The Maersk Shared Services Journey

SSON News and Analysis
Posted: 07/09/2012

AP Moeller Maersk launched its shared services operations in 2002, initially only on a small scale, through local, relatively uncoordinated initiatives. The Hong Kong operation, for example, offshored some back office operations to China to take advantage of wage arbitrage and costs. In 2003, shared services became a more globally coordinated effort and expanded its scope to include F&A, IT and shipping specific processes. Shared services centers are now located across three regions: China, India and the Philippines. Asia is a key player for the shipping industry, which explains why the region kick-started the shared services model. "We had such a large presence in the region, that it made sense to locate our centers there. We simply had the volume to make it work," explains Brandt.

Today, Maersk’s shared services employs approximately 6,000 people: 60% are based in India (across three centers), and 20% are each based in China (one center) and the Philippines (one center). "We grew from nothing to 6,000 in a matter of four years," explains Brandt. "For the first four years we took advantage of the labor arbitrage," he says. "But after that it was all about improving efficiencies and operating structure." Maersk is focusing on regions of major business importance, making the most of labor-saving opportunities, and at the same time ensuring appropriate back up in case of blackouts.

"The size and volume of processes and their ‘criticality’ dictate how we deliver that service," explains Brandt. "The more mission-critical a process, the more we’ll cover it across a number of countries and sites to ensure contingency and back up services should one center black out. If we provide 24/7 internal service, it is mission critical."

FINANCIAL CHALLENGES
The crisis is naturally making itself felt at Maersk, concedes Brandt. His group has seen a drop in number of business transactions. But this has been countered by moving more processes and added value activities into the shared services centers; and much of that "growth" has been achieved without a correlating increase in headcount.

"We are trending towards placing more business into our shared services centers to gain more efficiency. We’ve run a lot of our own development, and are increasingly more effective in terms of handling offshore processes," he explains. "It’s proven to be successful for us. Offshoring takes time but we’re definitely starting to see our initial investment pay off."

 

SSON News and Analysis
Posted: 07/09/2012

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