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BUSINESS SERVICES: Reduce duplication to multiply success
By Catherine Zacchi

Businesses today often operate multiple offices scattered across the country, even around the globe. A growing number of savvy institutions are consolidating administrative services to streamline processes, reduce costs and improve quality.

Leaders in private and public organizations have established shared service centers in West Virginia. They include: Owens Corning’s Global Business Shared Services in Charleston, W.Va., which has handled payroll, accounts payable and employee travel expenses for employees since 1993; Mountain State Blue Cross Blue Shield, which is investing up to $27 million on a new corporate headquarters in Parkersburg, W.Va.; Orrick, Herrington & Sutcliffe LLP, which invested $10 million to consolidate its finance, accounting and technology operations into one center in Wheeling, W.Va.; and the U.S. Department of Treasury Bureau of Public Debt’s Administrative Resource Center in Parkersburg.

International law firm Orrick, Herrington & Sutcliffe employs nearly 1,000 lawyers. The firm has offices in such far-flung places as Beijing, Tokyo, Paris, Rome, London, New York, San Francisco and Washington, D.C. It also has 175 employees in the Global Operations Center (GOC) in Wheeling. The center handles computer network management, help desk services, billing, collections, library services, human resources administration, as well as document and transcription services.

In 2000, Orrick retained site selection professionals to assess whether and where a shared services center should be established. Orrick partner Michael A. McAndrews was on the search team.

“The idea of centralizing administrative functions is not new,” McAndrews said, “but had never been done in our industry before. We conducted an intensive location search in the 48 contiguous states. Each site was evaluated based on selection criteria that included quality of work force, accessibility, costs and infrastructure. Wheeling had the best combination of advantages.”

Those advantages included square-footage that cost significantly less than in competitive states, access to Pittsburgh and its international airport, and proximity to other metropolitan areas. The comparatively low cost of real estate and square footage in West Virginia catches the attention of businesses from outside the state, said Will Turani, director of the Global Operations Center (GOC).

“But our real differentiating advantage is our work force. West Virginians have the necessary skill sets and work ethic that are second to none. We are loyal and genuinely committed to the well-being of the companies we work for. This is clearly evident in our state’s labor turnover rate, which is the third-lowest in the country.”

Since the GOC opened in 2001, Orrick recovered its initial investment within two years and realizes annual savings of approximately $5.6 million.

“The center not only effectively controls costs, but delivers outstanding quality,” said McAndrews. “To service our offices from Beijing to Paris the GOC has to respond regardless of time zone, 24 hours a day. The operation has succeeded beyond our expectations.”

The Administrative Resource Center (ARC) is a franchise service center within the U.S. Treasury’s Bureau of Public Debt. ARC provides accounting, travel processing, procurement, human resources and other services to other federal agencies on a reimbursement basis. The center employs a staff of 560 in Parkersburg.

“The Bureau of Public Debt always had high quality administrative services,” said Cynthia Springer, ARC executive director. “Public Debt saw an opportunity to extend those services to other federal agencies. In the 10 years since, our business has continued to grow.”

ARC is one of four federal agencies recognized as a Financial Management Center of Excellence.

“Clearly one of the reasons for our success is our people,” Springer said. “The center employs well-trained professionals. The high quality of life and low cost of living contribute to the center’s high retention rate and that, in turn, produces very proficient employees.”

Springer also cited ARC’s Internet-based infrastructure. The Internet gives ARC customers easy online access to the center’s automated support systems for accounting, travel processing and other administrative functions.

“With our systems, experienced people and low overhead, ARC can provide high quality services at less cost to our customer agencies, freeing them to perform their primary missions more effectively,” she said.