#BKOT EP 10 METRICS & KPI'S FOR MEASURING AN OFFSHORE TEAM PERFORMANCE

Hosted by: 

Chris Rivera, Director Client Relations, Entigrity

Guests:

Sia Kal, President, FY USA

Shawn Parikh, CEO, Entigrity Offshore Staffing

Chris: So hello everybody my name is Chris Rivera, Director Client Relations with Entigrity,  and we want to say happy friday to everybody, thank you for joining hope everybody's safe and sound out there and with the holiday coming up make sure that we stick to responsible plans but you know today we wanted to share with you some ideas and feedback on Metrics and Key Performance Indicators in Relation to your Offshore team. And with me I have Sia Kal, FY USA and also the chairman of Entigrity Shawn Parikh. So I  want to get started right away and I know Sia is etching to come up with some ideas here so Sia takes it away.

Sia: Okay, thank you Chris on the edge of my seat and I can't wait to grab hold of these topics and wrestle with them right. I think I'm hoping that most things I create are going to be good so we'll see. We'll let our audience be a judge of that. Welcome everyone if you're joining us from wherever you are we welcome you to today's facebook live event here it is my honor to share the stage with Shawn and Chris and really the topic for today is metrics and key performance indicators related to your offshore team, you know for those of you who know me you know I've been coaching accounting businesses. We do joint venture partnerships now and so the offshore team has been an integral part of a lot of the firms we work with and their ability to grow to scale their business and to improve the overall performance. So I've been intimately involved with this particular aspect of an accounting business for quite some time and that's how we're all related here not biologically,  obviously I don't have the good looks that Shawn has or Chris has but you know but somehow we're all related and we impact each other and  this was one of the main reasons frankly we decided to partner up with entigrity because first of all  we were a little bit biased because we had seen the good work that they had done on the firms that we've been working with and so we thought well he what's good for us is good for others as well let us collaborate to make a bigger more positive impact in the in the industry. So having said that it's anything we do folks is we track and measure without tracking and measuring it's really no point of having any activity because we want to know how well we're doing right. Self accountability is  key to any kind of sustainable growth in business so that's why we're talking about metrics and key performance indicators as it relates to the offshore team. So Shawn you know you've had you've seen it all right you've seen it from all different types of perspectives different types of firms from smallest to the largest firms out there and you've seen what works what becomes a challenge and how that all of that can be tracked and measured by some key performance indicators and some metrics. I want to just pass it on to you and just kind of let you take it whichever direction we go we're along for the ride.

Shawn: So thank you Sia, thank you Chris for today's podcast I think often you know we talk to accounting firms day in day out we are running across you know acquiring client retaining clients we lose you know the track sometimes that is what is the real impact that we are making in the life of accountants. You know when we look at key performance indicators, my philosophy is little you know is you can track number one you have to track but it is not just about profitability tracking net margins gross margins you know those are very important and those are there but it is much bigger impact you know where offshore staffing makes to the lives of accountants you know how we can track that, so well we can we will definitely go deep into this after you know as you said Sia we have been working you have been working all of us endeavor to you know make life of accountants better, you know make them make their life a little more easier a little more comfortable bring balance to the life of their team, their life however when we were thinking about this topic when you suggested that we should do this topic because you know nobody talks about everybody talks about you know savings 60% savings 70% savings and labor cost, hire people at 9- 10 dollars an hour 11 dollars an hour you know it's no brainer there's nothing that you need to track practically speaking when you hire somebody instead of 40 dollars an hour 50 dollars an hour 100 dollars an hour versus 10 or 15 dollars an hour so there is this huge gap which you know which is a no-brainer for there is nothing to track practically but when I had a second look at what you suggested it actually made me think that it is very important to track things which are you know fundamentally important so I have kind of broken this into two aspects one is a little short-term tracking and other one is long-term which is really important for me. In the short term, can I share my screen I believe you can yes yup thanks yeah! Can you see it yeah we could see it okay so in short run it's very conventional you know the capacity you measure the capacity you had let's say you know this many people and now you had 350 hours added to your capacity every month so it's easily trackable savings you know traditional again traditional metrics so as you onboard, let's say you hire one full-time offshore staff working 160 hours a month for you 40 hours a week for you giving you productivity of 160 hours, the simple savings matrix is you have the same work done onshore for you at 50 dollars you're getting it done 10 dollars 40 dollars is the incremental gain getting into your pocket before tax multiplied by number of hours, a very short-term minimalistic approach to tracking for performance and productivity of this, so that's one piece of you know how you can do it I'll come to long-term later in our discussion but if you ask me on a shorter term this is something probably any accountant would track in terms of key performance indicators. 

