Shared service centres in the UK

An Expert's View about Business Centers in the United Kingdom

Posted on: 1 Sep 2010

This fact sheet summarises key aspects of shared service centres in the UK.

SHARED SERVICE CENTRES This information sheet is a summary of the shared service centre sector in the UK. The factors covered are: 1. Definition of a shared service centre 2. Key strengths of the UK for shared service centres 3. Further information The international industry organisation for shared service centres is SharedXpertise. For further information, please see: www.sharedxpertise.org/ 1. DEFINITION OF A SHARED SERVICE CENTRE A shared service centre (SSC) is a centralised business unit that undertakes internal business functions for divisions or subsidiaries of a particular company, rather than having those functions conducted separately. Setting up an SSC allows companies to ensure that standard operating processes are being used across the business. By consolidating functions into a centralised unit, operating processes can be standardised, streamlined and improved. Typically, consolidation of functions into an SSC also leads to a reduction in costs (usually achieved through a reduction in staff numbers or duplicated procedures). SSCs can support business units on a regional, national or international basis and are typically utilised for finance and accounting, human resources, logistics, procurement or facilities operations. 2. KEY STRENGTHS OF THE UK FOR SHARED SERVICE CENTRES The UK is home to all types of SSCs, including those that support national, pan-European and global business units ? indeed, the UK is the leading SSC location in Europe and has approximately one-third of all pan-European SSCs. SSCs are located in all regions of the UK, with particularly strong clusters in areas such as London and the South East, Manchester, Sheffield and Glasgow (for further information, please see Appendix A). For businesses that are setting up an SSC, the UK provides a number of strategic and commercial benefits, including: a) Europe?s largest SSC industry and the best track record in Europe for attracting international investment projects The UK is Europe?s leading location for inward investors (Source: UNCTAD, 2008). The country has a strong track record in supporting service sector projects, with particular expertise in meeting the specific requirements of national and international SSCs. Indeed, the UK has a strong support infrastructure for SSCs, including a skilled workforce with extensive experience of working in SSCs and a wide range of leading-edge technical experts such as developers of specialist SSC software solutions. In addition, the UK is home to Europe?s largest professional services industry, giving SSC operators a wide choice of accountants, lawyers and other professional advisers experienced in advising on SSC issues. For further information please see: www.sharedxpertise.org/ b) One of the strongest telecommunications and ICT infrastructures in the world A key requirement for SSCs is a world-class telecommunications and ICT infrastructure ? independent surveys regularly rate the UK as having one of the strongest infrastructures in the world. For example, the UK was recently ranked ahead of other European countries such as Germany, France, Ireland, Italy, Spain and Belgium in a global ?e- readiness? index (Source: EIU, 2009). A key feature of the UK?s telecommunications sector is that, due to deregulation, SSCs have a wide choice of providers of telephony and internet services. For further information please see: www.ofcom.org.uk c) World-class SSC skills and experience The UK has a well-educated workforce with the requisite skills to support the complex tasks dealt with by SSCs. There are over 2.3 million people undertaking higher education courses (with the highest percentage of students undertaking Business and Administrative Studies). Currently, more than 670,000 students graduate annually from the country?s 170 universities and higher education institutes. The UK also has the highest number of leading MBA courses in Europe, with 23 UK institutions in the latest global ranking of the top 100 MBA courses produced by the Economist Intelligence Unit in 2008. This compares favourably with the rest of Europe where the combined total of leading institutions is only 14. In addition, for SSC operators that require multilingual skills, the UK has a strong supply of language skills, with 38 per cent of the