A chat with OPI’s CEO, Clarence Schmitz, a leader in the finance and accounting market.

by Denise Doig

FAO Today: In what ways are your clients looking to improve their financial and administrative offerings?

Clarence Schmitz: Our clients are constantly seeking ways to improve their finance systems and procedures. Those who benchmark in the second, third or fourth quartile of performance measures strive to move up in ranking. We work with them to accomplish that objective.

Beyond that, there are at least three areas that seem to be on the minds of most of our clients: (i) reducing the continuing costs associated with Sarbanes-Oxley and other regulatory compliance; (ii) reducing the time it takes to close the books in order to get better information to management and to meet tougher SEC reporting standards; and (iii) developing a robust “corporate dashboard” to aid decision making and monitoring.

FAO Today: What role has your Indian shared-services centers played in OPI’s success?

Clarence Schmitz: Our Indian shared- service centers are at the very core of our value proposition. The quality of our service and our ability to take on highly complex processes both depend on how well those centers operate. It isn’t easy managing a facility to meet the high standards we set for ourselves—as many other companies have learned, especially when attempting to set up offshore captives. We have built a strong management team in India and work very hard to groom and promote people into the management ranks. The continuing education and upward mobility we offer our personnel enables us to consistently achieve staff turnover that is less than 10 percent—one of the lowest in the BPO industry. Strong management and continuity are the building blocks to any successful offshore operation—especially one that is growing as rapidly as OPI.

FAO Today: What finance and accounting services are most requested, and why?

Clarence Schmitz: The most requested services tend to be those that are labor-intensive or those functions where companies have the greatest difficulty recruiting and retaining talent. This would include accounts payable, payroll, and various reconciliations, such as bank statements, inter-company accounts and vendor statements.    

Companies can achieve substantial cost savings in these areas and often find that service levels improve considerably at the same time. We have found that once clients outsource one or more functions to OPI, they almost always expand the scope to other functions within the first twelve months, as they realize the cost savings potential and become comfortable with the quality of our services.

FAO Today: How did you develop OPI’s onsite/offshore approach?

Clarence Schmitz: When we started OPI we evaluated a number of service delivery models ranging from 100 percent onsite (“insourced”) models to 100 percent offsite models. Our market research told us that the number one concern of CFOs was the fear of losing control of the outsourced functions. So we sought to combine the two extremes—place people onsite who could interact with the client each day concerning exceptions, changing priorities, and the like—and still capture substantial savings and process improvement by placing the vast majority, as much as 80 percent, of the people offshore. In this way, the client never has to work directly with the offshore team—only with OPI personnel who are “right down the hall.” We found that this delivery model, while complex, went a long way toward overcoming the CFO’s fear of losing control.

FAO Today: After the corporate scandals of the last couple of years, how can outsourcing providers help their clients avoid the fates of the Enrons of the world?

Clarence Schmitz: The first thing that providers must do is to partner with their clients to assess the control environment and to continuously make improvements. This goes well beyond the SAS-70 reports that have become so commonplace. Providers should put themselves in their client’s places. For example, OPI has had a “whistleblower” policy in place for quite some time covering all of its production personnel. This policy mirrors what our clients would have if the process remained in-house. Regular status meetings also can bring accounting issues to light. Because OPI is comprised of so many CPAs and chartered accountants, we know what we are talking about when it comes to GAAP, SEC and tax compliance, for example.