Sia: Yeah good short-term components to look at Shawn I agree with you I think it's important to acknowledge especially because we're talking about KPI’s and we're talking about metrics that those are the things that we target and we measure to see how we're doing otherwise in other areas in terms of how we're handling our offshore team to know how well we're doing we're looking at the kpis and metrics but I have witnessed this on many occasions where the key performance indicators become the only thing that people care about as if we just want to pound the way the team to get to the specific number target number and on the surface it may appear like this is oh we're so focused and we've got a very specific number in terms of whatever your better or all utilization or whatever and we're just trying to hit that number and we're just going to pound pound pound to to hit that number, the problem with that is that if we don't put the systems in place and we don't think about how we're going to get to that kpi how we're going to get to that target, so measuring it is one thing but hitting a target requires some preliminary work that you would do on a short-term basis and of course a long-term basis that's how it makes the kpi tracking more with better impact and more meaningful personally you know I've looked at you know there's there's two sort of separate in my mind you divided it into short-term versus long-term also there is the sort of the firm's kpi and then there's very specific things related to the offshore team right and some of the no brainers of course for the firm is better is of course your profitability and then you have your utilization you have your realization and you have your average hourly rate, all those things ought to improve when you have your offshore team and it's functioning well, now that's firm related which yes encompasses your offshore team but there's very specific things for the offshore team which is you know one of the things that I do with our  the firms that we work with now is we actually look at utilization separately on site versus offshore just to see because there's a little bit of a different dynamic and you need to be able to distinguish the two a little bit that's one, two there's other twos that I'll get to in just a bit I don't want to filibuster this conversation but Chris what are your thoughts on some of the things you've heard Shawn mentioned and you heard me say.

Chris: And speaking with clients literally right before this call I was thinking with a client and something that was important was turnaround time right and in order for them to be efficient, this was a very particular instance to where they had they know exactly 1.75 1.25 how long it takes and they asked us you know how long does it take for our associates to do that specific work by all means there's they can find out interviewing them but turning around that work quickly will then correlate with how efficiently they're operating and meeting their other metrics as well but the turning you know turning over that work quickly is the most important part and especially since I just heard it you know right on a racer call.

Sia: Interesting how fresh it is right yeah. Absolutely Shawn you mentioned you shared some short-term things but you mentioned that there's some long-term metrics that you also look at, would you mind sharing those with us. 

