CFOs are restructuring finance departments in various ways, an effort that seems likely to continue even as the recession fades.
Alix Stuart, CFO Magazine
November 1, 2010
While consolidation may be very effective in reducing a company's accounting department (and increasing its bottom line) - it's not too bad of a hit knowing that some of what's being consolidated is to U.S. shared-services companies. I ask - why can't there be more shared-services companies here in the U.S. and shift more if it here, rather than abroad? We Americans have the advantage of not only speaking the language, but also understanding American culture and innuendo which has been overlooked. And when you say that salaries are 80% lower in India than in the U.S. - what are you comparing it to? N.Y. salaries pre-2008? Salaries have also come down substantially here. There are a lot of people who haven't worked in a while - who would work for (much) less than their previous salaries. Why don?t we give Americans a chance?
Posted by Helen Rosen | November 26, 2010 08:44 pm
Offshoring has exploded and that has lots to with technology and companies pushing for share-service departments, especially in low-cost producing countries. I do not see this changing any time soon. The Finance roles are changing from accounting to more analytical roles to support businesses. The world is forever changing and requires more data and analysis to support its operation. I left accounting/finance roles nearly 6 years ago for my solution type of work. I view this is area high growth and not with the mumdane day-to-day accounting. My only concern is with the education system being able to support the new model. I talked to my old College and they are still out in left field in terms of their program development.
Posted by Paul Young | November 23, 2010 07:57 am
Will foreign companies outsource/offshore to the U.S. because their talent is being hired full-time by American companies? Cost savings in the U.S. may not factor given the expense for late fees and penalties if outsourced/offshore work is processed untimely, then add restructuring, severance, and new hire costs. Ask if a division paid their rent with a purchase card or personal credit card and put it through T&E and then it is paid by AP, too. Is sending the GL offshore really a good idea...the basis of the financial statements? It's like posting your checkbook on an internet blog. I think the U.S. is being shortsighted. I enjoyed the article. Thank you.
Posted by Charlotte Braddy | November 19, 2010 01:35 pm
Although the majority of our clients are too small for off-shoring, we're still seeing a lot of outsourcing of accounting functions. Two reasons: Using outside expertise is less expensive, and higher quality, than developing similar resources in-house Outsourcing accounting functions removes uncertainty from the hiring-firing process. Compnaies don't have to ask, "Should I hire for this position? Will there be enough work to justify this hire next year?" Etc.
Posted by Marcelle Green | November 03, 2010 09:27 am
It is so very true that with the automation a lot could be done with lot lesser staff. Offshoring got factored into the business model simply because of the labor arbitrage, but this should not always be considered a cost saving to the organization. Automation and implementing newer technologies with re-engineered processes will result in greater savings to an organization than offshoring and having a heavier finance department
Posted by Mohammad Mashiatulla | November 03, 2010 12:16 am© CFO Publishing Corporation 2009. All rights reserved.