Any experience with outsourcing?


P

Paul Thomas, CPA

"The US of A is about to become a third world country"
Overheard by an Indian at the landing of the Pilgrims
 
V

vjp2.at

I musta read over a year ago the reason for accountantsinindia.com
isn't cost but that USA students would rather study finance these days..
and with a lot of new regs, the chap in India, is, well, more objective..

With XML and natural language processing, a lot of the
outsourceable work might end up being done by machine anyway.. Some
computerised call centers are now so good most folks don't know
they're not human..

And fundamentally, the developed world is headed for a major labor
shortage (post-boomer-retirement) that could lead to a repeat of the
Great Depression (fourthturning.com).. we need all the help we can get..

- = -
Vasos-Peter John Panagiotopoulos II, Columbia'81+, Bio$trategist
BachMozart ReaganQuayle EvrytanoKastorian
http://ourworld.compuserve.com/homepages/vjp2/vasos.htm
---{Nothing herein constitutes advice. Everything fully disclaimed.}---
[Guilty conscience produces extremism] [Urban sprawl confounds terror]
[Homeland Security means private firearms not lazy obstructive guards]
 
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G

Gregory L. Hansen

Some of the most intelligent and hardest working people I have met
have been Indians. In fact, of the hundreds of professional women I
have met, the two most intelligent have been Indians. With the
emphasis their nation is putting on a really good education and
offering offshore services to North America and Europe, I don't agree
with you. I would say you are in great peril.

BTW, no one has any viable valuation of their "face time" unless it is
evaluated by an outside expert. It is shocking how many businessmen,
not just accountants, hang on to their clients simply because the
clients are too lethargic to change. Within the next decade it will
be interesting to see how many of you peoples businesses survive when
they are up against highly aggressive sales force selling high quality
Indian accounting, tax, and consulting services. From what I have
seen, I am putting my dime on the Indians.
By the last numbers I'd seen, wage inflation in India is around 14%,
they're predicted to be the world's fourth largest economy by the year
2050, and they're already outsourcing some of their own work to China.
So what will be the cost advantage of sending work to India in the next
decade?
 
R

Ron Todd

On Sat, 21 Jan 2006 00:19:24 +0000 (UTC),
By the last numbers I'd seen, wage inflation in India is around 14%,
they're predicted to be the world's fourth largest economy by the year
2050, and they're already outsourcing some of their own work to China.
So what will be the cost advantage of sending work to India in the next
decade?
I would think that those who could for tell the future wouldn't have
to work for a living. :)
 
R

Ron Todd

If you are right, Ron, the trend would seem to be impossible to stop,
so....would I survive longer by outsourcing my bookkeepers today?


1. Things tend to go in cycles.

2. Until the cycle is finished you never now where you are in a cycle.

3. Because of the managerial control problems on both ends I could
never recommend outsourcing to anyone.

4. If you take the time to analyze what outsourcing really is, it can
only lead to the conclusion that it is mechanism of enterprise
suicide.

5. It is a pretty safe that people who are trying to sell you
something do not have your best interests uppermost in their thoughts.
 
R

Ron Todd

"The US of A is about to become a third world country"
Overheard by an Indian at the landing of the Pilgrims
Well...... The Indians (NA) did outsource their farming skills, food
gathering, game hunting skills, and other competencies to the
Pilgrims. I don't thing the analogy is too much of a stretch to
compare to USA outsourcing, off shoring, and our pernicious
interpretation of what "Free Trade" is (it is the most one sided
practice I have ever heard described as free outside of Pravda).
 
R

Ron Todd

.....

And fundamentally, the developed world is headed for a major labor
shortage (post-boomer-retirement) that could lead to a repeat of the
I have not seen the characteristics of an actual labor shortage. I
have seen the concept used as a sales tool to drive down the cost of
labor and as a self serving excuse for management failures.
Great Depression (fourthturning.com).. we need all the help we can get..
You won't get or find that cause and effect anywhere in history. The
Great Depression was triggered by American tariff practices and
spurred on by reckless speculation in the capital markets. The only
reason it lasted so long was the sheer incompetence of the Frank
Roosevelt and administration of idiots.

Accounting and Audit were very bad in those days and people were not
getting a clear picture of what the Federal Government was actually
doing. Today we have much more transparency, although we still have
the idiots.
 
J

Joe Canuck

Ron said:
On Sat, 21 Jan 2006 00:19:24 +0000 (UTC),



I would think that those who could for tell the future wouldn't have
to work for a living. :)
I've been telling the future since 2001. :-D
 
S

Stephanie Serba

My business *is* outsourcing. For companies that need to add to their staff
without committing to hiring a new employee. We offer IT, data/telecom, PC
support/repair, printer repairs, bookkeeping, accounting & training
services.

There's more to outsourcing than canning your employees and hiring a
contractor for 1/2 the money, or farming out your support centre to India,
which is the typical view of what outsourcing is.

Stephanie Wells, AICIA
Durham Business Outsource
Partner, Accounting & Technology
www.dbo.ca
 
S

Stephanie Serba

Carol said:
If you are right, Ron, the trend would seem to be impossible to stop,
so....would I survive longer by outsourcing my bookkeepers today?
Not necessarily. Are your bookkeepers on your payroll? Perhaps it might be
better for them, and you, if you were to offer them contract positions
instead. Offer your clients the opportunity to save themselves a bit of
money by hiring the bookkeepers on contract directly. Yes you may lose some
of the money you billed out from marking up their hours, but you may attract
more clients by putting them onto someone they can hire, on contract,
directly to the client. Providing of course they want to retain your
services for auditing & tax preparation.

