ABB looks at India to reinforce back-office operations

The move will help the firm pare $1 billion in costs

ABB, the Switzerland-based automation and power technologies major, plans to consolidate its global back-office operations for human resources, accounting, and supply chain in India and Poland. This would help the firm cut annual costs by as much as $1 billion.

ABB, through its shared services unit, already has around 2,000 people working on technology and research in India, including services such as monitoring the working of about 3,500 robots at its customer factories globally.

ABB currently has 68 back-office centres globally providing finance, payroll and supply chain services. These would be consolidated into two large centres — India and Poland — and four regional ones over the next two years, Chief Executive Officer, Ulrich Spiesshofer said in an investors call last week.

“The process is under way and will enable us to deliver higher-quality services at best-in-class costs,” he added.

A  spokesperson said the India unit would add around 1,000 people in the first phase, catering to its operations in South Asia, West Asia and Africa.

ABB joins global manufacturing firms such as Caterpillar, Denso, Shell, Siemens and John Deere to set up captive back-office centres that would service its businesses globally.

A 2015 Deloitte survey had said India emerged as the top destination for global firms to set up a shared service centre for their businesses, with cost as a primary driver, to shift and consolidate their back-office operations.

In October, ABB had elevated its India Managing Director, Bazmi Husain, as global chief technology officer, based in Bengaluru, where the company does significant work on building power and automation technologies for global markets.