Okay, so you’re running an accounting practice and you keep hearing about this offshoring or outsourcing thing. Apparently, there are an increasing number of professional services firms doing it.
You’ve probably read the recent AFR article on Deloitte USA’s big Indian play with ‘Deloitte US India.’ Many of Deloitte’s global offices are leveraging some of their 27,000 employees based in India to conduct a range of tasks, from professional services like administrative work on company audits, research for mergers and acquisitions through to conflict of interest checks and collections.
The opportunities are growing even more for Deloitte as well. Their offshore location has also allowed them to continue being innovative in areas such as data analytics and cyber security. The acceptance and growth of offshoring is not just limited to financial services; legal service providers, both mid and top tier, have also rapidly embraced offshoring as an enabler of growth and efficiency.
An article published by the Australasian Legal Practice Management Association (ALPMA) referenced recent findings from a CommBank Legal Market Pulse Survey. The survey results identified that over 40% of top-tier law firms have established back-office offshore teams. The survey findings also highlighted the growth of offshoring back-office functions within mid-tier firms over this same period.
Over 40% of top-tier law firms have established back-office offshore teams
This figure has gone from just 9% in the March 2015 survey to over 30% this year. In some cases, firms are even beginning to offshore front-office functions as well. Maybe you’re aware of these figures, but you’re still not really sure what it is or how it works.
The accountant in you is worried about the risks – “it might work for them but not my practice”.
Well, that simply isn’t the case anymore. Offshore employees are accessible to any business; no matter what the size or industry.
This series of posts should allay any fears and highlight that there are many benefits to offshoring, from a capacity, cost efficiency, and customer service perspective.Some of the key benefits that can be gained from an offshore approach were identified in the 2010 CPA Report, ‘Offshoring: Impact on the accounting profession‘.
- Access to new products and services (cyber security and data analytics for example)
- Solving domestic skills shortages
- Increased speed to market
- Improved service levels
- Cost savings
- Access to qualified personnel.
The opportunities to enhance capability, deliver enhanced service, expand services and also reduce expenditure on some roles by up to 70% can no longer be ignored.
The Rise of Virtual Assistants
Most recently, EY have begun testing the use of virtual assistants in their practice. Another recent AFR article highlighted that ‘rising costs and margin pressure from clients has forced professional services firms to reduce support staff in the local market’.
A four-month pilot program was recently completed with around 20 equity partners. With Australian-based executive assistants being paid between $50,000 – $95,000 and similarly skilled employees in the Philippines $5,000 to $20,000, the cost benefits are clearly evident. The pilot was ultimately successful and it looks to become a greater part of the firm’s overall strategy. One of the program’s Pilot Participants, Jon Pye, deputy managing partner of EY’s Asia Pacific assurance practice, said that the impact of his VA was minimal and that everything operationally “gets done.”
Better yet, junior employees will be able to access admin support services meaning they’ll be able to focus on value adding service to their clients, and ultimately, focus on more effective billing.
It’s also important to acknowledge that offshoring does not mean taking opportunities away from local employees.
It gives firms the ability to empower their local employees with more strategic and value adding work. By removing the procedural and labour intensive elements of their roles, you’re able to realise more of their capabilities and foster a culture of professional development.
The acceptance and growth of offshoring are not just limited to accounting services; legal service providers, both mid and top tier, have also embraced offshoring as an enabler of growth and efficiency.
In my next post, we’ll cover off the difference between outsourcing and offshoring. These are two vastly different options, each with their own pros and cons – getting this decision right can determine whether or not your global workforce is successful or not.
If you have any queries on how offshoring can work for your business, please get in touch with us to get started.