Accounting and compliance teams at large companies have a ton of manual repetitive work. Over the last 15 years, everything that is not specialized — accounting, compliance, customer services — got offshored to a team thousands of miles away.
This includes internal offshoring to a shared services center or externally to a business process outsourcer. Companies typically do this to capitalize on lower labor costs and to increase operational efficiencies. However, it may also present challenges related to communication, time zone differences and data security. The good news for businesses is that with advances in technology, specifically generative AI, the tasks that they thought needed to be completed by humans can now be automated.
After working with numerous CFOs and CAOs, the general consensus is that leveraging GenAI to automate tasks versus offshoring those tasks is a key competitive advantage for the following reasons:
There are logistical benefits to automating functions like not needing to manage a team of people 12-plus hours away, and efficiency improvements like getting real-time results, interacting with software and running analytics and reports on data rather than waiting for spreadsheets over email. It also helps with retention because your U.S.-based team does not have to wake up at 5 a.m. just to secure a few hours of working time overlap.
The few key things to consider when making a decision between offshoring and automation are the following:
- Will the accuracy of the GenAI solution be better or worse than offshore personnel?
- How do the costs compare?
- Will the GenAI solution help me scale better and faster?
- How quickly can the GenAI solution be implemented and when will I see results?
- How will my data be protected? Which option is more secure?
For most clients, once they go through these questions GenAI becomes the clear choice. These are the eight biggest benefits they see from automating vs offshoring:
- Increased efficiency: GenAI-powered automation performs tasks at a significantly faster rate than human operators, increasing throughput and reducing the time taken to complete processes. Measure turnaround time in seconds, not hours and days.
- Reduced errors and increased consistency: GenAI systems are more accurate and consistent than humans, particularly for repetitive tasks because they don't suffer from issues like fatigue, turnover or personal bias, which can affect human operators. This reduces errors and improves data quality, which leads to higher quality financial statements and better business decisions.
- 24/7 operations: GenAI systems can operate around the clock without breaks, allowing for continuous process execution, which is particularly beneficial for functions that need to be available across different time zones.
- Cost savings: While offshoring can reduce labor costs, automation can eliminate them entirely for certain tasks further saving cost. Additionally, GenAI doesn't have associated offshoring costs like cultural training, travel expenses, or communication infrastructure.
- Scalability: AI-based automation systems scale up or down the same way software does so you can quickly meet changing business demands, offering flexibility without the need for recruitment or layoffs associated with human teams.
- Security and compliance: GenAI solutions can be designed to adhere strictly to predefined rules and regulations, reducing the risk of compliance issues and data breaches that can be associated with offshoring.
- Improved analytics: Automation using GenAI includes comprehensive tracking and recording of actions, leading to more robust data for analytics and insights.
- Key in-house experts: Rather than hiring people who hire, train and manage people on the other side of the world and serve as processors, you can hire a few key people who manage machines in their own time zone.
Businesses are scrambling to understand GenAI and how it can bring demonstrable value to their enterprise organization. We are seeing very clearly in the world of finance and accounting that it can be used to automate tasks, increase efficiency and replace the role of offshoring, which will help businesses both save money and get better results.
