Top 5 things to plan for when outsourcing

If 2017 is the year you want to explore outsourcing some of your practice’s routine accounting work, here are five top tips to help you navigate the process and achieve a successful outcome:

• Plan

This is the single most important aspect in achieving a good outsourcing solution. It might sound clichéd, but outsourcing really is a journey, not a destination. Remember that outsourcing is an operational response to a strategic issue, so be clear on what you want to achieve from outsourcing strategically and identify why it’s important for you and your firm. When you have this clarity, you will make more informed decisions and be more committed to achieving the outcome. And when the going gets tough (and it will at times), you will know that you are focused on your destination and you will find ways to find solutions, rather than get bogged down in the problems. As with implementing any new operational process or system, plan on it taking six to 12 months to bed down. If you find things are going well, you can always adjust and speed things up, and see those benefits come in earlier than anticipated – everyone loves a revised forecast in the positive.

• Be prepared

Not being prepared for errors is the second most common reason for failure. Despite whatever you have read or been told, do not fall into the assumptions and expectations trap or be lured into a false sense of confidence. The biggest of these assumptions are –don’t assume the outsource team will get it right first time or that what you’ve provided in terms of instruction is sufficient. There are ways to mitigate this risk, but go in with this assumption and you will ask different questions, you will actively participate in the process, and you will implement higher levels of checks and quality assurance than you normally would.

Another fatal error is expecting that ‘they should know’, referring to technical knowledge or application of it. Always test and measure for yourself. Quite often, it isn’t the case that the people doing the work can’t or won’t be able to do the work. There are often issues of distance, language and cultural differences. For instance, in Australia, accounting professionals work in fairly flat organisation structures where they are naturally expected to problem-solve, think laterally and get the job done. In other countries such as India, the typical pyramid hierarchical structure is the norm, a reflection of both cultural issues and the enormous size of the population.

• Mitigate risk

Start small and start slow. Outsourcing can offer very attractive financial benefits but don’t let this distract you from doing the work to acquire them. Start with a reputable supplier or trial three with an initial job for a short period and see who performs best.   One job is not sufficient. You want to establish who you will be able to rely on over a longer period, and this will require assessment of a variety of factors from technical competence, price, communication and problem solving.

Focus on outsourcing one task or job, then systemising this and only when this is successfully running as you want, replicate the process across other tasks. The initial job will provide you with invaluable learnings about both the team you are working with and your own internal process that needs to be followed for the best outcome to be achieved. That will speed up implementing subsequent processes later on.

• Invest

As you’ve probably gathered, outsourcing takes an upfront investment of time and resource to get right. Think of this as an asset that will pay a return over time. Go so far as to calculate your desired savings or revenue increase over time, offset by the investment of time, and you should be looking at a healthy, but not ridiculous, ROI.

If you are the principal or partner leading the outsourcing project, you will also need to carve out time to oversee the process. Set up a project team, hold regular meetings and show that you are committed to the project being successful.

Identify an appropriate staff member who will be able manage both the process and the people. Choose someone with great client relationship management skills who can empathise, that your new virtual team comes with language and cultural differences that requires patience and persistence, over a technically better person.

At some point, you will require a level of independence where the work happens without a significant chunk of internal resource time, so know your limits and when it is time to cut ties for non-performance. Even a bad experience gives you knowledge you didn’t know before and an opportunity to improve things next time around.

• Communicate

Lastly, communicate, communicate, communicate. Don’t start the project without clearly communicating your rationale to your existing staff and getting their buy-in. The most common unspoken (and sometimes spoken) fear that arises with staff when the word ‘outsourcing’ is mentioned is fear that they are going to lose their jobs. Get the buy-in of your staff and have a plan for what they will do if part of their work is going to be outsourced.

When dealing with your outsource team, it can be easy to gloss over the things they are doing well with the expectation that those things should happen as a matter of course.  Provide positive feedback and build on that. While you are still moving towards the desired outcome, don’t shy away from being persistent in going for the standard of output you require. Take it step-by-step and you will get to the end and realise it is achievable.

Robin Carter, CEO, Add Capacity