UK population being able to speak a language other than their mother tongue (Source: European Commission, Standard Eurobarometer, 2006). d) Flexibility of working practices and labour regulations The UK is renowned for having one of the most flexible labour markets in Europe, with labour regulations designed both to protect the employee and to ensure companies can operate effectively. Indeed, SSC operators are able to fully utilise the UK?s labour flexibility by operating shift patterns to meet the specific needs of the SSC (such as part-time working, evening or night-time working, weekend working and home working). Further information on flexible working and labour regulations in the UK is also available in the UK Trade & Investment information sheet entitled ?Labour Environment? and at: www.berr.gov.uk/employment/employment-legislation/employment- guidance/index.html e) Competitive salary and employer costs The UK has a highly competitive salary structure in the service sector, in contrast with many other European countries including Germany, Ireland, Belgium and Switzerland (Source: UBS, Prices and Earnings, 2008). In addition, employers pay one of the lowest social security contributions in Europe. For further information please see: www.hmrc.gov.uk/rates/nic.htm f) Competitive rates of both corporate tax and personal income tax The UK has a relatively lightly taxed economy, with the overall tax burden well below the average for the European Union and, in particular, countries such as Germany, France, Spain, the Netherlands, Belgium, Sweden, Denmark and Italy (Source: Eurostat, 2009). The rates of personal taxation in the UK are among the lowest in Western Europe. For further information please see: www.hmrc.gov.uk/rates/corp.htm g) Excellent international accessibility Many pan-European SSCs require excellent international accessibility ? the UK has the strongest air transport system in Europe, accounting for 217 million passengers and the top four busiest international air routes (Source: Eurostat, 2009). 3. FURTHER INFORMATION This information sheet was updated in July 2009. As information changes from time to time, please contact the organisations listed or UK Trade & Investment to confirm any item that you intend to rely on. This information sheet was produced by the Marketing Group of: UK Trade & Investment 9th Floor Kingsgate House 66-74 Victoria Street London SW1E 6SW Tel: +44 (0)20 7215 4957 Email: enquiries@uktradeinvest.gov.uk Website: www.uktradeinvest.gov.uk APPENDIX A EXAMPLES OF SSCs IN THE UK Company Location and details of SSC AstraZeneca Manchester: Pan-European finance SSC www.astrazeneca.com BAA Glasgow: Financial and human resources SSC www.baa.co.uk Bristol-Myers Squibb Chester: Pan-European finance SSC www.bms.com Cigna Glasgow: Insurance and healthcare SSC www.cigna.co.uk Eaton Corporation Glasgow: Financial and IT SSC www.eaton.com Ernst & Young Birmingham: Human resources SSC www.ey.com/uk Grove Europe Sunderland: Marketing and administration SSC www.groveworldwide.com IBM Greenock: Technical support SSC www.ibm.com JT International Manchester: Pan-European finance SSC www.jti.com Laura Ashley North Wales: Financial SSC www.lauraashley.com/ Liberata Sheffield: IT SSC www.liberata.com Newport: Finance SSC LogicaCMG Bridgend: Financial SSC www.logicacmg.com Marks & Spencer Manchester: Financial and human resources SSC www.marksandspencer.com National Australia Bank Group Glasgow: IT SSC www.nabgroup.com Novar Glenrothes: Financial SSC www.novar.com Quintiles Edinburgh: Financial and IT SSC www.quintiles.com Premier Foods Manchester: Financial SSC www.premierfoods.co.uk PricewaterhouseCoopers Birmingham: Human resources SSC www.pwcglobal.com/uk Procter & Gamble Newcastle: Pan-European finance, human resources, IT services and procurement SSC www.pg.com Regus Belfast: Pan-European finance and administrative www.regus.com Royal Bank of Scotland Manchester: Human resources SSC www.rbs.com Royal Mail Sheffield: Human resources SSC www.royalmail.com/ Sanmina Glasgow: Financial SSC www.sanmina-sci.com Siemens Business Services Durham: Administrative SSC www.sbs.siemens.com Shell Finance Glasgow: Financial SSC www.shell.com Tetra Pak Manchester: Pan-European financial SSC www.tetrapak.com Steria Manchester: Financial SSC www.steria.com Vertex Glasgow: Finance, human resources, marketing www.vertex.com and administration SSC Source: UK regional investment agencies, 2009
Posted: 01 September 2010