Shawn: Well sure so well my thought process here is we work together in a success of accounting firm and and success is different for everyone for Chris it is different for me it is different for you it is different well success is you know when your business allows you to spend time with your family in business you know  you like what you're doing you know you are good with your colleagues and at the same time you enjoy the sport that you play so it's very relative, so any key matrix that I want to have in longer run would be would be a combination of professional and personal success it would never be like you know an ebitda that's coming out it would never be like higher gross margin so I was thinking through it and I thought that I have thought about this before and I can put it in a presentation so I know it makes it a little more clear so I'm going to share a slide with you again. Can you see my slide? Yes Yeah in the longer run one of the things and then you know everyone wants that they want to spend more time with family, so what is the percentage or what is the amount of time reduction that has happened in partners or owners spending in there firm for what we call as partner in time that is a success. What is the amount of workload that has reduced on your senior management on your leadership team on your onshore team and one of the most exciting measure in longer run is profit time measure, I know this is something that we have kind of come up with and we always highlight to our all prospective and actual client profit time measure is I was discussing this with Chris and Chris might know this, Chris was thinking that this was a average billable increase in billables this is actually but when you invest one hour in your business what are you taking home, when your billables might be $500 an hour but you don't know your overheads are $300 you might be making $100 an hour you know so what are you taking home after investing an hour in your business so that's where we thought that you know this hour and again this profit time measure not only improves by high bottom line, no it also improves when your investment or your energy behind your firm reduces your investment in time reduces. so yes these are the three matrix you know I think are very very important in long term and and if offshore staffing in some way contributes to these factors and we have seen offshore staffing has contributed significantly to this three key performance indicators and Sia if you don't mind I can share one of the live examples with you this is an example I don't  know whether I shared this with you or not but this is an example of one of our existing clients and one before starting you know they were like four people 4-4 partner firm based out of New Jersey, Chris knows them very well and right next to Chris's window so they had no offshore staff they're doing great 4 million revenue 1.2 million in profits partner in time what we talk about investment in time that partner makes all the four in total that average work week was 40 hours a week and then the profit time measure you know the profitability divided by partner in time which is basically what you are taking home for putting you know work into your form.

Here is the situation how it changes in three to four years stand so that's where the real impact is felt that you know now you have seven staff member offshore staff member working, you have seen a real growth of 39% in your revenue good growth of 90% in your profitability of course great growth, but more more and more impactful or more and more achievement which we call it is is partners in time so we have seen about 16% reduction in partner time behind their phone which means their firms are running independently without their involvement so which is something you know we always chase. One of my colleague Michael you know he is one of our partners also in the business he's a cpa since 30- 35 years, he told me you know when I started my practice what I did was I went to every client and told him that you know I am the genius so work with me and that is now coming after me they all want me not myself so and I'm only one person so you know in businesses like accounting you know you are sometimes trapped in your own business model so average work week you know 6.5 hours reduction and the profit time measure which I told you about that's a big achievement when you get maximum value out of your same energy so that's kind of my side of you know thinking which is a little more little professional little social where we have a balance of how we look at you know achievements or how we look at improvement or impact, sometimes we tell you know the financial numbers that you know we are here last year we added 61million dollars to the bottom line of our clients out of our annual survey but that's not everything, after that are they happy with us are they satisfied are they finding it okay you know that this is the company that we are working with are they happy in their you know business so this is all important to evaluate so I thought these are some of the matrix which I think are important and can really give an idea of of how the impact we as an offshore staffing company has been able to positively make the life of accounting firms. 

Sia: That's a Shawn those numbers you shared are very commonly discussed I'm sure Chris discusses them with his clients as much as we also see them and our clients in the impact that they have you know and for us at FY keep in mind the way we the way we actually make a make our income make our revenue is not because of what we charge on a monthly basis because of the impact we have and the profit and so for us this is very near and dear to our heart because this is really impacting the core of what a business should really pay attention to in terms of profit and in time as you mentioned. You know the whole world is either talking about money or it's making money or spending money and it seems like it's the money that everyone is chasing but it's just a common language for other things that varies from person to person including something you cannot have more of which is time so being able to think it goes beyond just the profitability what an offshore team's impact could be which is really giving expanding and utilizing the very limited time that you have so that you can spend it on other things now that may be spending more time with family that may be spending more time on doing more important work or that will impact your clients and so on and so forth but I look at those numbers and it almost is like a spinning image of some of the clients that we've been working with and what you guys have done in regards to helping them out.

Shawn: And one thing Sia one more thing that probably motivated me to partner with you was the social objective that you attached to your business you always wanted about making more it's about where that money goes that's what you I remember I still remember you told me that in the first meeting that what we are trying to do here  is it's not just about helping them to make more money  also that where that money goes after making, it's just going to the retirement account we are not you know you told me that if just going to their retirement account I think we are not a partner for you but yeah if it is going doing something more meaningful, so I still remember that conversation and that's so important you know when we when we are doing and working it is very very important to have that with us.

