something to smile about? - Euromoney Institutional Investor PLC

TREASURY LOCATIONMANCHESTER & GLASGOWManchesterSSCeneManchester haslong been anindustrial andfinancial hub in thenorth of England.But, says RobertPink, it is a SSClocation too.© MARKETING MANCHESTERIn 1783, Richard Arkwright,inventor of the Spinning Jennyand father of the industrialrevolution, built his first textilefactory in Manchester.Based in the north of England, thecity quickly became a hub for thetextile industry, and a premierindustrial centre.Two hundred years later and thetextile factories have disappeared. Intheir place? Sophisticated sharedservice centres.Multinationals have traditionallylooked to sites in London, Amsterdamor Dublin to locate their Europeanshared service centres, but recognisingthe investment such centres bring to anarea, other European cities threw theirhats in to the ring. Manchester was onesuch city.Manchester’s riseIn 1997, MIDAS – the ManchesterInvestment and Development AgencyService – was created to promote thecity as a viable alternative to London orDublin.“We identified Manchester as ashared services location because Manchestershared the same labour forcecharacteristics as places like Dublinand Glasgow,” says Chris Norwood,development manager at MIDAS. Locationconsultants perceived that Dublinand Glasgow were over-heating andwere looking around for the next bigthing in SSC location selection, he adds,and MIDAS put forward an offer basedaround the availability of customerservice languages and technical skills aswell as a large international airport. Itmust have been persuasive. GeorgiaPacific set up its SSC in Manchester inChris Norwood, businessdevelopment manager at MIDAS: “Weidentified Manchester as a sharedservices location because it sharedthe same labour characteristics asplaces like Dublin and Glasgow.”1998, Tetrapak in 1999, andAstraZeneca in 2001.Popular shared service locations canbecome victims of their own success.Too many corporates join the party, theemployee base shrinks and costs rise.That happened in Dublin, says Norwood,and MIDAS is working hard notto allow it to happen in Manchester.“In 1998 eight SSCs arrived in Dublinat the same time and attrition in somecompanies rose to 75%. The ‘fear’ ofgoing to a location that would overheatbecame a major feature of locationselection. Location consultants havebeen trying to write Manchester off as‘overheated’ for the last five years everytime we have won a project.“The Manchester SSC communityhas grown incrementally over thattime and the ‘exceptional’ attritionlevels and associated salary inflationthat reached in Dublin five years agohave not been witnessed here (or inmany other successful locations).”To mitigate the prospect of Manchester’s‘over-heating’, MIDAS hascreated a shared services forum to discussbest practice on a quarterly basis.Norwood hopes this will foster a sharedservice community and will stop anystaff poaching; there are agreements inplace on salary benchmarking to helpthe process along.Employing capitalManchester is located in one of Europe’smost heavily populated regions, whichmeans corporates located there are ableto call on a large employment pool. Thecity supports 90,000 students at any one38 cf March 2004 corporatefinancemag.com