Opportunities in Outsourcing KPO BPOEntrepreneurship Career CA Aniket

Opportunities in Outsourcing, KPO, BPO-Entrepreneurship & Career CA Aniket S. Talati Partner, Talati & Talati, Chartered Accountants Secretary, WIRC of ICAI 17 th February, 2018

What is Outsourcing ? outsourcing is "an agreement in which one company contracts-out a part of existing internal activity to another company. It involves the contracting out of a business process (e. g. payroll processing, claims processing) and operational, and/or non-core functions (e. g. manufacturing, facility management, call center support) to another party.

Why to Outsource ? Companies primarily outsource to reduce certain costs, which may include peripheral or "non-core" business expenses, high taxes, high energy costs, excessive government regulation or mandates, and production or labor costs.

Evolution of Outsourcing Intellectual arbitrage allows outsourcing of core processes KPO Cost Arbitrage BPO ITO Cost Arbitrage Mid 80 s Global Delivery Model comes of age with changing telecom scenario 1990 -1994 Infancy Repeat initial successes by developing robust knowledge management methodologies for KPO Emergence of Focus on business Multi-geography Quality certifications domains strategies like CPOC Focus on developing robust knowledge management methodologies Emergence of Focus on business Quality certifications domains enabling (CMM, ISO) access to complex business-facing IT Focus on knowledge systems management 1995 -1999 2000 -2004 Growth Geographical diversification by setting up delivery centres in multiple locations 2004 -2007 Evolve to provide end-to-end consulting services 2008 -2017 Maturity

The need of outsourcing : Value Addition Low Medium High RESEARCH & ANALYTICS (40 -60%) INSURANCE (40 -60%) S G N IT SERVICES (25 -50%) ED ACCOUNTING / CALL CENTRES (35 -40%) TRANSACTION PROCESSING (25 -40%) R C IN S A E S I V A • Increased complexity can lead to higher savings with potentially less risk

Offshoring Scoping matrix IT, Infrastructure and administration support (ITO) § Core banking systems § § § Life policy systems maintenance and application development Institutional, Investment & business banking § Loan accounting and equity / Fixed Income trading systems Application development and maintenance Remote infrastructure management Package implementation and support Database administration, data mining and warehousing solutions Middleware development and support Product based transaction § Mortgage and personal loan origination, processing and servicing collections processing and customer § e. Disputes processing contact centres (BPO) § Credit card processing § Consumer finance § Cash management / Fund transfers and reconciliations Analytics Outsourcing activities (KPO) Wealth management, life and general insurance Retail Banking § § § § Insurance claims administration and payment Policy underwriting Insurance agency management Fraud detection Recoveries Trial balance analysis Brokerage operations Commissions administration § § § § Inbound/outbound contact center Customer query handling Data entry, indexing and content management Customer background verification and finalization Loyalty retention (customer care program) Customer statement and other periodic reporting Regulatory requirements/mandate related support and administration Payment processing § § § Mortgage and personal loans Portfolio pricing Data warehousing Data-mining Marketing analytics § § § § Project finance documentation Support FX, currency ops and derivatives settlement Trade finance and LCs – advice and settlement Corporate finance Risk management Securities processing Custody operations and trade Fund performance analysis § Equity research and M&A analytics support (valuation and Reporting and accounting related financial modeling) Actuarial support § Credit proposal analysis, preparation and documentation, Product pricing including Dynamic Financial Analysis (DFA) portfolio analytics models § Library services § Financial model validations § §

Types of Outsourcing ? Types of Outsourcing Business Process Outsourcing Knowledge Process Outsourcing On-Demand Outsourcing Off-Shore Outsourcing Digital Outsourcing Other

Business Process Outsourcing : Book Keeping Administr ation Data Entry BPO Tele. Marketing IT Help Desk Data Mining Customer Support

Knowledge Process Outsourcing : Insurance Product Developme nt Financial Research KPO Engineerin g Services Market Research Auditing

KPO – The Emerging Wave: HIGH 30 -45 TIERI and II MBA, CFA, CPA, Post Graduates (Finance & Accounting) Moderate Complexity Skill Set Requirements Billing Rate (USD per hour) 15 -25 High Complexity TIERII and III MBA, CPA, Graduates (Finance & Accounting) Finance & Accounting Under Graduates 10 -12 Low Complexity LOW

Outsourcing and Chartered Accountants Auditng and Assurance Service are best performed by Indian Chartered Accountants Other Business Processes such as Cost Benefit Analysis, Laws, Financial Services, etc. can be outsourced to a Chartered Accountant Accounting Includes Accounting and Book Keeping process of a given Business Taxation Complex Tax regime much simplified by outsourcing the process to a Chartered Accountant Auditing Other Business Processes

Countries where opportunities of Outsourcing work are endless for Indian CAs : • Major tax regarding matters such as tax planning and complex tax regimes are outsourced to Indian CAs. • Work related to accounting, auditing and data entries are mostly outsourced in USA. • Book keeping and accounting work in Australia are outsourced to Indian CAs. United States of America Canada Australia United Kingdom • Assurance services and Consultancy services in legal matters as well as Financial matters are outsourced in U. K.

Opportunities to build Career or to become an Entrepreneur : Opportunities for Entrepreneurship and Career Building Introduction of VAT in Middle-East countries Investment Opportunities across globe EB-5 Visa Program

Opportunities for Indian CAs as VAT introduced in Middle-East: Requirements under VAT for which Indian CAs are consulted : § Mandatory registration for VAT for all businesses. exceeding the mandatory VAT registration threshold. § Filing of periodic VAT returns with the tax authorities (either monthly or quarterly). § Remitting any VAT payable by a specified date. § Record keeping in respect of all business transactions: § Tax invoices § Debit or credit notes § Import and export records § Records of goods/services provided for free or allocated for private use § Zero rated or VAT exempt supplies and purchases

Opportunities for Indian CAs as VAT introduced in Middle-East: Requirements under VAT for which Indian CAs are consulted : Following registration, a VAT registered business is required to charge and remit VAT collected to the Tax Authority on a periodic and regular basis. The total amount that must be remitted is determined by the amount of VAT charged on the total supplies of goods and services less the amount of VAT credits incurred on purchases, for the respective reporting period. In most jurisdictions, the process of reporting and paying VAT is completed through the filing of a VAT Return. VAT registered businesses are required to file the VAT Return usually by the end of the calendar month following the end of the reporting period, which may be monthly or quarterly. The remitting of VAT either on a monthly or quarterly is a serious business consideration in view of the potential cash flow implications for the business.

Investment Options around the globe :

Role of Indian CAs under EB-5 Visa Program:

CA. ANIKET S. TALATI +91 -9825551448 aniket@talatiandtalati. com