As the Owner or Partner of a CPA firm, you wear many hats—managing client relations, driving marketing efforts, fostering business growth, hiring and training staff, and keeping up with ever-changing tax laws and market trends. Balancing these demands while controlling costs is no small feat.
To streamline operations and access top talent, many CPA firms globally are turning to offshoring in India or setting up Global Capability Centers (GCCs). These centers promise benefits like cost efficiency, flexibility, and a vast talent pool. However, offshoring comes with its own set of challenges that aren’t always discussed openly.
While some CPA firms thrive by leveraging these global resources, others encounter significant obstacles. Misaligned expectations, cultural differences, varying technical expertise, and communication gaps can lead to disappointment. Understanding why offshoring in India isn’t always a surefire success is crucial for making informed decisions. Let’s explore some of the key reasons behind the mixed success rate of offshoring in India.
1. Working Methodologies:
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- Indian finance professionals, such as Chartered Accountants (Indian CPAs), Commerce graduates, and MBAs, follow different methodologies compared to their US and Canadian counterparts. Indian professionals are trained in Indian accounting practices, tax structures, and software.
- This training often leads to difficulties when CPA firms attempt to integrate these practices with their own.
2. Cultural Differences:
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- India is full of diverse cultures and customs. Every 100 miles in India you will get differences in languages, customs and rituals. India is full of festivals and celebrations. Due to Indian roots, customs and cultures Indians are emotional in many ways. Which is different with compared to western part.
- These cultures bring differences in terms of their working behaviors, their priorities in life, their principles of working, their emotional quotient and their communication methods.
- Many CPA firms are not fully aware of this cultural diversity, leading to misaligned expectations and challenges in collaboration.
3. Communication Gap:
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- While India is proficient in English communication, it has a multitude of native languages, with over 50 spoken across various states. This linguistic diversity can create communication barriers apart from the national language India has that is “Hindi”.
- Different accents and regional languages may lead to misunderstandings and ineffective communication channels, affecting the quality of work and collaboration.
4. Geographical Differences:
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- India is a large country with varied regional customs, languages, and infrastructures. Some regions are better suited for offshoring due to their infrastructure and talent pool.
- Many CPA firms don’t understand which part of India is more compatible with offshoring and infrastructural benefits. Ended up doing offshoring in other parts of India which is not compatible with the offshoring infra, availability of talent they are looking for resulting in dissatisfaction.
- For instance, the southern part of India, including Bangalore and Hyderabad, is known for IT services, while the western part, such as Mumbai and Ahmedabad, is more focused on accounting and taxation, having more robust infrastructure available in this part of India suitable for offshoring services of Accounting and Taxation. Misalignment with the right region can lead to inefficiencies and dissatisfaction.
5. Selection of Offshoring Partner:
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- Many CPA firms select offshore partners without thoroughly evaluating their processes, training capabilities, and flexibility. This can result in mismatched expectations and unmet needs.
- Firms with niche business areas, like real estate, require specialized knowledge and processes. Choosing an offshoring partner that cannot accommodate these specific needs often leads to disappointment.
In conclusion, offshoring can be highly beneficial, but it requires careful planning and the right personnel to bridge the gap between your firm’s needs and the offshore team’s capabilities. Ensure you have experienced and trusted bridge personnel to navigate these challenges effectively.
In today’s interconnected world, building a robust offshoring team is essential for CPA firms and finance professionals seeking to boost profitability and productivity. To make offshoring or setting up a Global Capability Center (GCC) in India successful, you need a trusted bridge—an experienced professional who can ensure smooth operations, efficient onboarding, and continuous support.
You require someone with a deep understanding of the Indian talent pool and the intricacies of the local market, ideally someone who has worked with CPA firms before and can handle technical, hiring, and training aspects as your “Point of Contact.”
Karma Embrace is here to fill that gap. With over a decade of experience collaborating with 100+ CPA firms and finance professionals across the Canada, we specialize in providing offshoring services tailored to your needs. Our dedicated team includes a senior manager or manager with over 5 years of experience in the offshoring industry, specifically working with CPA firms. This expert will serve as your key contact, helping you define work requirements, hire and train staff, and develop efficient offshore processes.
By partnering with Karma Embrace, you streamline communication and reporting through a single, experienced point of contact, reducing complexities and enhancing your offshoring success. Our clients have achieved remarkable results thanks to our dedicated services.
To know more about how “Point of Contact” at Karma Embrace works, check out our blog on “Understanding the role of POC”.
