Global Networks Versus Local Operations

The need to boost quality, productivity and speed

As the global economy slowly emerges from the recent crisis, companies are under great pressure to reduce costs and increase productivity. Many have had to load on debt to survive the severely depressed operating conditions and also find ways to streamline operations. One area they are looking to optimize is the backoffice. Functions like payments, payroll management or claims processing are still commonly completed locally, with in-house teams and a reliance on manual processing. This is expensive due to both the high labor and real-estate costs. The recent pandemic has also shown that this approach is fragile in the face of major disruptions.
 
However, shifting these processes to an offshore service center in a low-cost location is not an option for many companies. Some functions are too complex to complete in a traditional offshoring model or may face regulatory issues, especially in industries like health, finance or insurance. Also, wages in emerging markets have increased rapidly in the last decade and the cost advantage that these locations offered have become increasingly eroded. Companies need a solution that allows them to gain the benefits of different shoring locations, without any impact on quality and speed.
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Operational flexibility is a must

According to the McKinsey Global Institute, “companies face more complex unknowns than ever before, making flexibility and resilience critical”.2 As well as the threats caused by health crises, climate change or conflict, there is also the shift in global trade policies towards protectionism. As a result, demand patterns are hard to predict and can shift unexpectedly. Companies need to be able to move quickly in order to re-organize their operations or seize emerging opportunities, or they risk getting left behind. With businesses around the world collecting a wealth of real-time data on customers, speed-to-market is becoming the new battleground. But being able to scale operations or move into a new market at a moment’s notice is extremely challenging. It takes significant infrastructure investment and requires global access to skilled personnel, which few companies have.
 

High-performance resilience

A key lesson from the pandemic is that companies need to re-organize operations to be resilient on a global scale. The first step is to de-localize core functions, so if one country becomes shut down, operations can continue without disruption. But it’s not enough just to have a footprint of service centers throughout the world, they have to be tightly connected so work can be moved between different locations or shifted from offshore to onshore sites. This is because future crises may not be confined to a single country or region. Indeed, we may see another scenario where large sections of the world are shut down simultaneously.
 
Resilience is no longer about surviving a couple of weeks or months. It needs to be completely embedded in the operational model. Companies must be able to continue to operate with maximum productivity during periods of disruption. Merely having stable and globally redundant operations is not good enough anymore. Customers and stakeholders expect companies to demonstrate high-performance resilience. The very best companies will actually get stronger during crises.

Key Solutions

SPS has a global infrastructure of connected service centers. This network utilizes advanced technology and digital processes combined with a highly trained global workforce. As a result, we can create bespoke operational models for our clients that handle entire backoffice processes, with the same quality as an onshore solution, but with lower costs and greater flexibility. SPS’ approach has two main components  – Smart Shoring and Rapid Scaling. 

Chapters

Connected Global Operations

Chapter 2

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The Benefits Of Partnering With SPS

Chapter 3

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