Latest details on how the strategic application of USA based outsourcing boosts productivity, while cutting both costs and risk.
By now, most business leaders have learned what is working when staff work from home and see what is not going so well. Regardless if your staff are in the same city or spread around the world there are some painful truths that we have measured and we are sharing with you. Our hope is that this will help adjust your business to meet the current reality.
While the data is still rolling in, ZDNet has reported the average productivity loss was 1% back in March 2020. This struck us to be a massive under count, so we kept looking and counting, because we mostly do business with accountants and the numbers matter.
Our findings from another news story in May of 2020 is that 30% of people working from home admit to being less productive. So, if 30% of people are less productive then that prior 1% number from the other study looks far too low.
We have more granular findings:
Every week we hear every week about “Pockets of Pain” where hundreds of people are 100% unproductive based on only a few financial systems staff not being available to work. The other problem we are encountering is that too often, the offshore consultant assigned from a service provider just disappears. Though attempts were made to assign a new offshore consultant, the process was very painful as service providers take far too long a time to onboard new staff and, in the meantime, they not live up to the service level agreement.
Our business focus is on maintaining financial, operational and data base systems at the user level, where it is very public and impacts many areas of the enterprise especially important corporate users.
When the USA based finance, sales ops. supply chain, HR, payroll corporate staff and other leaders do not have access to the systems they need; they are much more than unproductive, they are not able to work at all nor make time sensitive decisions that often have multimillion dollar implications.
These people cannot jump on a Zoom meeting to share systems access, their jobs just do not work that way, so they cannot get their work done and this cause both stress and expensive downstream operational problems. This also impacts global corporate reporting that can then impact valuations if made public and cascades from there.
Important business decisions are made based on timely data and reporting, without that company’s hemorrhage cash and reputations suffer.
Our own four major findings from our client base are as follows:
1. From a disaster recovery standpoint critical financial systems staff do not all disappear at the same time, yet this creates chaos!
So, while most have heard about the hybrid teaching model, and quarantines. We have first-hand knowledge of a more disruptive set of facts. Specific school buildings that house separate groups of children like grammar, middle and high school have been closed with a few hours’ notice to parents. So, in a single district, some schools are open, and some schools are closed. This makes it impossible to layer that variable into your employee’s day care needs and it is a random painful crisis happening around N. America. The stress level this puts on your staff is profound.
2. The other complication is work environments. Not everybody has a private workspace, nor good internet connectivity. Your more junior financial analysts and IT staff often fall into this category and they are impacted. This is felt by the large company teams they support almost instantly. So, unless your company can buy everybody a big house with a quiet office, this will continue.
3. A USA based FINRA certified remote systems team cost less than offshore options when you do the real math. USA based financial & operational staff get resolutions to problems 4X faster than offshore teams. So, a $40 dollar per hour offshore resource really cost your company $368 dollars to fix a problem that the USA based crew would have done in one hour. This is because your internal professionals are on hold cannot work for the four hours it takes the offshore crew to solve a problem. (Assumes a USA professional cost at $52/hr.) Offshore firms hope you are blinded by what appears to be a low rate, but is not, they just bill lots of hours based on their low skill level and hope you do not realize the cost does not include your corporate staffs waiting time.
4. A USA based FINRA certified remote crew costs 40% less than hiring a USA based full-time equivalent employee because the economies of scale tied to efficient utilization and cross training. Even the largest corporations cannot create the staffing balance to do this as systems support is a task and not their core business. Companies that attempt to provide internal support not only fail on the cost of delivery, they usually cannot afford both the quality of staff needed, nor the experts to cover all the systems they have.
5. The use of BOT’s and robotic process automation pushes costs even lower and no human can work faster or at a lower price point as software. We employ robotic software for our clients, and this cuts costs and timelines while increasing the availability of corporate staff to provide analytics on demand.
So, in our view, the pandemic has revealed not only operational threats, but opportunities for cost reduction and operational risk mediation.
This pandemic will be going on for a long time, and unfortunately so will other natural disasters. Trying to cover this with disaster recovery insurance will be too costly and will soon be an excluded claim.
Better to adapt the way work gets done so that important operational workflows can be maintained, and costs reduced.
If I can be a resource to you or help you make decisions, do not hesitate to contact me. firstname.lastname@example.org 609 750 8887
About Jim Burke
Financial Systems Automation and Back Office / Operational Cost Containment Leader, leveraging software tools and best practices to drive margin improvement for clients that do not have money nor time to waste.
Office 609 750 8887
Sources for this paper:
- Our own teammates.