flextronics
• As the key attribute General Electric
General Motors
of that
Huawei
attractiveness,
respondents named ING Group
Knorr-Bremse
highly qualified
Lufthansa
labor with strong
Nokia
language skills,
Panasonic Corporation
excellent
infrastructure and Saab
‘Class A’ real estate. SIA Central Europe
Volvo
Industry
Financial Services
Industrial Metals & Mining
Telecommunicatios
Financial Services
General Industrials
General Industrials
Automotive
General Industrials
Financial Services
General Industrials
Aviation
Telecommunication
Leisure Goods
Automotive
Financial Services
Automotive
Global HQ
Netherlands
USA
UK
USA
Singapore
USA
USA
China
Netherlands
Germany
Germany
Finnland
Japan
Sweden
Italy
Sweeden
Headquarters in the CEE
German Firms CEE Headquarters
Company Name
Allianz
Bayer
Beiersdorf
DHL
Heinrich Boell Foundation
Henkel
Knorr Bremese
Lufthansa
Robert Bosch AG
RWE
SAP
Siemens
Skoda (Volkswagen)
Industry
Insurance
Pharma
Cosmetics
Industrial Transportation
NGO
FMCG
General Industrials
Aviation
Electronics
Oil & Gas Producers
Software & IT
General Industrials
Automotive
Regional Headquarter Location
Vienna
Warsaw
Vienna
Prague
Warsaw
Vienna
Budapest
Budapest
Vienna
Prague
Bratislava
Vienna
Bratislava
Shared Service Centers
Shared Service Centers in Hungary
Shared Service Centers - are entities formed for internal company purposes which are
responsible for the migration and execution of specific non-core operational tasks that
would otherwise be performed by the core businesses of the company. By centralizing in
fewer locations companies can standardize and integrate processes allowing them to
operate with greater efficiency, at a lower cost and with the flexibility to more easily
respond to changes in demand.
•
•
•
•
•
•
Growing into one of the country’s largest employers with 30,000 jobs.
Approximately 100 SSCs in Hungary.
Primary employ foreign language speaking, educated workforce.
Leased office space reaches 200.000 sqm.
80% are currently in the expansion phase.
Services include:
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Finance
Accounting
Procurement
Logistics
IT
HR
Transactional roles and complex, high-end, value-add activities.
Regional shared service clusters have
formed
Selected shared service centeres
in Hungary
Criteria companies use when deciding in
which country to locate an SSC
1.Workforce
(availability, capability education, language skills, wage
costs and labour productivity)
2.Infrastructure and
premises (availability of office
space, rental costs, reliable
telecommunications networks,
optical fibres)
3.Stability
(political and economical,
investment support)
Number of centers in the CEE region /
Employment from these centers
Shared Service Centers in Germany
Past Shared Service Center Trends
Thank you for your attention
Backup Slides
CEE region attracts more SCC
operations than Asia, North Africa,
Western Europe and the Middle East
• More than 20 percent of offshore projects by European firms have in recent years
gone to the CEE region
• “Hot Spots” are Bratislava, Brno, Budapest and Wroclaw, while Kosice, Bucharest,
Hradec Kralove, Trenčín, Ostrava and Sofia
The CEE offers many
advantages, such as low
wage costs for a talented
labour force, as well as
many foreign languages
spoken, a business
friendly environment and
a good quality of life.
Comparing Hungary to the CEE
The methodology covers following fields: Starting a business, employing workers,
paying taxes, enforcing contracts, protecting investors, closing business and trading
across borders.
Economic Stability in 2009
Challenges and Trends
Challenges and Trends
Source: Roland Berger
GDP forecast based on purchasing power
parity (PPP) per capita (EU-15 = 100) [%]
CEE countries are vastly losing on competitiveness
Only Poland is improving continuously
The main advantage of CEE will still be
its competitve labor costs
Unit labor costs in % of EU-15, 2009 [%]
Especially
Slovakia, Poland
and Hungary will
remain attractive
production
locations.
A growing and a shrinking Europe –
Projected change: 2008-2030
Forecast: GDP vs. GDP per capita
Future trend: CEE HQs move from
Austria to CEE
Nokia moves headquarters for its CEE region from Austria
to Hungary.
Nokia keeps its sales
unit in Austria, with
a strong local team
that will continue to
sell Nokia devices,
offer Nokia services
and ensure customer care for our products but the regional
headquarters will be moved.

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