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Perspectives
Sustainable shared services location strategy
Key considerations for selecting GBS locations
In today’s shared services and global business services (GBS) landscape, organizations can’t afford to invest in locations that only meet strategic talent and cost objectives in the short term. Learn how to assess and select sustainable GBS locations for future scope and scale, expansion optionality, and balanced competitive dynamics in the longer term.
Shared services and GBS locations: A strategic outlook
Location selection for GBS organizations is not a one-time decision. According to Deloitte’s 2023 Shared Services and Outsourcing Survey, three-quarters of GBS leaders are planning to refine their global footprint now or in the near future. The survey respondents are primarily seeking greater cost savings and expanded access to talent, as competition in many GBS markets has put increasing pressure on both factors.
As GBS leaders develop their footprint or reassess their existing sites, which locations will best support these objectives and offer a more attractive competitive environment within the GBS sector? After decades of sustained GBS growth around the globe, there are no simple answers to the question. Few markets have been left wholly untouched by GBS deployments.
The best approach today is to target a location that will be sustainable for the GBS organization over the longer-term time horizon. In addition to the core location factors that we assess in our business doing location strategy work—such as talent, risk, and cost—we have observed three strategic considerations for selecting a sustainable GBS location in recent years.
Global business services (GBS) Strategic location considerations
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Capability expansion
The ability to deliver potential future capabilities in addition to current scope—especially more advanced or value-add services.
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Market expansion
The proximity to tier II or tier III GBS markets—which offers expanded access to talent within the current GBS structure.
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Market dynamics
The GBS sector trends around growth, attrition and wage escalation rates, and talent attraction—which serve as indicators of the market’s future trajectory.
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Learn more about each GBS location consideration below
As evidenced by results in the Deloitte survey, GBS centers continue to move beyond transactional-only services into more advanced capabilities. Centers often start with initial transactional back-office scope and then incorporate additional functions and advanced capabilities as they prove value to the business. Client examples include starting with accounts payable/accounts receivable (AP/AR) activities—and then adding financial planning and analysis and upgrading from IT support to technical capabilities. For this reason, successful GBS centers tend to grow in scope and scale over time, even in parallel with efficiency gains.
To make a sustainable GBS center location decision, organizations should consider the market’s ability to support both the current defined scope and potential future opportunities. This includes analyzing the talent supply, labor cost, and the precedent in the GBS sector for each of the relevant capabilities. These varying inputs can be assessed across potential future-state scenarios to inform the location decision. Planning for growth helps ensure the location can continue to meet business needs and deliver value for years to come.
Capability spotlightTalent supply data can be analyzed by transactional and advanced GBS capabilities to ensure a selected location meets current and future needs for the organization. Here’s an example for three core GBS functions in Bucharest, Romania.

Data: CityGlobe, Deloitte
For regional and global GBS centers delivering advanced services, more mature markets tend to offer the deepest talent pools, if at a higher cost point. But that doesn’t mean that GBS organizations should write off tier II and tier III locations entirely. In fact, considering these markets in conjunction with major hubs can be part of a sustainable long-term location strategy.
GBS organizations are increasingly expanding within current countries to tier II and III markets. This has been an ongoing trend for large organizations in India, but it’s now occurring around the globe. In Europe, for example, Airbus expanded from its Lisbon GBS center in Portugal to Coimbra, and Deloitte has opened a satellite office for our Bucharest delivery center in Iași, Romania. These sites offer increased access to talent, especially to recent graduates from local universities. They may also offer 10% to 25% cost savings, depending on the city, relative to major markets. Importantly these locations can leverage the existing GBS leadership, recruiting and legal infrastructure, and branding in-country, minimizing market entry costs and effort.
In a slight variation of this strategy, smaller or less well-known organizations may also consider entering directly into tier II and III cities. The required talent is increasing in these markets due, in part, to the distribution of the workforce triggered by remote work. And they can avoid having to compete directly with the top-branded GBS centers in mature markets. Select examples include Material Sciences Corporation’s recent entry in Querétaro, Mexico, and Primient’s new center in Łódź, Poland.
Market spotlightGBS organizations are increasingly expanding to tier II and III markets within their existing footprint. GBS market examples in Portugal and Mexico are provided below (non-exhaustive list).

Data: CityGlobe, Deloitte
Most mature GBS markets are competitive, but they are not all created equal. At the extreme end, some markets have experienced sustained talent competition and/or cost increases for many years. In our experience, though, many existing GBS markets still offer an attractive long-term trajectory for new entrants.
To assess the potential trajectory of the location, we typically target four variables related to market dynamics: sector growth, attrition, wage escalation, and talent attraction.
Sector growth: Number and type of recent GBS entrants, existing center expansion/ramp-up, and the perceived impacts on the market.
Attrition: GBS center attrition rates, including within target functions, in recent years for similar operations.
Wage escalation: GBS wage escalation rates in recent years, midyear adjustments (where required), and impacts to cost arbitrage opportunities.
Talent attraction: The market’s ability to supply talent in line with GBS sector growth, either by retaining talent in the local market or attracting talent from within the country or region.
As these variables are based on in-market data and qualitative insights, we assess these trends with our clients during due diligence visits in prioritized markets to inform the final location decision.
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