75% of Philippines Shared Services Plan for Expansion



SSON Editorial
05/05/2020

A clear trend among Philippines-based centers is to expand the scope of services over the next 12 months. A majority of 2020 survey respondents reported that their scale-up plans remain focussed on the Asian territories, with most keeping their efforts on-shore (50%), and others looking to scale up services in India (23%) or Malaysia (15%).

The growth in services is being driven by technology, knowledge, and value-adding competencies that have not historically been part of traditional Shared Services. Almost 75% of Filipino SSCs plan to expand their scope. Of these, 40% will be expanding geographically, 35% will add new service offerings, and 25% intend on doing both. For those expanding geographically, availability of skills and expertise tops the list of key criteria for evaluating potential locations, with 93% of respondents reporting this to be their top concern. This is followed by labor costs.

 

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Continuing in the tone of expansion, Global Business Services is consistently the preferred target operating model for Shared Services leaders around the world, with a large segment already committed to the model, and another planning to move to GBS within the next five years. GBS is generally characterized by a common leadership, process ownership, and practices delivered through multiple GBS centers across the world.

In the Philippines, 57% of GBS organisations are already making the move towards ‘digitalized’ GBS, while 29% are mature and are scaling their value-adding services. The vast majority of those already operating or planning a GBS intend to leverage automation for efficiency (70%), support the wider enterprise digital change agenda (48%) or expand their scope by incorporating new functions or services (44%). Of those who have not yet implemented GBS, an overwhelming 85% plan to do so within the next 3-5 years.

A majority of SSCs are targeting productivity improvements of between 8-15%, and the most reported means of achieving this will be through improving end-to-end process management (67%), Intelligent Automation (63%) and Continuous Improvement (59%). This trend is also seen consistently across both Europe and North America.

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