something to smile about? - Euromoney Institutional Investor PLC

Glasgow School of Art: part ofGlasgow’s cultural heritage“There is a ready supply of skilledtertiary-sector labour at extremelycompetitive levels,” says David Thorburn,COO at Clydesdale Bank, part ofthe National Australia Group. “This isone of the reasons why the bulk of ourUK treasury service centre operationsare now based in Glasgow.” DavidSmith, director of EMEA for theScottish Development International,an investment agency, agrees: “Much ofGlasgow’s growth and success can bedirectly attributed to a flexible, stableand motivated workforce with highlydeveloped skills for the treasury sharedservice centre.” That Glasgow-basedcorporates will pay 32% less in wagesthan London-based companies shouldalso be factored in.Glasgow’s financial districtThe International Financial ServicesDistrict (IFSD) is taking shape fast. MorganStanley, JPMorgan, esure andGoldfish have already moved in bringingwith them over 1900 new financesector jobs. It has been designed as a preequippedbusiness area to allow fasttrack occupancy. There is no waitingaround. If you decide that Glasgowoffers everything you need from a treasuryservice centre, you can pretty muchmove in tomorrow – subject to givingnotice to your current provider.The district is actively supported byScottish Enterprise Glasgow, and, whencompleted, will comprise over 20 millionsquare feet of office space. It willalso push Glasgow in to the top threecities in Europe for office availabilityand fifth for office value for money.GREATER GLASGOW & CLYDE VALLEY TOURIST BOARD“There is a ready supply ofskilled tertiary-sectorlabour at extremelycompetitive levels. This isone of the reasons why thebulk of our UK treasuryservice centre operationsare now based inGlasgow.“ David Thorburn,Clydesdale Bank“The treasury shared service centreis already a major employer in Glasgow.We now seek to build on thesestrengths by creating the highest qualitybusiness environment forcorporates. The competitiveness ofGlasgow in the market is compoundedby a cost base which is up to 40% lowerthan many of its main competitors,”says Ron Culley, chief executive of ScottishEnterprise Glasgow.World-class infrastructureWith the largest number of ISDN linesper capita in the UK and an extensivetelecommunications infrastructure it isno surprise to find Glasgow home to BTScotland, NTL and Thus. BT has evendesignated Glasgow as an eLocation,and is investing £50 million in its telecominfrastructure.New buildings in the IFSD have dualrouting – put simply, if there’s a problemwith one exchange, business isrerouted through the other with corporatesnone the wiser. “Our technicalpeople say the telecoms infrastructurein Glasgow remains better than almostanywhere in the UK,” says Eaton’sWard. But the excellent infrastructureprovisions don’t end at the phone lines.The IFSD offers excellent transportationlinks too.Glasgow offers the largest suburbancommuter rail network in the UK outsideLondon, and boasts two majorairports – Glasgow and Prestwick. “TheEaton Corporation is an $8 billionglobal business. Therefore, we have anumber of international clients. It isextremely important for us that ourEuropean and stateside clients andpersonnel are able to access Glasgoweasily and affordably,” says Ward, whocites Glasgow’s transport infrastructureas a compelling reason why EatonCorporation chose Glasgow. With theonset of the no-frills airlines such asEasyjet and Ryanair servicing the city,flights have become even cheaper andmore frequent.So would Ward recommend Glasgowto other corporates both as a placeto work and, perhaps moreimportantly, as a place to live? “The cityis flourishing. It’s a vibrant, bustlingplace to live. It’s got something foreveryone – lots of free museums, galleries,pubs and clubs, plus two majorfootball teams.” For those who perhapsdon’t follow Scottish football they areCeltic and Rangers. cfSHARED SERVICECENTRE OROUTSOURCING?Corporates can outsource back-officeoperations or create a shared servicecentre – the degree of control is thedefining factor. But which is best for you?“There is an increasing willingness tooutsource – a feeling that a shared servicecentre can take you to a certain point butno further,” comments Alex Hamilton, atLatham & Watkins. He has identified fourpressure points for corporates:»a desire to improve reporting and riskcontrol in treasury»cost pressures on the back office»increased requirements for treasurywhich is, in turn, struggling to growinternally»pressure to invest in new technologyThe question is a simple one. Can acorporate outsource its back-officetreasury operations and then repurchasethem at a lower price than it would haveotherwise cost? “Companies have to createa comfort zone. There has to be awillingness to allow providers to do certaintasks.” Though Hamilton admits there isan obvious corporate concern about a lossof control, it is largely a question ofswapping one type of control for another.corporatefinancemag.com March 2004 cf 41