Thought Leaders in Outsourcing: Interview with David Schnitt, CEO of IQ BackOffice (Part 6)

Sramana Mitra: I think it is more in the IT services world, where you develop software. Or in call centers, I also see that trend.

David Schnitt: For call centers I can see that. I am sitting in our office in Manila right now, and we have great people who have very neutral accents; they are well trained. Given that the Philippines was an American colony for years, people here are very Americanized. A lot of the client-facing work we have we do out of our Manila operation, and if the client´s vendor or customers call our office here, they don´t know that we are sitting here at all.

SM: I think what caused a lot of the nearshoring trends to develop were time zone differences. People have to work together and one part of the world has to stay awake in the middle of the night, for example. That just burns people out.

DS: We have a large night shift here in our Philippines operation. In India, we work mostly day and evening shifts. We don´t find much need for nearshoring. Clients don´t ask for it.

SM: Business process outsourcing is slightly different from IT services or call center outsourcing. That segment of the industry has less nearshoring need than the ones that have more real-time components to them.

DS: That is true. But we have a lot of real-time components as well. Closing the books for a client, for example, is very real time.

SM: How do you handle that?

DS: We work during the U.S. day shift. We essentially work 24 hours. One of the keys we focus on is providing fully re-engineered best practice processes. If you look at a typical financial cycle, where you are closing the books and producing financial statements, 70% of that closing process is spent cleaning up bad data in the subsidiary processes like payables and receivables. If you have good quality and timeliness in those individual processes, closing the books actually becomes an almost effortless exercise and something you can do very quickly. We are very strong believers in process improvements and re-engineering. If you do these things well, you can achieve much higher service levels, and we are able to do that here just fine for our U.S.-based clients.

SM: What other business process do you think are open to entrepreneurship at this point? You have identified a niche where there is not a lot of competition, which is mid-market finance and accounting services. What other segments do you see from where you sit that have that kind of opportunity?

DS: We are focused on the back office end. There are other back office functions that companies can look to outsource, like order management – handling sales orders for customers. It is something a lot of companies haven’t thought about outsourcing, but there are a lot of significant benefits. If you go through the functions of a company, a lot of them are traditionally outsourced, like marketing, PR, sales, etc. There are a lot of providers who have covered those already. Some of them are onshore, some of them are offshore.

We have a number of clients in the restaurant industry. A couple of years ago, a company started to provide a call center to take orders for takeout. Interestingly, if you look at a restaurant operation, you will find that people who call for a takeout order are very disruptive to the people serving the customers sitting in the restaurant. This company, which I think is based in Colorado, came up with the idea for this outsourced basis, where they can take the order over the phone from the customer and electronically transmit that order to the restaurant, which prepares the meal and waits for the customer to show up and get it. They have had huge success doing that for a number of restaurant chains. They started with one of our clients, and now they have moved to a whole bunch of other ones.

So those opportunities are out there. A lot of them at this point are industry specific, so if you have good knowledge of a certain industry and see where the pain points are, you can find opportunities all over the place.

SM: It was nice talking to you, David.

DS: Thank you.

This segment is part 6 in the series : Thought Leaders in Outsourcing: Interview with David Schnitt, CEO of IQ BackOffice
1 2 3 4 5 6