“There’s this perception of ‘why would you outsource? It’s never going to go well”, says Alastair Barlow, founding partner at London-based flinder, adding “I hear people who I really respect who are running great firms and they will say ‘oh, outsourcing, we’d never do that – never, never do outsourcing’.”
This captures, in a nutshell, some of the classic reasons accountants give for resisting outsourcing and offshoring, which often revolve around an outdated perception of the practice as being a bit of a blunt instrument to drive short-term profit at the expense of everything else.
“I think outsourcing and offshoring have moved on significantly from 20 years ago when banks would do it and you would call up and it would be a terrible experience,” says Alastair.
However, Alastair’s firm, flinder, which he founded with Luke Streeter, when the duo left senior positions in PwC to set up their own firm, is a case in point of the wider benefits that outsourcing can deliver when used strategically.
“The first question I always ask if we are doing an activity is, ‘can we automate it?’. If the answer is ‘yes’, then great, let’s automate it.
“If it can’t be automated, then the next question is ‘does it have to be done face-to-face?’. If it doesn’t have to be done face-to-face, then it can lend itself to being offshored.”
He adds that the benefits of outsourcing are wide-ranging and include a longer day with more hours working on a client, solving some of the challenges around recruitment and labour rate advantages.
While some firms have tended reflexively to have sought software-based solutions to drive up profitability, Alastair and flinder have taken a much more nuanced viewpoint.
“We are never going to be able to automate everything, we are never going to be able to offshore everything, but there is a load of things you can’t automate, despite what the app providers would have you believe.
“However, there are many things that you can move offshore with an outsourced provider or an offshore provider.
“It’s about evaluating end-to-end processes and understanding what’s valuable to your client.”
It is this approach that led to flinder building outsourcing into its growth strategy from the outset, beginning with an RFP process to identify the most suitable provider for the firm.
Alastair says: “Our plans were always to grow the business. Absolute, massive growth has always been what we are looking for and what we are trying to achieve.
“We wanted to know whether a partner could grow with us and support us on this journey to the huge lofty ambitions we have as a business and who we were getting into bed with.
“There was a bit in our RFP around due diligence and there was a bit around comparing those in the marketplace.
“It was about who can support us strategically with the ambitions we have as a business.”
Choosing the right outsourcing provider was critically important to flinder and the firm was looking for a partner that would fit well with what it wanted to do.
“At flinder, we offer a premium service to our clients. We have relatively high annual recurring revenue per client and we wouldn’t be able to do that if we didn’t have a premium service to support in all areas.
“My advice would be that it works if you plan it, have the right partner and you spend the time working with the team to get them up-to-speed and to bring them into your business,” adds Alastair.
flinder’s chosen provider was GI Outsourcing. The relationship started around two years ago with stats and tax work being outsourced on a pay-as-you-go basis.
The firm moved quickly to use GI Outsourcing’s dedicated resource model, which sees a firm assigned a specific member of GI’s team to support their work.
flinder now has four full-time team members working through GI Outsourcing, with further additions under active consideration for 2021.
“It was very quick that we accelerated up the use curve with GI Outsourcing. We very quickly went from trialing GI Outsourcing to pushing a couple of accounts and Corporation Tax pieces of work over.
“We were then at a level of trust where we could hire a full-time person through GI Outsourcing and use them as a dedicated person for our business.
“It was a natural extension and it was always going to happen if the relationship worked. We had massive demand for it and, at the same time, it is hard to recruit in the UK as quickly as we needed to.
“This is a testament to how the relationship works so well.”
Significantly, Alastair estimates that the cost of an offshore senior associate working through GI Outsourcing is just 50 per cent of the cost of a senior associated employed by flinder in the UK.
Now, flinder has a balance between its resources in London and its GI Outsourcing resources, based in India, which Alastair says work very well together.
He says that there are several points firms need to take into account in looking to make the best use of an outsourced or offshore provider.
“The key ingredient is not to look at them as a different party. It is to treat them as part of the team – an extension of the team, just sitting in a different location.
“For us, if it was going to work properly, we knew we had to indoctrinate them into the values of our business and get them in our all-hands meetings.
“It’s not a ‘them and us’ relationship, it’s more of a ‘we are one team’ relationship.”
He adds: “Our team in India will join our calls at the beginning of the week on any matters we want to share with the wider team, our strategy sessions every quarter so they can understand where we are up to as a business against strategy.
“We get them involved in team culture and workshops and they’re on all our Slack channels.
“The key is to embed them in your business as if they were another employee. It’s really important to embed them in everything as if they were one of your team.”
Alastair’s view is that work cannot simply be thrown across the fence with the expectation that it will get done when outsourcing.
“If you were going to give work to someone in the UK, someone on your team, you would coach them on it, you would ask them questions and coach them on how to do it, you would check-in on them and you would ask them if they have any questions.
“Working with outsourced team members is no different for us, it’s about coaching them as if they were any other member of the team.
“That is the key to making outsourcing a success and GI Outsourcing is now an integral part of our strategy.”
To find out more about how GI Outsourcing can support your firm, please contact us today.