Business Process Outsourcing in India

The business procedure outsourcing industry in India has developed significantly and as its size builds so does its upper hand. Contrasted and 1996 when this Industry had begun advances into the United States with Outbound Tele-showcasing efforts, today the vehicle for these calls-the web has turned out to be less expensive and more dependable for the normal Indian business. Up until the mid-1990s, Indian organizations were enlisted generally to do dull work – composing monotonous code for programming projects et cetera. These occupations were disregarded by most data innovation (IT) experts in the US, since the pay rates were low and the workplaces were frequently salaried perspiration shops. At that point, in the late-1990s there was the dread that except if more seasoned PC frameworks were fixed up or updated, they would crash and disabled person tasks when the date changed to the year 2000 (the Y2K issue). The product patches said to be important for taking care of the Y2K issue additionally for the most part included dull work that supported interest for Indian IT administrations. The development of fast media transmission connects amongst India and the US, the development of web based interchanges and the declining expenses of PCs and correspondences additionally limitlessly helped the outsourcing pattern. The falling expenses and higher unwavering quality of more up to date correspondence frameworks were particularly essential to the moving of less gifted and moderately bring down wage phone call benefit occupations from the US to India. Today the occupations moving from the US to India cover a scope of expert aptitudes, notwithstanding IT work and call focuses, including obligation gathering, value and bond examination, bookkeeping, recording salary charges, clinical medication research et cetera.

Why Outsource

Outsource- the benefits

• Accounting outsourcing produces cost investment funds between 30%-half for inland North American organizations. It would be ideal if you allude cost correlation examination for subtle elements
• Achieve adaptable staffing levels through accounting and bookkeeping outsourcing
• Outsource records to discharge time from exercises like records payables and receivables and concentrate more on basic bookkeeping exercises
• Outsource bookkeeping to accomplish better monetary control and enhance the importance, unwavering quality and nature of money related data
• Get access to most recent innovation, abilities, and bookkeeping and assessment programming's
• Eliminate the troubles identified with enrolling and holding headcount by outsourcing accounting and bookkeeping capacities
• Shorter venture conveyance times because of the procedure aptitude and productivity of the bookkeeping outsourcing specialist co-op
• Leverage the positive time contrast amongst India and US as India works when US dozes!

Why India

• Largest knowledgeable English-talking workforce after US
• India's extensive base of bookkeepers is a helpful resource in bookkeeping outsourcing process
• Access to conservative yet gifted work constrain per bookkeeper cost is around 1/eighth of that in USA and Canada, 1/sixth of that in Europe
• Favorable political and business condition for outsourcing – India is the most prestigious bookkeeping outsourcing goal on the planet
• Considerable mechanical and foundation updates as of late
• Faster web association helps in speedy passage of bookkeeping exchanges in outsourcing process
• Advantageous time zone distinction amongst US and India guarantees high efficiency and speedier Case study of organization

Client

Our client is a mid-sized accountancy firm based in Dallas, Texas. The Client provides accounting, payroll and individual and corporate tax return preparation services to a diverse mix of small-medium businesses. The outsourcing project at our firm started with 5 end-clients and was extended to 80 end-clients in five months. It covered accounting (monthly bookkeeping, year-end closing and write-up services) and payroll services.

Reasons for Outsourcing

• High costs associated with hiring and retaining qualified accountants and consultants
• Fixed investments in infrastructure and man-power was constraining investments in marketing and new business development
• Shortage of staff to manage year-end and tax-season peak loads
• High costs of setting up and maintaining the required infrastructure
• Inability to expand their high-end services like tax-consulting and financial planning due to existing services like bookkeeping and tax-return preparation
• To increase price and service(turn-around time) competitiveness against other CPA firms in the same area

Outsourcing Solution

Production and Quality

• Establishing the key deliverables for accounting and payroll services. Important parameters agreed upon were turn-around time and error rate in bookkeeping
• Non adherence to deliverables as stated in Service Level Agreements would lead to penalty and reduced billing to the outsourcing service provider
• All data was housed in dedicated US server at an international data centre to ensure online connectivity
• Setting up database for following up the progress on deliverables
• Formulating and implementing quality compliance systems
• Setting up a three tier review system to ensure timeliness and accuracy of output

Turnaround Time

• Establishment of turnaround times for all processes and sub processes. So turnaround time were established for accounts payable, receivable and reconciliation processes for the accounting work
• Service timings were changed to ensure two hour over-lap with US counterparts to resolve queries and data-related issues
• Reduction of turnaround time through innovative reporting

e.g. Use of a file tracker system with document identification numbers to clearly highlight missing data or documents. This reduced the time-spent on data-related queries/clarifications.

Responsive Administration

• Updating the Client Regional Account Managers on daily production status
• Communicating information requirements through missing information lists
• Pro-actively following up with the Account Managers and Client Operations Managers on status of information received and setting deadlines so that the client’s minimum production commitments are met
• Updating the online database for reporting status of ongoing projects/work

Process Innovations

• Customized checklists prepared to map the existing accounting practices of the client to ensure minimum start-up time for a new file
• Designing new procedures to reduce processing time and error correction time E.g.: Importing and exporting data between QuickBooks and MS excel
• Study, analyze and improve on the various client-reporting formats to reduce processing time and/or to improve quality of output. E.g.: designing and modification of various Key Performance Indicators (KPI) reports, excel schedules & word document reports.

Issues and Challenges

• Irregular flow of data through the month from clients end resulted in skewed work-loads. We handled it through two ways- maintaining a buffer staffing and breaking the process into sub-parts. So a sub-part such as accounts payables related work (regular and predictable expense transactions) was done earlier.
• Use of English- Standardized templates for raising queries meant that the communication skills of the operators was restricted to specifying the factual transaction details with relevant date and amounts. This similarity in transactions significantly reduces the scope for error due to miscommunication

Impact on Client

• • Significant Cost Reductions

The client has been able to reduce the over-head costs significantly to the extent of ~ 30% in the first four months

No downsizing of staff but they have been retrained to offer more profitable services

New clients addition rate increased by 10% in the last four months

• • Meeting client Deadlines

Consistently meeting 95-96% of the client deadlines–Accounting and 99.5% in payroll services

• Faster turnaround times Average turn-around time for write-up (a specialized accounting service) reduced from 3 days to 2 days.

Research objectives

• To identify reasons of outsourcing.
• To identify impact of outsourcing on turnaround times especially in bookkeeping outsourcing forms