By Laurence Whittam
In today's accounting industry, the shift toward offshoring is not merely a trend but a strategic requirement for firms to meet staffing requirements while also optimizing processes and exploring automation. However, this transformative journey is laced with complexities that demand planning, cultural sensitivity, and a structured approach to integration.
The experience of a mid-size CPA firm, grappling with the initial stumbling blocks of offshoring, sheds light on the importance of strategic direction and serves as an educational blueprint for firms navigating similar waters.
Embarking on the offshoring voyage
With an ambitious vision, the firm, led by five partners and supported by a robust team of 40, ventured into the offshoring arena. Their objective was clear: With their current traditional recruitment cycle not resulting in candidates, they had to find an alternative pool of talent to ensure they could sustain their fast growth. Yet, the reality of integrating an offshore team presented unforeseen challenges.
Within a year, they built a team of five with a team leader, one senior accountant, and three juniors. Productivity lagged significantly, with the offshore team operating at 40% efficiency compared to their U.S. counterparts, and a staggering 60% of tasks were missing their deadlines. This caused a large strain on senior employees and began to sow seeds of doubt and frustration among the firm's partners and team, questioning the viability of the offshoring endeavor.
Navigating through strategic waters
The turning point came when the firm engaged Impact Global Solutions to perform a comprehensive assessment and unearth the root causes of these challenges. Like many firms, offshoring was very new, so it was difficult for them to understand the problems’ root cause. The findings revealed a critical lag in system connectivity and a disjointed communication channel that delayed real-time collaboration and efficiency.
Here’s how the team fixed it.
Technological revitalization and process enhancement
The solution strategy was twofold. First, addressing the connectivity bottleneck transformed the operational landscape, boosting productivity by 15% almost immediately. This was achieved by streamlining system access through a secure, direct link, eliminating the cumbersome lag that plagued the team's workflow. Concurrently, the shift from email to MS Teams for communication, coupled with the introduction of daily check-ins, fostered a culture of prompt problem-solving and agile project management.
Redefining project management and deadlines
A pivotal insight was the misalignment of project deadlines and scopes. By strategically realigning expectations and introducing buffer periods, the firm significantly mitigated the risk of overdue projects. This proactive approach, augmented by targeted training sessions for the offshore team, addressed skill gaps and clarified project requirements, ensuring a smoother delivery process.
Cultural integration: Fostering mutual respect and understanding
Perhaps the most transformative aspect of the firm's offshoring strategy was the emphasis on cultural integration. An open forum for airing grievances and frustrations paved the way for a renewed sense of partnership. Leadership's proactive steps towards understanding and integrating with the offshore team's culture underscored a commitment to a cohesive, unified workforce. One-to-one “get to know” meetings were implemented where no work was discussed and employees could purely focus on building relationships.
Key areas for immediate impact
As firms embark on or refine their offshoring strategies, three critical areas emerge as immediate catalysts for success:
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Outsourcing readiness assessment: The cornerstone of a successful offshoring venture lies in a thorough evaluation. Firms must scrutinize their current processes, delineate clear Standard Operating Procedures (SOPs), and identify internal champions to spearhead the offshoring initiative. Investing in comprehensive training and setting explicit goals, metrics and targets are pivotal steps in ensuring a seamless transition and alignment with the overarching objectives of offshoring.
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Treating the offshore team as internal members: The integration of offshore teams transcends mere operational alignment; it requires the cultivation of a shared culture. Daily huddles, transparent communication channels, and initiatives to understand and embrace the offshore team's culture are instrumental in building a cohesive, unified workforce. This approach not only enhances operational efficiency but also nurtures a sense of belonging and mutual respect among all team members.
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Process optimization and delegation: A critical assessment of internal processes can unveil opportunities for optimization and clearer delineation of tasks. By dissecting existing workflows, firms can identify activities best suited for the offshore team, ensuring that the delegation of tasks maximizes efficiency and aligns with the strengths of both the in-house and offshore teams. This strategic internal assessment fosters greater visibility and control over the end-to-end process, paving the way for a more effective and streamlined operational model.
In conclusion, the journey toward effective offshoring is a multifaceted endeavor that demands strategic insight, cultural empathy, and a commitment to continuous improvement.
Reprinted with permission from the Virginia Society of CPAs. Laurence Wittam, the founder and managing director of Impact Global Solutions, is a leading advisor in the offshoring/outsourcing arena. He specializes in empowering accounting firms and finance teams to maximize their potential through effective utilization of offshore talent.