Sia: Absolutely, and I remember the same conversation like it was yesterday and that's was one of the main reasons why I think we we just fit it so well together because ultimately and and I Really you know I go through a journey with with partners where they actually realize Shawn that it is really devaluing your full ability to make an impact when you just so zero in on this almighty dollar right because it is just we do everything just to serve it's like almost a god we serve right in that what can we do to make more of it, but when you shift your perspective and you realize okay I’ve got a duty a responsibility that goes beyond the performance of the firm but the performance of the firm will allow me to make a bigger impact in the world so there is a there is a objective here it shifts the way we look at the responsibility is no longer hey how can i make this better for me but it's look I got to be my best version of my business in order for me to be able to address the need that is out there and people who require our attention right that we may get nothing out of it but being able to be in a position to impact them, and that by the way includes people like your team, it includes your offshore team I want to mention two things Chris that are very near and dear in my heart and I wonder what your take is on this as well as Shawn's and that it you know for your onshore team when you give them things to do if you hire someone tomorrow and you want them to to whether in the accounting or tax or whatever you got to spend some time letting them know how a client likes their work to be done. how their bookkeeping they like it to look and feel and taste and smell and that same requirement that recovery doesn't go away because you're dealing with an offshore team and if you just spend a little this is where I see lacking a lot of times when people are like well I don't know if offshore thing is working and I asked a question, Do you provide feedback when you get to work? Do you train your team as to how the clients like things to be done? so that your offshore team understands those things you got to enable your team to set them up for success and that requires investing beyond just paying the paycheck just as you would with your onshore team. Chris what are your personal experiences with that when you talk to clients about these things? 

Chris: Yeah you know it's funny that you say that because there's a different mindset in the beginning and it caught me off guard when I was initially doing this years ago and for some reason they just think like they're robots or interchangeable parts or you know how what do I do and I was trying to figure out how to relay it out to the clients here and I said you just literally treat it like it's your own team member that's it and when I said that one sentence it was just mind-blowing they were like I just treated like my own team yeah what do you do now for an employee or I set up an email you set up an email for them oh okay and and then what else do you do next do you show that you set up their software login yeah that's it and then what you show them the next steps and how you like things that's it but literally when you just make it simplify it and realize that this is a long-term solution whether or not you know you hire full-time part-time this is a long-term solution to help complement your onshore team for better productivity and to continue to scale and grow whatever your plan is in place but literally that one sentence treat it like it's your own team member was just mind-blowing and it made it  and and we've had clients Larry tell me like hey Chris you said tree leg showing team member I'm flying my thirsty from india over for our team retreat and I'm like what? Awesome! you know they take it to a whole new level which is good to see.

Sia: Yeah that's great! Shawn what if for those who are listening who already have offshore teams and they're looking for ways to improve the experience for the team because the better experience your offshore team has the more well the more they will produce and the better what if you want to give them one or two advice what would it be in order for them to make a considerable change in the way they handled their offshore team. What would it be what would be your advice?

Shawn: So to I would again segment this in two pieces one is quantitative and second is qualitative. Okay the quantitative one is you need to sit back and see today half of the America has gone remote half of the America has completely remote so we we have been working remotely since long time but today america is and mostly most part of the world is forced to go remote so remote working is you know not just new normal it's something where we don't have to educate them now which we used to do before march so for unfortunately we are on the you know I mean we are having the tailwinds of this unfortunate situation of of growing so on thing I want to tell them is today if your employees working remotely from any part of America it is removed whether it is you know Mumbai or Miami so you need to identify what part of your firm can be offshore or can be removed. How many tasks if there are if you segregate about 150 tasks that are happening in your accounting firm how many of them whether 100-120-110 50-60 can be done by an offshore team that is the step one that's so go back to drawing board you know list of those tasks of your firm and take those stars that you know this can be done by my offshore team and that's where you gradually start scaling up from there I'm not saying that overnight you know transfer everything to your offspring no, but that gives you a little plan that you know these are 79 tasks that can be done by my offshore team right now what the are doing is 12 oh my god what about the rest 67 let's start with 10 every month and you know let them do this 10 tasks although it is little you know quality I mean quantitative as I said and we have recently kind of published an ebook Mike really wrote a very good ebook in which you know he said that 100 plus tasks which can be done by an offshore team maybe Chris you can put this up into the comment box if somebody wants to look at the book okay. 

