Ukraine: your new Shared Service Centre destination | KPMG | UA

Ukraine: your new Shared Service Centre destination

Ukraine: your new Shared Service Centre destination

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Ukraine in the World

How much does location matter when operating a successful shared services centre (SSC)?

The main idea of a SSC is to take the operations of individual units in a business and centralise them. The same services are then provided at lower cost but at the same or better quality.

This improves productivity as centralisation and standardisation creates additional benefits that increase competitiveness.

The pace of globalisation and the growing momentum behind technological development is pressuring companies to set up SSCs capable of providing 24/7 global service coverage from one place. As such, the SSC model is attracting more attention.

Key to all of this is cost management and the availability of talent. Without these factors in place, a company will not consider setting up a SSC in a particular location.

The right location is of utmost importance for the success of any SSC. Investors look for locations where labour costs are controlled and expected to remain so in the medium term. Additionally, the availability of a young and educated workforce is also crucial, especially given the fierce competition for skilled workers from companies clustering in the same cities as a SSC.

Therefore, management needs to thoroughly evaluate any given situation before committing to launching a SSC project. Costs, labour expenses, the availability of skills, and ongoing training opportunities are all critical factors.

In addition, don’t forget the technological drivers of change: how will data analytics, cloud computing and process automation affect your SSC plans?

Report goals

Central and Eastern Europe has enjoyed dynamic growth and attracted a lot of attention from those seeking to set up SSCs.

Growing numbers of investors recognise the benefits provided by the western-style business culture on offer, while at the same time not being too far from their home headquarters. Eastern Europe is thus considered an optimal location for SSCs primarily focused on the EMEA (Europe, Middle East and Africa) region (UTC+2).

Despite being one of the largest countries in terms of territory and people in the region, along with its abundant resources, Ukraine has often lagged behind more mature markets like Poland or the Czech Republic.

However, these countries are becoming more expensive, and talent has often migrated away from them. Ukraine, on the other hand, retains an excellent mix of highly educated young people at a fraction of the cost of other European and Central European countries.

Already Ukraine has become a prime destination for IT sector outsourcing, as well as the place for many wire harness assembly plants for the automotive industry. And despite political upheaval, many multinational companies maintain significant presence in Ukraine (including operating SSCs), benefitting from lower costs but the same high quality.

The goal of this report is to provide an overview of Ukraine as a potential location for a SSC or business process outsourcing (BPO) centre. In this report, we are providing general information about Ukraine and its benefits for investors. We hope it will assist investors who are considering potential locations for their SSC/BPO. We have provided the essential information for investors planning to set up an accounting or finance, internal audit, IT or R&D SSC.

For those already operating in Ukraine, this report should be helpful when it comes to evaluating the options for expanding operations. We have also covered the main information on legal matters relating to doing business in Ukraine.

We urge any company interested in setting up a SSC/BPO operation in Ukraine seeking for additional information to contact us.

KPMG would be delighted to provide you with more detailed information.

© 2017 KPMG-Ukraine Ltd., a company incorporated under the Laws of Ukraine, a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved.

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