A couple of weeks ago I penned a post on Finding the Right Site where I discussed a recent article in Strategy + Business on five factors for finding the right site and noted that I thought there were at least six critical factors. It wasn’t long before Dick Locke corrected me and upped the count to seven. However, after reading this recent article in Global Services on Location Selection Best Practices, I am now convinced that there are 9 Cs of site selection.
In addition to the five Cs, outlined in the Strategy + Business article, of:
What is the total cost of the location, including the costs of land, office equipment, communications, wages, training, taxes, infrastructure, and wages. etc.
What is the current availability of talent in the region and the expected availability in years to come? etc.
What percentage of the talent has the specific engineering skills that the company needs (and/or can be easily trained to acquire those skills) and how easy will it be to find the talent to build and maintain the appropriate operational environments? etc.
What will be the ability to seamlessly share information between the site and headquarters without cultural, language, or distance obstacles? etc.
What is the ability of the location to attract talent that will fit in with the company culture? etc.
And the two additional Cs identified by myself and Dick Locke of:
How many similar companies are setting up in the region? etc.
What is the marketing impact of the location? Are you going to participate in the local economy? etc.
I now believe the following two factors are equally important:
Is the core infrastructure sufficient for your operations? Chances are that you’re going to need a lot of power and water. Can the infrastructure handle it, or is it already at capacity? If the operation can’t go down, are redundant power, water, and/or communications feeds available? You can’t always wait for the infrastructure to catch up.
An extended site visit is absolutely essential before you make a long-term commitment to a new location. A 2-day fly-by to sign the papers and celebrate is not enough to make a selection. The location has to be surveyed, the talent pool has to be evaluated on the ground, and the local living conditions have to be experienced. Someone has to spend at least a few weeks, if not a few months, evaluating the ins and outs, ups and downs, and pros of cons of any location on the short list before a final decision is made. And unless this factor gets its own category, and weighting, it won’t be done and “gotchas” will go undetected.
Selecting the wrong site will cost you tens, if not hundreds, of millions, so take your time and use the 9 Cs to select the right one.