Why offshore or outsource?

Offshoring or outsourcing your work offers you tremendous benefits. Scalability & flexibility in your operations, access to talent pools, reduced costs for you as well as your clients – these are some of the key benefits of offshoring or outsourcing some of your work.

Large global organizations, including leading professional services firms, have established significant dedicated offshore capabilities, by either setting up captive centers owned and operated by them, or procuring services from outsourced vendors.

There is nothing to hold back small and medium-sized professional services firms from leveraging offshoring or outsourcing to drive similar benefits. Size is not a pre-requisite for realizing the benefits referred above.

As a professional services firm, your unique selling proposition is your technical expertise in chosen domains, in areas such as Generally Accepted Accounting Principles (GAAP), auditing standards, tax laws, management consulting or regulations. Any client assignment that you take up has several activities that are suitable to delegation by you – typically routine or repetitive activities. As a Partner/ Principal with domain expertise, you may want to focus your attention and invest your effort in activities which demand your expertise and add value to your clients, while other activities may be delegated to your team. In that sense, you try and match your team’s skills with the skills demanded by such delegat-able activities.

Consider the following illustration of a financial statement audit assignment for one of your clients. An analysis of activities on that project reveals the skills needed to complete each activity and your typical team-level who has the ability to perform each activity:
Sr. No. Activity Skill needed Typical team level
1 Defining the project plan Project Management Manager along with Partner/ Principal
2 Scoping the audit Advanced-level domain knowledge Manager
3 Understanding client’s processes and accounting systems Median-level domain knowledge Senior
4 Defining the audit program Advanced-level domain knowledge Manager
5 Performing audit procedures as per defined audit program Basic-level domain knowledge Entry-level
6 Supervise team’s activities and review their work Median & advanced-level domain knowledge Senior & Manager
7 Conclude and report Domain expertise Manager along with Partner/ Principal
8 Project progress tracking, issue escalation & updates to client Project Management Entry-level for data collation & tracking
Manager for review, client updates, escalation or course correction
The above illustration reveals the importance of matching each task with the appropriate skill to drive efficiency and optimise your costs of delivering the project. Any mis-match leads to sub-optimal utilisation of skills and loss of potential revenue. For e.g., deploying a Senior to perform audit procedures will lead to a sub-optimal utilisation of your Senior’s skill and a higher project cost – as the per hour cost of a Senior is likely to be higher than that of an Entry-level team member.
Ideally, activities such as performing audit procedures, routine tasks such as collating project status and preparing progress reports, (basic & routine tasks usually constitute a significant proportion of the project time budget) if delegated to an offshore team, will offer you a significant incremental value, as the per hour cost of an offshore team member offers potential savings of more than 50% in comparison to an onshore team member.
team-transparent

Why offshore or outsource to India?

India is one of the top major global outsourcing destinations. With a large English-speaking young population, skills are available in plenty. Further, India offers significant cost savings to outsourcers from around the world, primarily due to a lower cost of living.

Currently, there are more than 1000 global corporations who have setup their large offshore centers in India. These are referred to as ‘Global In-house Centers’ (GIC), or ‘Global Capability Centers’ (GCC). Each such center employs thousands of employees to support global corporations with services such as transaction processing, end-user support, back-office support, information technology support, etc.

Leading professional services firms, including CPA, CA and legal firms are sending work to India and some of these have also setup their own legal establishments in India.

Bangalore, Chennai, Delhi, Mumbai are major outsourcing city-hubs. Cities such as Kolkata, Hyderabad, Pune, Kochi, Mysore, Chandigarh, Coimbatore, Ahmedabad have also emerged in the past few years as alternate outsourcing locations.

Quality of work and a huge cost saving potential are the major advantages available in outsourcing work to India.