Locating Information Technology Centers
There has been a proliferation of Information Technology (IT) centers. Underlying drivers have included business growth, adoption of new technologies (e.g., Artificial Intelligence, additive manufacturing, Internet of Things), digitization of supply chains, cloud computing, increased use of social media, and cybersecurity. Many companies have adopted a “follow the sun” strategy for locating new IT Centers. We have seen significant geographic deployment in countries such as India, Malaysia, eastern Europe, selected Latin American nations, and the U.S. WDG Consulting can guide your executive team on location optimization for IT centers within a geographic region.
One trend that has emerged in deployment of IT centers is the tendency to gravitate toward more mid-size (e.g., tier 2, 3, & 4) metro areas. Rationale embraces the human resource part of the location equation. Companies are seeking labor markets where talent demand is not outstripping supply, labor costs are moderate, turnover is low, and there is reduced risk of future supply/cost pressure. WDGC has been at the forefront of finding smaller to mid-size locations for IT Centers housing functions such as software development, software applications, data management/analytics, mobile technologies/applications, website services, project management, and cybersecurity.
Of course, large scale and/or centers requiring hard to find skills will prefer locations in major tier one metros. Accordingly, WDGC has also counseled corporations on siting IT operations in tier 1 metros. One of our specialties is selecting optimal sub labor market in the more sizable metros. Given increased resistance to longer commutes, it is important that the new center be situated close to where resident skillsets reside.
When partnering with our clients on determining where to site a new IT center, WDGC follows a time-tested systematic process. This embraces:
- Defining operating requirements especially the mix of skilled and experienced talent
- Determining the geographic search region
- Agreeing on any benchmark locations that should be included in the analysis
- Relying on desktop research identifying a longlist of the most promising locations
- Issuing a confidential RFI to lead development agencies in longlisted locations to elicit intel such as roster of technology companies
- Ranking/scoring the longlist and recommending finalist locations (i.e., the shortlist)
- Conducting firsthand research (e.g., IT employer interviews) in each shortlisted location
- Recommending the best long term location that balances labor market, cost, access, office space, natural disaster risk, and other factors.
- Securing incentives and real estate commitments
- Charting next steps to implement WDGC recommendations, including HR related.
The next time your company requires a new IT center location, contact WDG Consulting to learn how we could add value to the decision-making process.