Citi is witnessing huge growth in the number of SSCs that they support, now totalling around 300 in Asia alone and more than 1,000 globally. According to recent insights from Citi Treasury Diagnostics, 71% of top-tier corporations headquartered in US or Europe have already established SSCs, while 45% of such companies headquartered in emerging markets have done so. They anticipate that this gap will close quickly as companies globally recognize and realize the benefits of centralization.

Locating the SSC
Citi believe there are a variety of factors that influence companies' choice of location for an SSC including: the physical and economic infrastructure, such as availability of labour, utilities, telecom and real estate; strategic and operational issues such as investment benefits, political and economic risk, and the regulatory environment; and lastly the day-to-day experience of operating an SSC, such as lifestyle and the language, culture, work ethic, skills and productivity offered by the local workforce. This has head to companies choosing low cost countries like India, Malaysia, China and the Philippines in the past. Citi are seeing secondary cities in China and India emerging as shared services locations.

In China, Shanghai traditionally has the highest concentration of SSCs. However, some companies are now looking to set up SSCs further west to take advantage of lower costs, while others are opening SSCs in the north of China to leverage enhanced foreign language skills.

(More in Sandip Patil, Citi's regional head, global liquidity and investments, treasury and trade solutions excellent review of the role of SSC in facilitating growth in Asia here.)

Disatisfaction with Shared Service Centres
A recent SunGard 'Market Insight' study shows a marked difference in perceptions about shared service centre (SSC) levels and capabilities between the users and suppliers of these technology-based services:

• 40% of respondents whose businesses are serviced by the SSC felt that it was not meeting their Service Level Agreements (SLAs) that had been set, only 3.4% of respondents who work in a SSC identified that this was a problem.
• 36.5% of the respondents whose businesses are supported by the SSC state that they are dissatisfied with service level results while only 19.7% of the respondents from within the SSC report the same perception.

SunGard belief that this is due to are lack of communication, workflow and visibility, all of which can be mitigated through recent technology advancements such as online portals, workflow tools and sophisticated reporting functionality.

The study also revealed a shift in the drivers for migrating to an SSC with companies now focussing much more on:

• operating more strategically by standardizing operations across the company(This grew from 11.8% in 2010 to 21.2% in 2013
• companies with mature SSCs, when asked what they would do differently when setting up an SSC, 58.9% of respondents said they would standardize processes and 53.5% said they would implement technology.

C.J. Wimley, COO, SunGard's Corporate Liquidity business, commented, "When a shared service centre is created, all too often we see the centre adopt some level of automation, but it tends to reside only within the core.  As a best practice, the entire enterprise needs to be linked together through a single, centralized platform.  By creating dashboards, business process automation and enterprise wide collaboration companies can operate smarter and see a dramatic improvement in the effectiveness of a shared service centre."