Accounting outsourcing in India is now beginning to attract a number of firms not only in the US but in Europe as well.   This is a welcome development to the Indian government. Outsourcing in India of this kind of work are most welcome to boost their country employment efforts. There are many Certified Public Accountants or CPAs in India who are now employed because of accounting outsourcing.

This outsourcing of accounting to India is most beneficial to firms in the US because of time differential.  Night time in the US is day time in India.  Thus, if parts of an accounting project are outsourced to India, the continuity of accounting work is maintained night and day, resulting to a faster turn around time for project completion.

Many firms who are outsourcing accounting services to India save 30 to 50% in terms of salaries and wages expenses because of the low cost of labor in India.  Aside from this, the fact that Indians speak fluent English, the firms outsourcing accounting to India can communicate easily with their Indian counterparts to discuss differing aspects related to their project.  The political environment of India augurs well with outsourcing.

Talented economist and accounting professionals abounds in India. Because of outsourcing, their talents are now harnessed to assist in the preparation of various accounting works.

Peak season tax preparations are now outsourced to Indian accounting professionals.  This will unclog the tables of US accounting firms and will enable them to concentrate more on high-end accounting activities.  Firms who are saving on manpower cost are now outsourcing most of their accounting services to India. Even large corporations have their back offices not at their head office in the US but in India.  Simple accounting works like payroll, accounts receivable and payables and other general bookkeeping jobs are now outsourced to India.  This new procedure of outsourcing in India has made the processing effort for most companies easier and faster.

The success of accounting outsourcing in India is due to 3 basic reasons.  The first is government assistance.  The Indian government aggressively promotes their country as a haven for outsourcing.  Companies are encouraged to put up their branches to serve as their back office for their world wide operations. Tax holidays for several years are given to these companies including other benefits. The second reason is the low cost of labor in India.  Compared to other countries in Asia, India has one of the cheapest labors. And finally, the third reason will be their proficiency in their use of the English language.

Development of software is always a team effort and is best accomplished with the teams working close to each other. The discussions that take place amongst the teams in real time, moves the project forward to its implementation. However, the practice of relying on Agile offshore development has brought about a powerful marriage between the repeated rapid processes, and multiple offshore engineering teams, the combination of which is marked with improvement of market response, its trends, and customer requirements. In here, there are suggestions as to how you can manage this collaborative process across the length and breadth of 8,000 miles that separates the Scrum teams of the multiple shores.

Agile methodologies such as XP, Scrum and DSDM have been adapted by the extended teams of successful global organizations, thus improving their customer needs and time to market. In the process, the organizations gain faster experience of transfer, training, transition planning, goal setting, governance, including the method of reviews which are necessary to achieve results. Deployment of Agile development methodologies in multi offshore environment can be challenging, and research has shown that with the required modifications, the adaptation of the development process in multi-locations and time zones, offshore engineering has been able to deliver quality and productivity compared to the established Agile teams in the US, and that too in just three months. This achievement includes reduced calendar time in incorporating new features, feedback from the early stage of development, along with the ability to make critical course corrections.

Agile methodologies are a new process adapted in today’s software development processes and practices, which introduce the changes in requirements by delivering the software in small releases. This has kept high the customers’ confidence, who can now relate their business requirement changes much faster. Agile methodologies have introduced a new set of software development processes and practices, which provide requirements change through delivery of the software in multiple modular releases. This increases the confidence of the client and enables them to relate any of their requirements of business changes much faster. The global economic situation has changed software development strategies, and the larger IT organizations are changing over to offshore development at a much faster rate.

In an offshore development process it is not necessary for the offshore and onshore developers to be in constant touch and communicate regarding the progress of the development of the project, and its specific feature or function. To give you an example, it is a waste of time for the onshore and offshore developers to check the same codes in the same section of the code repository, and eventually affect the work by checking each other’s code. With the offshore team having competent self-sufficient business analysts, programmers, QA staff, and technical writers the work can be conducted indecently by them without the necessity of much communication between the offshore on onshore developers.

The important thing in any team work is the interpersonal relationships within that team. With the Scrum teams distributed throughout the US, and the offshore locations, there are few interpersonal working understandings between the teams with few or none live contacts between them. This can invariably affect the software development progress in the quality of its production, and there could be questionable deliverables. To solve this situation, basic team building exercises need to be taken up. In doing this, the offshore Scrum team could be sent to the US for few weeks, where they can observe the dynamics and other typical working characteristics of the US teams situated at different places, and this could help in building the much wanted working relationship between the Scrum teams. In practice, it is found that a US based engineer visiting India every two months, and inter-acting with the offshore team in India. There-after, a tram of Indian engineers is lead to visit the US every six months to interact with the team members in the US. This brings about an understanding between the two teams, in working relationship and from a cultural and morale-building perspective as well.

The turning point for many companies to start outsourcing their work was the current competitive trend of delivering professional world class quality, on time, work at cost effective prices. Many firms prefer to outsource their software projects offshore. There are many ideal benefits to suit your specific process-centric requirements.

