The advantages of offshore delivery centers


In times of crisis, leaders have the opportunity to explore new ways of thinking about their business. In the midst of the financial crisis, the Big Four companies outsourced routine, non-complex tasks to “delivery centers” in low-cost jurisdictions. The main objective was to improve the bottom line by reducing costs.

Over the past decade, as these types of delivery centers have grown and matured, the Big Four have recognized benefits that go beyond mere cost savings. As the world emerges from another crisis – the COVID-19 pandemic – delivery centers are an opportunity for accounting firms of all sizes to address a wide range of industry challenges and to capitalize on developments. macroeconomic trends.

Public health restrictions imposed on businesses and people around the world during the pandemic have changed the way remote working is viewed. Before the pandemic, accounting firms and their clients were reluctant to consider working remotely because it was seen as an inefficient, if not impossible, way to operate. With experience working from anywhere over the past couple of years, remote working is now widely accepted and seen as a viable way to conduct day-to-day operations.

The stigmata are now gone. LinkedIn found that 83% of people in the financial industry believe remote working and efficient operations go hand in hand. A CoSo Cloud A survey found that 77% of professionals report better productivity when working offsite. Accounting firms have made long-term commitments to their staff and clients to keep work done remotely – a major change in the industry. Remote work is no longer a concept of the future, it is an immediate and prospective reality.

The “Great Resignation” is a macroeconomic trend that has had a strong impact on the accounting sector (to say nothing of the economy as a whole). Achievers found that more than half of employees plan to seek new employment opportunities after the pandemic (significantly higher than the pre-pandemic rate of less than 20% reported by the Society for Human Resources Management ). This, along with an increase in demand for accountancy firm services and the requirement for professionals to perform this work, has created an extremely competitive environment for US accounting firms of all sizes looking for staff.

Access to talent is a huge challenge for companies of all sizes. This challenge can be mitigated by adopting a delivery center model that uses qualified and experienced accountants from non-US markets where the human resource pool is much larger and less competitive.

The advantages of a delivery center

Delivery centers are typically located in low-cost jurisdictions where there is an abundance of well-trained English speaking accountants and paraprofessionals. Initially, companies establish delivery centers to take advantage of the low cost of labor, real estate and other infrastructure, thereby improving the bottom line by reducing costs.

As a delivery center matures, the model offers more benefits than just cost savings. Innovative companies tap into a stream of benefits, including:

  • Access staff who can be available 24 hours a day.
  • Improving the quality of work through standardization, centralization and specialization.
  • Positive impact on morale and retention of home office staff, who are released to perform higher level activities.
  • Centralization allows for a smooth deployment of training and technologies.
  • Increased customer satisfaction beyond the simple cost dimension, as documents prepared by the customer can be reviewed in near real time

In my experience, innovative accounting firms that adopt a delivery center model create a distinct competitive advantage.
How are the delivery centers organized

Delivery centers are generally structured to do the job in two ways: by team extension or with specialized teams.

With team expansion, the delivery center team does the work on engagement like other team members would in the traditional way, only from one remote location and often from another time of the day.

Customers are now accustomed to providing supporting documents electronically, and technology portals allow this information to be transferred to engagement team members in remote locations seamlessly. Video conferencing allows team members to communicate with team members overseas ensuring that information is shared and that coaching and mentoring takes place.

One myth that needs to be debunked is the idea that team extension can’t be used by small businesses. Even individual practitioners without onshore staff can use this model with one or more offshore team members. Company size no longer determines the success of implementing a delivery center model.

Specialized teams are changing the traditional way commitments are executed. In this model, the delivery center team members specialize in conducting one or more procedures. They perform these procedures every day for several missions. By centralizing the execution of specialized tasks in a delivery center, companies realize efficiency gains.

In large firms, it is common for a team to consist of around 10 people focusing, for example, on carrying out the treasury portion of an audit engagement. The composition of the team includes three accountants who have their accounting designation and seven paraprofessional accountants.

Think again if you think this model is only for large companies. Smaller delivery centers can also be designed to use specialization. Instead of having teams of 10 members, there may be individuals or smaller teams focused on specific procedures that are overseen by professionally appointed accountants. Small businesses can also partner with other small businesses and create specialized teams that they both share, making this partnership delivery model accessible to all sizes of businesses.

Delivery centers are an important opportunity that accounting firms of all sizes should assess to take advantage of the shift in attitude towards remote working and address the challenges facing the profession – access to staff, quality of audit, business transformation, etc. In the field of the smartest and most innovative companies, five years from now, delivery centers will be the norm.

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