By Aysha Wahid and Rizwan Hasan.
Location strategy is one of the few change programmes within the financial services sector that touches every part of the organisation. This inclusion of all parts of the business, from legal, compliance and human resources through to the more obvious business lines and supporting services, helps avoid the all-too-common pitfall of a never-ending cycle of relocation generated by a purely financial focus.
If you only look at the financial benefits, you could find yourself bringing the very same roles you moved overseas back to their original base at considerable additional cost. If you don’t or can’t, those services may simply fail.
The key is to do it right the first time and avoid having to do it again.
So, how do you do this?
The aim is to get the right people in the right place at the right time. There’s no doubt that the end game is cost, but there are things that should be considered along the way.
The most important thing is to focus on what is right for your business and ensure that you don’t just follow the crowd. After all, what is the right location for one business, might not be the best for another. Additionally, the target location may become saturated and therefore less viable for new entry.
The key to a positive and successful location strategy is research. The first thing to look at is your current footprint: to assess what services you have where; which clients you are serving from which existing locations; what infrastructure supports the existing services and clients; and your existing real-estate footprint.
The next move is to outline where you want your business to be and what you want your target state to be. Consider where certain services are needed in order to serve particular clients and where there are options to tap into specific talent pools or hotspots.
Strategically selecting locations across the globe can help tap into new markets and clients as well as giving current staff opportunities to relocate around the world. It can also help improve global standards and is a good opportunity to get teams across a range of functions and regions to start working in a cohesive manner.
As a result, a well thought-out location strategy can in fact work as a positive marketing and public relations tool for your business, both internally and externally. It is definitely worth considering what the impact on your business would be if you relocated certain services to particular locations.
You could, for example, tap into an already-established centre of excellence and help maintain employment in that area, or even encourage the development of a new hotspot in a new area.
It is important to think about your brand and what moving jobs or services will do to your reputation. In some cases moves to nearshore locations are a better option than offshore.
It is also important to consider regulatory and legal structures. There are compliance issues and regulatory constraints which must be taken into account and it is important to engage HR, legal and compliance from the outset. In the past banks have been penalised by the regulators for moving particular parts of their business to new locations and later had to pull them back.
For a location strategy to be successful, it is also necessary to consider the issues around hiring and on-boarding new staff in different locations and to ensure that adequate training and business-continuity plans are in place. The sensitive nature of such a programme means that human resources plays an important part in creating a communication strategy to ensure reputational and regulatory risk is mitigated.
Carried out correctly with the right level of prior research, a successful location strategy can provide numerous benefits for your business. As well as the obvious reduction in costs and operational efficiencies, it can also help provide a simple and transparent organisational structure, increase brand awareness and improve reputation.
So, the key is to take the time necessary to devise the right plan for your organisation and stick to it to ensure the anticipated benefits are fully realised. If an organisation is resigned to devising a new location strategy with constantly changing target locations, then maybe it’s time to take a step back and look at things in a different way.
To find out more about how Brickendon can help your business please contact us.