And the second thing and I think we are running out of time but yeah second thing what I would say is the shift in the mindset that is that is needed so first is about you know how to do it

second is why? so well I was talking to one of my colleagues today and he's saying that some of the times people say you know I want to keep the jobs locally or you know sometimes they say that we are not used to offshore staffing sometimes they say that you know we have never tried this so or sometimes they say that this is just for our data entry needs nothing else and we are comfortable so in those situations the fundamental thing is we'll have to have a mindset change that is probably required where you are more open I mean in when we me and Chris kind of we're putting up our presentation together for the webinar we have one section what we call this this is our client and this is not our client we have clearly mentioned that anybody who has a track record of failure to implement or track record of not sharing or not opening up is not our client.

Sia: Having a change mindset or open mindset to for change to improve one quick comment I want to make is that what I've realized Shawn is that it is good idea not a good idea it's almost required to designate someone who would be responsible to make sure your offshore team has what they need in terms of they got the work and sometimes you have a way, sometimes you have a situation where multiple people on the firm is sending work but there's no one there to gauge how much of that capacity is being filled and sometimes it's short sometimes it's too much and it causes issues with turnaround time that we were talking about earlier so that would that would be one comment that I would make and the last thing I would say I don't know if if you are joining us for this facebook webinar we had to entice Shawn to join us at our at our event in November so if you guys are a big fan of Shawn like I am and you wanted to see him in action we're going to go into some of the details more in details than what we just talked about today November 12th&13th look that up and and I can't wait I can't wait for me to get in the audience and just watch Shawn do his thing but I just want to drop that out there for anyone. Well I  tell you what I think that one of the things that it's interesting you say andIi know we're going overtime but just bear with me I know you're there oh it's friday don't worry that's friday right the thing is that we just really in this this workshop conference we decided to do was meant not to be celebrity driven right this is about you meaning you the attendees and it's more about substance than hype and the reason why I like Shawn or I like other speakers we have Linda hamilton we have people presenting from from a hinge and from carbon but it is not so it's not the to attract people and play on the celebrity status to get people to show up but in instead we went deeper than that and we said okay what do we need to provide in order for attendees to leave the conference feeling like hey i got tangible things real solutions for real problems that I can apply immediately and we're doing things it that it has never done before and so i'm very excited but Shawn I think you discount your pull in the market but anyway I'm gonna leave it there. Chris I'm gonna give it back to you.

Shawn: Yeah you want to mention the dates and maybe we can put the link into the comment box. 

Sia: Sure the dates are November 12th&13th it's a virtual event and Friday yes and by the way we do have an early word special and the code is EB2020 for those of you who are listening please check us out at accountablefirms.com back to you. 

Shawn: Thank you everyone I think it was a good podcast and yeah accountable 2020 we are looking forward for the I mean to the conference being one of the partner in the conference thank you Sia for for the partnership and thank you Chris I think we we can sign off have a good weekend guys and have a good weekend of the of this live podcast thank you. 

Entigrity™ is a trusted offshore staffing partner to over 500+ accountants, CPAs and tax firms across the US and Canada. Our flexible and transparent hiring model gives helps firms of all sizes to hire staff for accounting, bookkeeping, tax preparation or any other task for 75% less cost. As a firm 'run by accountants, for the accountants', Entigrity captures the hiring needs of accounting firms most precisely, providing staff that works directly under your control and management, still you are left with least to worry about compliance, payroll taxes, overheads or any other benefits.