Creating Global Capability Centres in Eastern Europe

Major manufacturing conglomerates of the world are establishing Global Capability Centres (GCC) in Eastern Europe. A $6 billion revenue-generating ATM and Self-checkout manufacturing company’s customer care centres (CCC) were distributed across 135 locations (name withheld for confidentiality). There was no single approach to support all employees and customers throughout the specified sites. Therefore, they decided to bring together their CCC to improve quality and consistency with the following key objectives: –

• Support company’s services portfolio across 160 countries with employees who could speak 17 languages

• Introduce a scalable services model, where the GCC can support company’s end retail, and financial customers

• Bring together all supporting functions – Service Operations ,Service Desks and Intelligent Dispatch Team (logistic coordinators, parts planning, dispatch teams) to reduce machine downtime and to improve customer experience

• Facilitate knowledge sharing between all CCC team members, and retain regional knowledge in relevant regions

• Introduce new market trends (Robotics/Omnichannel Strategies), and scale if the pilot proved successful

• Redesign processes to deliver consistent and exceptional customer experience

The GCC aimed to save the business more than $100 million over five years, and maintain low-cost operations, while delivering high value services to external and internal customers. Company wanted to bolster its brand image of being a preferred partner for their end customers.

Planning and Execution

The proof of concept for the GCC was initially built on a small scale with minimal incremental expenditure. When the GCC’s value was delivered to management, company wanted to iteratively evolve and scale its resources, services and capabilities.

Stage 0 (Planning): The key milestones at Stage 0 was to select the country of operation and market entry strategy. Independent analysis identified Serbia as an optimal GCC location based on its strong service culture, multilingual talent with high technical knowledge, and solid city infrastructure. Economic incentives provided by the government, along with a highly competitive workforce, meant that company could employ and on-board the best talent. The company chose a local specialised partner because of their background in international business, their cultural heritage, their ability to implement a rigorous hiring process that attracts high calibre candidates and suitability to support an excellent Service Delivery Process.

Stage1 (Build): Company strived for maximum availability (minimum downtime of machines). On an average 22-24 million machine breakdown incidents were received annually, 12 million incidents were solved via machine-auto resolve. Service Operations Centre (SOC) handled remaining 10-12 million incidents. The SOC comprised of Service Desks such as Level 1 and Level 2 Helpdesk, Network Operations Centre (NOC) and Incident Management. The SOC Service Desk helped in remote resolution of the problem. If they could not solve it remotely, they forwarded the incident to the Intelligent Dispatch Team (IDT). The IDT comprised of Logistics Coordinators, Parts Planners and the Customer Engineer dispatch team. This team identified where the broken part was available, and dispatched a customer engineer that was nearest to the customer location. On average, 3 to 5 million incidents were resolved remotely by the SOC Service Desk, and for 7 million incidents customer engineers were dispatched to the customer site. In the start-up phase, Company employed industrial engineers who mapped out the process per location. The old generation of CCC passed the knowledge on to the GCC. (N.B The old generation of CCC were distributed across 135 locations, and each location did not have all the components of SOC and IDT.)

Stage 2 (Transfer): The processes transferred to the new generation of GCC were standardised. Individual teams were defined such as Help Desk Support, Integrated Service Desk, Network Operations Centre, Incident Management, Cash Management, Asset Management, End to End Services, Software Support, Logistics Coordination, Parts Planning, Reporting, Data Analysts, Big-Data, and Customer Engineer Intelligent Dispatch. All team members were trained cross functionally, and located at the same GCC, which meant that there was a hub of transferable knowledge that led to faster incident resolutions. Company’s strategic partner helped with the talent acquisition by promoting job specifications via various channels, shortlisting, and building a database of qualified candidates (25,000 CVs). Candidates were tested for language and IT capabilities, hired on payroll and trained for the job. For the first six months, employees were on partner’s payroll, and after achieving required proficiency, they were transferred to Company permanently.

Stage 3 (Operate): Company provided a fast start with their own facility infrastructure and management operation. Local partner made a substantial investment in software, processes, and people to promote this GCC. In the initial years, the GCC was concentrated on the SOC and IDT; in later years infrastructure activities such as HR, Communications, Procurement were migrated and today the GCC has 104 teams supporting various Company’s lines of business.

Organizational Benefits

Deploying and evolving a GCC enables organizations to standardize and improve the quality and performance in an organized manner, in good time, while cutting costs. Main benefits are:

1. Strong human capital pool and labour arbitrage: Work for 2,500 employees was migrated to GCC. Jobs from 135 disparate high-cost locations were centralized.

2. Real estate savings: 135 sites were consolidated by closing and selling sites.

3. Government grants/incentives: Company received millions in government grants for new hires, and in addition training, VAT and city infrastructure incentives.

4. Company has a state-of-the-art scalable GCC, offering 104 varied services in 17 languages, and rapidly developing new trends in the market such as; Omnichannel Strategies and Artificial Intelligence.

5. Company created a Disaster Recovery Centre in Bosnia and Herzegovina, thus Serbia, Bosnia and Herzegovina were also staged as new business outsourcing destination.

We’re entering an era where providing high end customer service is no longer an after-market concept but more a strategic asset. Eastern Europe is the perfect staging ground for this change.

GCCs improve organisational capabilities by centralising expertise, stimulating innovation, optimising resources, enabling dynamic capabilities, and combining global reach and local insights enabling organisations to respond faster and more effectively to market developments. Eastern Europe skilled workforce, cost advantages, improving infrastructure, government support, market potential, adaptability, and sustainable educational framework position it as a significant innovation hub and value creator in the manufacturing industry. The move eastward may well be remembered as a defining trend of the 2020s, reshaping the very geography of the global service economy.

About the Author: Prachi Misra has almost two decades of experience in Procurement, Supply Chain & Operations. She has held position of Group Director for manufacturing companies and worked as a McKinsey expert for various clients.