Want to Grow Region-Wide? Try the Centralization Route
Tech companies are able to transform their international growth into a turnkey operation through a broader definition of shared services
Majority of founders in Asia-Pacific need to look at the map of the region like a risk board. And to succeed as a tech startup, they will need to hastily enter new markets. For nearly all tech companies in the region, it is imperative to reach scale but there are scant resources available to guide them toward the operational excellence required to expand overseas. One area of focus hardly discussed is shared services, which refer to functions that are centralized for a group of companies, like those belonging to the same incubator, or to different regional branches of the same mother company. Often shared services are functions that are easily replicable, and do not need to be based in the same city such as payroll, finance, and administration.
Tech companies, which have a great product and have expanded overseas, are able to transform their international growth into a turnkey operation through a broader definition of shared services. Some centralize their digital marketing, others do so for their web development, and others for their data science.
These also don’t need to be done exclusively to the home country. Some companies centralize their web development to Vietnam, their content creation to the Philippines, and their data science to Singapore as per the strength of those respective labor pools. Each of these individual teams acts as a service provider for all internal clients across the region.
Centralizing functions normally hired on a country-by-country basis not only saves operational costs, but if done properly can accelerate growth. Why? Enabling the same professionals to serve all your markets means that they will learn faster as the build-measure-learn feedback loop will belong solely with them. They will not need to communicate their takeaways to any colleagues, nor cascade them as part of a formal training or knowledge management practice. They just take what they learn from one market and apply it to the others, and vice versa. If centralizing more of your functions into shared services is beneficial to a fast-growing startup, where, then, do you draw the line? This is as much a philosophy question as it is a business one: when do people need to be physically present in order for them to be helpful?
Culture is the word
Though our business cultures may vary slightly from country to country, generally speaking, Asians prefer a certain amount of facetime with one another for some functions. So while remote sales may work for some countries and cultures, it would be less than ideal in Asia-Pacific. There are just some roles where you need to spend time in person with your stakeholder, not only to carefully explain your product but also to build a relationship.
A shared service and a per country function will, of course, vary with your particular startup and the nuances of its business model and space. The key is founders should begin thinking from this view. Too often we focus on our company’s scalability in our product — how do we make it more attractive to new users, stickier to our current ones, and convert them into our premium offerings.
We can also fuel growth by taking as critical an eye toward our people operations, particularly in the creation of shared services that serve as hubs for region-wide expansion. Perhaps a better moniker for these hubs is centers of excellence: they’ll gather the best talent of your company in a particular domain, so that they may tackle the thorniest of your problems. Or to look at it from the military analogy that business terminology so often favors: they’re your generals in the war room who will help plan your conquest of Asia- Pacific.