Offshoring is an exact science. We need to follow the discipline for it to be successful. We need to standardize the processes, define rules around the processing, have clear service level agreements and decide how will you monitor the success of the process and consequently the outsourcing relationship.

One common misconception is that outsourcing means their control will go and everything will move out. You cannot offshore 100% of the work. The control, policies, procedures and coordination at the front end needs to be well defined by the Controllership. The offshore vendor is only an upholder of your policies.

Activities are not meant to be and should not be transitioned to offshore locations. Activities need to be defined, rule based processes with clear exceptions which follow a particular cause and effect pattern. Outsourcing is not a magic wand, you cannot transfer your pain. The processes at the front end need to be fixed first. We cannot have back end solutions for front end problems. The house needs to be put in order first; processes need to be standardized first before they can be shifted.


October 21 2015

“Lifting and shifting broken activities to offshore locations is like throwing garbage across your wall only to make your house unlivable in some time. Out of sight does not mean out of mind.

Accounts payable is normally the first victim of offshoring so let’s take its example. Treating each invoice or transaction in ad hoc manner based on the flavor of the day with no defined yardstick to measure performance is activity. Often companies decide to transfer processes premature just to relieve them of their headache and then when it does not work offshoring is blamed. Do not give offshoring a bad name.