Singapore is emerging as a prime destination for shared service centres (SSCs), say leading finance experts.
Robert Half asked five local finance leaders why companies are increasingly turning to Singapore to establish shared service centres to support their global networks.
The responses were overwhelmingly aligned; the quality of the talent, combined with regional proximity, government incentivisation, and technologically savvy and process-driven teams make Singaporean SSCs an attractive option.
In the opinion of the experts interviewed, Singaporean SSCs provide a superior service which goes beyond transaction-focused activities to offering true business partnership support and guidance.
Quality talent ensures quality output
Access to highly skilled talent is an essential component of establishing a successful shared service centre.
For Clinton Ross, Program Manager for Finance Shared Service Centres, Singapore offers a premium pool of talent. “The workforce in Singapore is highly skilled, highly motivated and have an intuitive understanding of the processes which are unique to this country and region,” says Ross.
Peter Hamilton, Global Policy and Control Manager for International Baccalaureate, specifically targeted Singapore as the location for his shared service centre operations when outsourcing to low-cost countries did not meet the company’s objectives.
Hamilton expands: “One of the key reasons for setting up shared service centre in Singapore is because of the highly skilled workforce available locally. The Singaporean government has implemented a range of policies to raise the quality of the local workforce, including the incentivisation of staff training, development and career progression activities and restriction of immigration.”
For Soek Mui, Asia Shared Services Director, a strong work ethic and excellent communication skills set Singaporean talent apart from their competitors: “Professionals in Singapore are known world-wide to be very hard-working. We have a strong workforce, bilingual in English and Chinese, which is now highly sought-after by companies around the world.”
Regional proximity enables optimum service
Geographical location is a key reason why companies are increasingly looking to Singapore to set up shared service centres.
Amit Clifton Anthony, Regional Finance and Strategic Project Manager for Vopak, asserts: “Singapore is a key regional and global hub. The proximity facilitates better change management due to an understanding of local laws, legislation and the kind of talent required. This drives greater confidence in the Singaporean SSCs service proposition, which leads to a better business partnership.”
Hamilton illustrates the advantages of Singapore’s location: “Singapore can provide great value in terms of the global supply chain because it is a significant maritime port. Shared service centres based in Singapore are therefore in a prime location, with most of the global logistics players conducting operations here in Singapore. The country’s regional proximity attracts global companies, which in turn attracts top global talent.”
Soek Mui agrees and adds: “Singapore is located in a convenient time zone that situates it perfectly to service other key markets in the region.”
Government stability and incentivisation instils trust and security
“A significant benefit to companies setting up a shared service centre in Singapore is the government infrastructure,” says S Subramanian, Regional Finance Director, Essentra. “Tax benefits and incentives are important considerations.”
Hamilton agrees and adds: “Singapore has a very robust national infrastructure and highly business-friendly legislation. It is an excellent haven for shared service operations.”
For Ross, it’s not just the incentives, but the stability of government that is important to the long-term success of a shared service centre. “Political stability is a huge consideration when deciding which country to establish a shared service centre in,” says Ross. “Singapore’s government is very stable, and it is a highly compliant country, which means that companies can have greater confidence in Singaporean SSCs.”
Investment in technology drives efficiencies
Anthony explains that Singapore is significantly ahead of lower-cost countries when it comes to implementing automation.
“In Singapore, there is a significant investment in IT infrastructure. Singapore really embraces automation - from optical readers to auto matching, invoices are now handled purely within cloud technology.”
According to Soek Mui, automation has helped drive efficiencies across shared service centre operations in Singapore. “In my experience, automation has been an essential component of being able to deliver a premium service,” says Soek Mui. “Manual processing is time consuming and inefficient which doesn't value add to an organisation. You need automation with constant streamlining of processes to drive continual improvements in productivity.”
For Ross, automation is a key reason why shared service centres based in Singapore can offer a service that goes above and beyond the transactional. “Automation is very well-established in Singaporean SSCs compared to low-cost countries,” says Ross. “Finance professionals in SSCs understand the benefits of automation – that is, that it can free them up to offer more value-add services.”
Similarly, for Hamilton, a lack of automation is a key drawback for shared service centres established in low-cost countries: “In low-cost countries, there has been a history of low automation. A lot of the systems and processes are manual and lack standardisation.”
Process improvements create capacity for business partnerships
In the experience of the experts interviewed, Singaporean shared service centres are highly process-driven, driving efficiencies and allowing finance teams to focus on other key activities.
Ross shares an example from his own experience at Lloyd’s Register: “Singapore-based SSCs have an intuitive understanding of local process. For example, we identified that people were spending lots of time in unproductive processes in the finance general ledger area."
"Once we shifted to a Singaporean SSC, we started optimising and simplifying all of those processes. We were able to save a significant amount of time and give the SSCs the opportunity to focus on high value areas like business partnering, which is the future of SSCs.”
Shared service centre mandate shifts to business partnership role in Singapore
Expectations of the finance function are evolving as businesses increasingly look towards the finance function to provide business partnering support and drive performance. Similarly, shared service centres face a similar shift, and Singaporean SSCs are well-poised to rise to the new expectations.
Anthony explains: “Expectations of SSCs are evolving from being transactional partners to being business partners. More and more, SSCs in Singapore are not only providing the analytics and insights, but are advising and guiding the business from a strategic standpoint.”
Ross predicts that this shift will continue and drive an increase in the number of shared service centres in Singapore. “There will definitely be more SSCs established in Singapore over the next few years,” says Ross.
“SSCs in Singapore are poised to shift from the high volume transactional areas such as supply and invoices, to complex business functionalities such as tax and treasury transactions and true business partnership.”
Hamilton adds: “Instead of just crunching out the numbers, shared service centres are now providing advice to the business and are identifying the trends and causes that are impacting profitability. There is also the opportunity for SSCs to be advising the business on the establishment of systems, processes, and even the appointment of people within that business.”
Singaporean shared service centres are a value-driven proposition
As businesses look to drive efficiencies and streamline processes through the establishment of shared service centres, Singapore remains a competitive location, despite the higher cost.
However, as Subramanian asserts, the value gained from working with quality talent, in a stable political environment that fosters commerce and technology, overshadows the cost. “Singapore appears costlier on the face of it, but the other benefits outweigh the cost. It is a value-driven proposition,” says Subramanian.
Hamilton agrees. “The cost is significantly outweighed by value provided by the talented local professionals who provide a world class customer service experience to their clients.”
As strategic priorities shift for shared service centres from the transactional to the analytical, Singaporean SSCs are well-placed to lead this change.
Indeed, with a combination of highly skilled local talent, political stability, geographical proximity and with a focus on continuous process improvement and an early adoption of automation, Singaporean SSCs are perfectly poised to offer a premium service that extends well beyond the transactional, to one of true business partnership.