Outsourcing is not necessarily a bad thing.

BTW, *if* you were to put your current people on contract, they may have to
be cautious about this move. In Ontario, if a person is on "contract" but
has only one customer they bill, they are still considered an "employee" and
the "employer" is still responsible for retaining and remitting payroll
taxes even though they are technically not an employee. There are
qualifications regarding employee-employer relationships that come into play
if you do not have more than one client....

Stephanie Wells, AICIA
Durham Business Outsource
Partner, Accounting & Technology
www.dbo.ca
 
S

Stephanie Serba

Are you inquiring about outsourcing the work out of your immediate area? I
wouldn't recommend it.

Stephanie
 
C

Carol

Thank you for your comments, Stephanie. I didn't respond before because
I was away from the office.
I hadn't been considering proposing passing my bookkeepers on my
clients. But I will. For me is keeping the Core: My Clients. Everything
else is seondary.
 
J

Joe Canuck

Stephanie said:
My business *is* outsourcing. For companies that need to add to their staff
without committing to hiring a new employee. We offer IT, data/telecom, PC
support/repair, printer repairs, bookkeeping, accounting & training
services.

There's more to outsourcing than canning your employees and hiring a
contractor for 1/2 the money, or farming out your support centre to India,
which is the typical view of what outsourcing is.
Typically the contractors cost twice as much, where the outsourcing
company costs half as much or less... as compared to employees.

Those employees affected by outsourcing all have the same view... they
lost their jobs due to it.
 
J

Joe Canuck

Stephanie said:
Not necessarily. Are your bookkeepers on your payroll? Perhaps it might be
better for them, and you, if you were to offer them contract positions
instead. Offer your clients the opportunity to save themselves a bit of
money by hiring the bookkeepers on contract directly. Yes you may lose some
....and there is nothing to stop the clients and bookkeepers from
removing the middleman and doing business with each other directly.
 
S

Stephanie Serba

Joe Canuck said:
...and there is nothing to stop the clients and bookkeepers from removing
the middleman and doing business with each other directly.
Unless this was a part of the "service" I offered as a bookkeeping service
or accountant (ie telling my client they can book and pay the bookkeeper
directly), I'd have those working on my clients files sign 1) a
confidentiality agreement and 2) a non competition agreement. As long as
they are working for me, and for a period of 1 year after they either
employed by me or performed contract work for me, they would not be able to
either take one of my clients with them, solicit one of my bookkeeping
clients or accept an offer of direct employment/contract work from the
client directly without my express consent.
 
S

Stephanie Serba

Joe Canuck said:
Typically the contractors cost twice as much, where the outsourcing
company costs half as much or less... as compared to employees.
Not necessarily. You pay the contractor for the actual time they work, and
not for warming a desk chair. You also don't pay a contractor for breaks,
lunch, vacation pay, stat holiday pay, employer expenses like Workers Comp,
unemployment, pension, group health and dental plans, training and any other
benefits.

And often, the contractors wages are less per hour than the salaried
employee *because* they get benefits and vacation.
Those employees affected by outsourcing all have the same view... they
lost their jobs due to it.
Depends on *why* and *how* the employer is outsourcing. If they are
*eliminating* the positions yes, unless they offer contracts to the people
*in* the positions they are eliminating. If they need to augment or add to
their current staff, or divide responsibilities for security, then no.
 
J

Joe Canuck

Stephanie said:
Not necessarily. You pay the contractor for the actual time they work, and
not for warming a desk chair. You also don't pay a contractor for breaks,
lunch, vacation pay, stat holiday pay, employer expenses like Workers Comp,
unemployment, pension, group health and dental plans, training and any other
benefits.
Which is why contractors usually charge double the rate of an employee.
 
S

Stephanie Serba

Joe Canuck said:
Which is why contractors usually charge double the rate of an employee.
Unfortunately, without my designation in hand, I am actually *underpaid* for
the type of work I do. In an employer/employee situation I make $21.50 per
hour, but if I were a registered CGA student I'd have the equivalent of a
3rd level student and I'd be getting something like $40 or $45 per hour. I
only charge $30 to $35 per hour for contract work. I do charge $65 per hour
for training and software/computer related work (troubleshooting, software
installation/upgrades, hardware installation/upgrades, repairs, technical
support).

Most contractors I've met charge less per hour than salaried employees get.
They're just able to charge more hours.
 
J

Joe Canuck

Stephanie said:
Unfortunately, without my designation in hand, I am actually *underpaid* for
the type of work I do. In an employer/employee situation I make $21.50 per
hour, but if I were a registered CGA student I'd have the equivalent of a
3rd level student and I'd be getting something like $40 or $45 per hour. I
only charge $30 to $35 per hour for contract work. I do charge $65 per hour
for training and software/computer related work (troubleshooting, software
installation/upgrades, hardware installation/upgrades, repairs, technical
support).

Most contractors I've met charge less per hour than salaried employees get.
They're just able to charge more hours.
When I was an IT person and did contract work, I typically charged
$500/day and up depending on the work
 
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Which country would you prefer if you do outsource? Top 2 are Philippines and India.. I think Singapore is closely catching up.
 
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