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Feb 10, 2020

Offshoring Business Functions: Lessons Learned from a Strategic Transformation

Steve McNally, CPA, CMABy J. Stephen McNally, CPA, CMA


Corporate Finance blog iconBy leveraging effective planning, change management, and project execution – along with applying a healthy dose of strong leadership – you can limit the pain during a business transformation and achieve greater success. Sometimes there is a lot of time for discussion and preparation; other times things move more quickly. That was my predicament a few years ago. This blog highlights our company’s successful transformation journey, including some of the lessons learned.

International SignpostOur Time to Change Was Right Now

The call came on a Monday morning. Senior management had decided to outsource and offshore routine accounting tasks to India. As the company’s largest operation, our team was going to be the pilot for this global initiative. The transition would start in three weeks, and it would “go live” in six months.

What do you do? How do you start?

Initially, there was a sense of shock. Upon reflection, though, it was clear our company had been facing significant headwinds. To remain competitive, this tough decision made sense.

Our Journey

Before starting, fully understanding the nature and scope of the initiative was critical. What were the key assumptions and were they reasonable? For example, were the expected headcount reductions consistent with the actual work to be outsourced? Also, were all potential risks appropriately identified? For example, how would we address language barriers and time zone differences?

Once we fully understood the scope, my top priority was to draft a preliminary project plan, including milestones, accountability, and timing. The plan included three phases: on-site training (Phase I), remote training (Phase 2), and “go live” (Phase 3). The first milestone, though, was to inform my team of the initiative, including the impact on headcount. These were tough conversations, but the team appreciated the transparency. Building trust would pay dividends later.

Three weeks after “the call,” the team from India arrived to start the knowledge transfer process. We held a kick-off meeting upon their arrival with my full team and other stakeholders to instill a “one team” mindset and to set expectations for the next few months. To ensure the team from India was effectively trained while on site, we carefully orchestrated nearly every minute of their stay, required them to draft desktop procedure (DTP) documents for each activity, and approved each of the DTP documents before they left our site.

Phase 2 began once the transition team returned to India. This phase was all about working together remotely. The transition leaders used the DTP documents they had drafted to train their fully staffed team. They leveraged screen sharing and other technology to shadow my team and pressure-test the DTP until they could perform the work outright with my team’s oversight. Finally, we moved into Phase 3, a staggered “go live.” My team initially provided close supervision, but the team in India quickly became proficient and achieved “steady state.” Our transformation of supply chain finance was a success.

Lessons Learned

The following are a few of the lessons I learned during the process that I’d like to share:

  • Compelling Business Need – Make sure you know what you're doing and why you're doing it. What is the problem you are trying to solve and what is the root cause?
  • Project Plan – The more time and effort you invest upfront to plan out what you're going to do, how you're going to do it, and the resources you’ll need, the more likely you'll stay on course and achieve success.
  • The Case for Change – You must win the hearts and minds of your team, senior management, and other key stakeholders. You need to sell the change because you can’t get there alone.
  • Project Management – Once you have a great plan, you must effectively manage it and keep things on task, regardless of expected or unexpected difficulties.
  • Risk Management – If you want to deliver your objectives without too many surprises, and to prepare for the surprises that will happen along the way anyway, effective risk management is critical.
  • Consultants – Consultants can provide important subject matter expertise and otherwise augment your team. But you are accountable for making the decisions and delivering the results.
  • Communication – From start to finish, you should constantly reinforce key messages. If so, you’ll underscore priorities, help “connect the dots,” and ultimately change the culture.
  • Sustainability – Top performers will move on, business priorities will change, and systems will need upgrading. Your challenge is to sustain the benefits achieved by the transformation despite these hurdles.
  • Change Management – How do you prepare and support your team and the organization at-large for the “future state”? I believe change management is the most important ingredient for a successful transformation.

I would love to hear your transformation story and insights on making your initiatives a success.


For more on these lessons learned, see “Business Transformation: No Pain, No Gain?” in the November 2018 issue of Strategic Finance.


J. Stephen McNally, CPA, CMA, is CFO of the PTI Family of Companies in Toledo, Ohio. Prior to PTI, McNally was the finance executive for Campbell Soup Company’s supply chain operations based in Napoleon, Ohio. He can be reached at j_stephen_mcnally@att.net.


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Statements of fact and opinion are the authors’ responsibility alone and do not imply an opinion on the part of PICPA officers or members. The information contained in herein does not constitute accounting, legal, or professional advice. For professional advice, please engage or consult a qualified professional.