Offshoring more strategic than cost-cutting alone: Sundaram

Most companies using business process outsourcing (BPO) are motivated by the opportunities to expand their client offering and not simply cost-cutting, according to India-based Sundaram Business Services. 

In a white paper published on Sundaram’s website, the outsourcing company, reported that an independent survey of directors of companies using BPO services ranked access to scale and faster processing, as having a higher impact on their businesses than lower cost. 

Global Head of Business Development at Sundaram Business Services, Harish Rao, said the perception that offshoring roles was a tool for cost savings for accountancy firms was a “misconception”. 

“More professional services firms see BPO as a multi-dimensional business asset and are using it strategically to help drive growth,” he said. 

“The idea of BPO as merely a cost-cutting mechanism is fast becoming out-dated.” 

Data from the company’s whitepaper cited Accenture’s 2012 Research Report Achieving high performance in BPO, which suggested that high performing businesses tended to be less motivated by cost when considering BPO.  

The Accenture report found that two-thirds of high-performance businesses focused on the potential value of business benefits beyond cost alone, when considering adopting BPO.  

“Pick up a newspaper or business magazine and the concept of BPO, offshoring or outsourcing is overwhelmingly described as a strategy geared towards cost cutting,” the company said. “But in professional services the reality is often different, and BPO has more strategic aims.  

“Professional services firms have other motivations beyond cost for engaging BPO, such as managing a seasonal or fluctuating workload, accessing the security and efficiency benefits of scale and accessing a ready available pool of talent. 

“The ability to offshore accounting tasks, while re-orienting staff toward higher value goals aimed at increasing revenues, is where BPO is most powerful. 

“This has overwhelmingly been the case in Sundaram Business Services’ experience of SMSF processing, where more accountants and superannuation administrators are outsourcing processing work in order to concentrate on their core business.”