President's Message
Atty. Benedicta Du-Baladad Message from the President:

Benedicta Du-Baladad


To FINEX members and friends,

PRESIDENT’S REPORT
November 2017 Issue

We are now on the final stretch of 2017. This year has been one of the busiest and exciting for both FINEX and the country.

Earlier this month, our country was once again placed in the limelight as we hosted this year’s ASEAN Summit. The summit provided us to showcase what our country can share to the world and the creativity of the Filipino people. Indeed, the recent hosting of the ASEAN summit placed our country

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F&A outsourcing–not just an option but a necessity
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Ms. Wilma Inventor MirandaMs. Wilma Inventor Miranda

BUSINESS MIRROR (FINEX Free Enterprise)
October 13, 2017

F&A outsourcing–not just an option but a necessity

Finex Free Enterprise is a rotating column of members of the Financial Executives Institute of the Philippines appearing every Wednesday & Friday in BusinessMirror, banking & finance Section.

With the drive toward digital disruption, service providers and clients are up and about chasing technology. The role of service providers has become more a necessity than just an option, especially for clients who have limited resources investing in information-technology (IT) infrastructures.
It will take a huge investment for a company to catch up with automation. They can focus on improving their core business if they outsource to a third-party provider whose main service is finance and accounting (F&A) and leverage the cost of investing in technology by servicing several clients.
Aside from investment in infrastructures, there is a scarcity of people who have the skills to run a highly sophisticated automation, much more the judgment skills necessary to perform certain tasks. Companies find it increasingly difficult to hire qualified people and the time to train them.
For instance, if your business is in retail, your core business is selling your products. You focus on training your sales people and invest in automation, such as software to track sales and monitor client preference, maintain a client database, prospects, etc. As for accounting, which is also crucial to any business, your can outsource accounting functions to a third-party provider who has the automated infrastructure and trained people to perform the tasks since that is their core business.
The company is not also stuck with people you may not need later, if, for instance, you are doing a special project lasting only for a brief period. If one cannot source talents internally or by hiring outsiders, outsourcing can be an effective solution.
The Philippines, for instance, should improve the nonvoice outsourcing, such as F&A. Although we are still No. 1 globally in the call-center industry sector, the threat of technology disruption is imminent since robotics, artificial intelligence and other forms of automation are taking over tasks formerly done by people in call centers.
On the other hand, F&A outsourcing consist of jobs that are judgment intensive that cannot be replicated easily by automation, although there are those that are transaction intensive, such as procure to pay  and order to cash that can be automated or done by robots later.
Call centers still account for 69 percent of total outsourcing revenue in the Philippines in 2016. F&A is gaining ground at 19 percent followed by human resources at 5 percent, procurement at 3 percent,
engineering at 6 percent and other outsourcing services at 6 percent (source: Contact Center Association of the Philippines).
For F&A outsourcing to grow in the Philippines, we need to train more people capable of handling technological advancements. This takes time and effort for technology is growing at a speed faster than we can train people. But even as we train people using current technology, new ones develop and are adopted—so this is a constant chase after technology updates. We also need more accounting graduates to handle the judgment-intensive aspect of the job.
Companies no longer go for cost arbitrage alone but also on process improvement and digital transformation. There is a growing demand for F&A outsourcing worldwide, according to a KPMG survey in 2017, generating almost 60-percent demand among global business services in tandem with IT outsourcing.
The KPMG survey shows us that for the Philippines to cope with digital transformation we need to see where the big investments are. The list shows that companies tend to invest more on analytical tools, such as business intelligence and others. The second is hiring more staff with data and analytics skills. It is no longer enough for one to be an accounting or finance graduate. One must have technical skills and respect for digital innovations, as well.
Ready or not, the world is fast evolving and certainly it cannot wait for everybody to catch up. It is up to the adopter or the provider to be at speed with the pace of technology development.
Inventor, Miranda & Associates, in cooperation with Philippine Institute of Certified Public Accountants, is sponsoring a seminar, entitled “Outsourcing Trends and Opportunities”, in Bacolod City at Business Inn Hotel from 8 a.m. to 5 p.m. on October 17…eight Board of Accountancy Certified Public Accountant units Competence Area B…for details call 0917-5000517.
****
Wilma C. Inventor-Miranda is the Chairman of the Media Affairs Committee of Finex, Treasurer of KPS Outsourcing Inc. and managing partner of Inventor, Miranda & Associates, CPAs. The views expressed herein do not necessarily reflect the opinion of these other institutions.
https://businessmirror.com.ph/fa-outsourcing- not-just- an-option- but-a- necessity

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