Scotland: Home of shared services

An article by Jim Mather, Scottish Government Minister for Enterprise, Energy and Tourism

Consider the best attributes Scotland has to offer the world and you'd be hard pressed to find multi-lingualism at the head of any recent survey. But it is that particular skill set that is drawing some of the world's leading companies to seek Scotland as a base for their shared service and Business Process Outsourcing centres.

Scotland boasts the unenviable reputation as being home to pan-European shared service centres and outsourcing sector over the last 13 years. The Eaton Corporation was the first company to benefit from Scotland's strength of offering in this sector. Based in Glasgow, Eaton's European Shared Services Centre provides internal financial and IT support to 19 countries. Staff in the centre are proficient in 14 different languages. Like many who have followed since, Eaton sought easy access to trained accountancy and IT staff as well as a capacity to communicate effective in a number of languages.

Scotland is a world leader in shared services and call centre operations. Nowadays all the main European countries are covered by shared service centres in Scotland. That work spans shared services and call centres working across a variety of sectors including financial services, telecoms, utilities, retail, motoring, technical support, travel and media. The call centre sector alone has doubled over the last 7 years.

The rapid advances in IT have resulted in significant reorganisations within companies which has resulted in the shared services model coming into its own. This can equally be said for private and public sector organisations. In fact any organisation which is required to communicate with customers has a need to continually challenge and improve its engagement with its audiences. Learning from where services can come together to drive greater efficiencies contributes a positive impact on the strategic goal for any business to operate competitively in the market.

There are many considerations underpinning the attractiveness of Scotland. Our salary costs, including indirect costs such as employer national insurance are among the most competitive in Europe.

Scotland has a long and proud tradition of excellence and innovation in the financial and business services sector. We have done much to retain our competitive position in attracting some of the world's biggest companies to view Scotland as the best place to locate a shared service centre.

Crucially this is also reflected in the prospects for graduate employment. Shared service centres are viewed by the workforce as a career aspiration and not just a temporary placement whilst waiting to move on to another job. Over the last 3 years, the shared service centre sector has secured over 6000 new high value jobs in companies in Scotland.

Close on the heels of Eaton establishing itself in the market, IBM set up a pan-European technical helpline centre in Greenock. The centre serves customers in 25 countries covering 23 languages and employs over 1,950 people at the Scottish site.

Glasgow's City Park is home to Dell's second largest business interest outside the US, offering customer sales and support.

Iron Mountain opened its biggest processing investment facility in Livingston 6 years ago. Its President Kenneth Radtke cited the strength of the location to other necessary services for the company, together with access to a pool of multi-lingual talent and a very high-quality staff base.

As well as the wealth of skilled graduates, accessible workforce and reduced staffing costs, Scotland also offers companies assistance to help them establish a Shared Services Centre in Scotland. Where applicable, The Scottish Government, through SDI can offer Regional Selective Assistance (RSA), which is the main investment grant scheme for businesses in designated areas of Scotland. If a business is located within a designated area, it could qualify for funding towards an investment project which will create or safeguard jobs. RSA is available to eligible businesses, whether they are Scottish-owned or owned or headquartered outside Scotland.

It is not just the private sector that seeks the services of a shared service centre. Over 80% of Scotland's public sector organisations spanning local authorities, health boards, government bodies and agencies have at least one shared service agreement in place.

With companies which command significant market presence including BAA, Shell, Morgan Stanley, Heineken, Diageo, BNP Paribas choosing Scotland as the best location for shared services operations, we are continuing to develop a hub of excellence in Scotland, for this business critical function.