I’ve touched on offshoring in a couple of my previous articles, and it seems to have gotten some attention. While offshoring is prevalent in top firms it's not standard practice in the rest of the profession, it has certainly been gaining momentum. I fully expect this trend to continue, and here’s why:
Barriers to offshoring are falling:
- Technology — Twenty years ago a firm shelled out for expensive software and server infrastructure in order to offshore processes. Cloud technology abolishes many of these barriers and streamlined the whole process. We’re no longer scanning in workpaper files, we’re reviewing them online with evidence pinned to the file.
- HR –Twenty years ago a firm needed people on the ground to source and train staff while navigating their way through local industrial relations law. Nowadays, a number of agencies have emerged in locations such as India, Vietnam and Philippines. These agencies provide recruitment, training and payroll services for an offshore workforce.
- Facilities — Signing up for a five year lease in a foreign country was a huge risk for many small firms. The aforementioned agencies now provide “seat leasing” solutions renting desks rather than whole offices. This enables smaller firms to scale up offshore operations without committing to a large fixed cost.
Despite these barriers falling, there are still a few things impeding the mass adoption of offshoring in the accounting profession.
- Cultural — The most obvious barrier to offshoring is cross cultural dynamics. Each culture has its own nuances which can lead to miscommunication and frustration on both parts.
- Regulatory — While regulatory bodies have provided some guidance to firms, the regulatory environment remains uncertain and it’s enough to keep more conservative firms onshore. One leak of a firm’s client list (including social security numbers) is all it will take for regulators to reign in all offshore operations.
- Security — With that doomsday scenario in mind, security is the elephant in the room! The combination of cloud technology paired with foreign staff who may not have direct oversight from the head office should be cause for concern for all firms. Adequate security and control measures need to be installed, and I suspect that firms will need to invest quite heavily in this area in the future.
So is your job going to be offshored? Probably, if it’s not automated first. The real question is, “When?” I have no idea.
