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A potent combination of new technologies combined with rising costs in traditionally lower-cost locations and a move toward domestic protectionism has had a direct — and positive — impact on onshore sourcing. That’s the word from a recent Everest post.
Everest points out that traditional service models grew by only 0.1 percent last year, while IT and business process services that were rooted in digital offerings are growing at a rate of 18 percent a year.
This echoes a sentiment throughout the analyst community. Horses for Sources has written extensively on the need to tap into a global resource to achieve desired outcomes, and notes that with the rise of digital and as-a-service offerings services become location-neutral. Location becomes a side issue as factors like access to automation, process transformation and alignment with digital business models/outcomes move to the forefront.
As automation becomes the great equalizer, F&A onshore locations are appealing for several reasons. There are a few key reasons: Firstly, there’s a desire for closer proximity to facilitate real-time communication and management; secondly, as business process delivery maturity continues to grow, companies are sourcing more complex tasks and need skilled talent; and lastly, the much discussed new technologies that can drive down costs once gained through labor savings.
The Skill Factor
Talent can be a key consideration. Companies want to ensure that the F&A talent working on their account have the skills and understanding of their industry and organization. The F&A market is maturing and with that maturity comes a need for higher value work, from treasury services to forecasting, planning and analysis. Due to the sensitive nature of this work, as well as compliance issues, companies may want to keep these functions onshore.
In a report from May 2015, Everest reviewed domestic US-based delivery locations, and the south has a clear advantage. By shifting work away from a Tier 1 city, like New York, to a lower cost Tier 2 or Tier 3 city, companies can cut costs anywhere between 15% and 30%, while still drawing a highly skilled human resources.
Locations like our Deloitte-heritage F&A Controllership & Management Center in Tulsa, OK, are optimal for highly complex end-to-end F&A work. For example, our Tulsa location features a depth of talent, including CPAs, MBAs and Six Sigma experts amongst its staff members.
Located in the Central time makes it highly convenient for real-time communications from both the east and west coasts—and helps companies avoid extensive travel times (and costs) for site visits.
More importantly, our consistent delivery practices, policies and strong internal control structure gave clients the stringent, accurate financial, investor and tax reporting they are looking for.
To learn more about how Sutherland can help improve your F&A function, and to arrange an assessment of your current practices and processes with one of our finance experts, schedule an appointment today.