True Benefits of outsourcing software development :

B2B & B2C’s growing momentum has quickened the pace for more powerful world class, streamlined comprehensive, off shore software outsourcing. Benefits of out sourcing software development:

• Customer-centric approach of delivery.
• World class professional skills and expertise to suit your process-centric requirements.
• Establishment of both or either a technical or call centre.
• Internet promotion and advertisement with SEO services at cost effective prices.
• Feature-rich one stop process-centric service centre.
• Variety of domains of highly skilled personnel with quicker time to market innovative techniques.
• Flexible websites with free periodical updates using only the latest technology.

Why India?

An annual Asia-Pacific survey of more than 500 companies, according to Hewitt Associates, reported that India had gains of 12.8% & 13.7% last year for positions labeled IT solutions provider & software development. It has also been proved that around 80% of the offshore outsourcing work is done in India.

Why do many of the American & UK companies come to India than its competitors China & Romania?

• India has a larger English speaking population.
• India also has a lot of historical ties to the western countries, which ensures better interactive and prompt technical delivery to suit your customer-centric needs.
• Labor costs are relatively lower.
• Due to the economic vitality, the standard as well as the cost of living was on the increase with the new offshore software outsourcing projects.
• It has also helped in the rapid creation of a technological market.
• The demand for more IT Professionals was meet in a streamlined approach.

India is currently considered the hub when it comes to offshore outsourcing in all the various spheres of a growing as well as a developed economy. Its feature-rich innovative techniques ensure credibility and a definite boost for their company profile in the market.

As the foremost “hot spot” for America’s offshoring and offshore outsourcing of technology and business services functions today, India presents an important case study of differences in business culture. In the course of years of giving seminars to both American and Indian teams working together, I have found recurring themes and incidents that point to underlying cross-cultural differences in mindset, values and approach to business interactions.

Once you get past the more obvious mutual adjustment issues of time zones, logistics, work and holiday schedules, accents, names and language (American vs. Indian English), there are five elements of American business culture that pose special challenges for Indian teams interacting with their American counterparts - whether in the ITO, BPO or call center environment.

1. Mindset about Management Hierarchy In American business culture, rank and title aren’t as important as they are in India. Hierarchical forms of behavior are frowned upon. The expectation is that subordinates will speak up, offer suggestions, push back and take initiative rather than just do what they’re told. Decisions tend to be less top-down, authority is more delegated, and managers expect team members to take responsibility and assume ownership of results.

2. Attitudes Towards Appointments and Deadlines For Americans, strict adherence to time commitments is seen as a basic principle of professionalism and courteous behavior. Because everything tends to be strictly scheduled, delays in one appointment or deadline can have a serious ripple effect on a colleague or customer’s other work commitments. The more flexible and open-ended approach to time of Indian business culture can create tensions and unfavorable impressions on American counterparts.

3. Meaning of Agreements and Commitments Americans have a preference for clear, detailed agreements and are uneasy with vague expressions of general commitment. In business interactions, commitments are taken literally and seriously. Failure to follow through on them precisely is viewed as a sign that a person isn’t trustworthy. Indian business culture tends to view agreements more flexibly as intentions and guidelines for future action.

4. Results vs. Process Orientation In Indian business culture, following the rules and implementing correct processes is highly valued, but in American business culture, it’s all about results. There is impatience with individuals who come across as more concerned with following established processes correctly than with achieving the desired goal. Americans don’t like to be told all the procedural reasons why something can’t be or hasn’t been done.

5. Directness — Especially in Addressing Disagreements The American style of communication is characteristically direct, candid and relatively unconcerned with face-saving or the avoidance of conflict. The expectation is that questions will get answered with a clear “yes” or “no,” and that disagreements will be dealt with openly and straightforwardly, in a “tell it like it is” manner. Indians and people from other cultures that tend to avoid conflict and loss of face often find it hard to say “no” or raise problematic issues effectively with their American counterparts.

Cultural awareness and the ability to adapt effectively to another culture’s way of doing things are complex skills - whether you’re a programmer in Bangalore or a project leader in Sunnyvale. Everyone tends to take their own cultural ways of doing things for granted and to assume they are self-evident to others.

In recent years, American companies offshoring or outsourcing to India have shown growing awareness of the hidden costs of cross-cultural mismatches in work-related behaviors. They have been willing to invest in general and region-specific cross-cultural training for their onshore employees and those who are asked to travel to India. They have also learned to devise process accommodations to circumvent the negative effects of certain cultural tendencies in their offshore teams.

What these companies seldom undertake to address directly is the need to seriously educate their offshore teams in the fundamentals of American business culture - the attitudes, thought patterns and behavior norms that Americans expect. They’re missing a golden opportunity to improve the productivity and experience of their onshore-offshore teams.

Dr. Karine Schomer is President of Change Management Consulting & Training, LLC, and leads the CMCT India Practice specializing in cross-cultural training and management consulting for doing business with India. For more learning resources check the CMCT Articles Archive.

About the Author

Karine Schomer of CMCT