AI won’t kill offshoring; it will supercharge it
People often ask me if I fear that artificial intelligence will make the coast obsolete. It will not cause the beach to be damaged; he will charge it. The biggest challenges of the coast – time zones, cultural differences and communication barriers – are exactly what AI can help us solve.
Administrative Matters
For example, if your beach team has a question, they have to wait until the morning to get an answer because of the time zone difference. But with AI able to answer frequently asked questions and standard workflows, your offshore team can get answers instantly instead of waiting overnight. AI can also act as a custom filter for email, preventing miscommunication. Think of it as Grammarly for culture. For example, phrases like “you guys” may be offensive to most Americans, but it’s okay to say it in India.
Another example of cultural inconsistency is perception. American accountants are not always good about giving feedback to their teams, and overseas employees are often reluctant to ask for it. In their culture, doing so can indicate that a person is not smart or careless. Problems in the project can go on for a long time before either party realizes it. But AI tools can handle much of the checking and feedback loop.
Also, to American ears, Indian workers usually speak very quickly. Even when a job candidate speaks perfect English, I’ve seen interviewers in the US keep their heads down to be polite, even if they don’t follow through. Then they will pass on another great candidate because they could not understand them in the interview. However, AI can make interviewers slow down if they hear they are talking too fast.
Then there is email etiquette. Many developing countries like India and the Philippines have never had an email era. They went straight from paper to mobile. And there is a different etiquette for each station. Email is the best way to communicate. It replaced snail mail. But many developing countries have never had the opportunity to develop e-mail etiquette. Even middle-aged and older workers in these countries do not use e-mail. It’s all WhatsApp or iMessage.
If I email someone in India or the Philippines, they don’t take it as seriously as someone in America would. They often do not respond. If I want a proper answer, I have to send them a text – and they will answer. I still send job offers by email, but I follow up on texts to make sure they get them.
All these challenges associated with the coast can be solved by AI and make it more efficient.
New job positions
AI is also increasing performance on the type of work that can be done by offshore teams. AI makes tax preparation faster and more efficient while eliminating the need for humans to perform tedious, repetitive manual work such as the data entry part of preparation. AI is freeing offshore workers to do more tasks at lower levels of complexity, just as the workers are freeing up their American counterparts to do more complex tasks. Since tax preparation is becoming more and more efficient, foreign organizations can work more efficiently on preparation and reviews.
A top 100 US company told me that thanks to AI, its offshore team now has more time after the tax season to integrate customer information and flag opportunities than tax preparers – say, a customer who bought an asset or expanded their company from two to 20 employees – which the US tax partner uses for property management, recruitment or IT support services. These are examples of noble deeds.
AI-ready accountant
Companies tell me it’s easier to find AI-ready accounts offshore than in the U.S. Populations have grown in many developing countries and are becoming more tech-savvy. Moreover, their lives depend on its continuation.
As AI becomes more involved in the operations of accounting firms, you need people who already know how to work with AI, and how to give appropriate instructions and commands to AI. We will also need people who know the types of mistakes AI usually makes; people who will know what to review when AI gives you a job.
There’s a new type of job emerging: The AI job checker. AI may be almost perfect, but it’s not 100% perfect. We need experts who know how to review AI performance and correct errors. An untrained human can review the work, but carefully to preserve the effects of the AI.
AI also makes it easy to better instruct and create a library of instructional videos and books from Loom, Scribe and other tools. This library then trains new employees without using manpower. Yet another form of AI supercharging offshoring.
You can build scale models
Once you figure out how to get the most out of your favorite AI platform, you can reuse this prompt as a template. It saves time and gives you reliable results. With external teams, you can do the same. Once you figure out how to summarize them clearly, you can use the same commands for the same tasks. As you plan your process, everything runs smoothly.
As I discussed in another
But when the language barrier is removed, you will see prosperity go up a lot. So, there’s an AI voice platform called Krisp.AI that removes background noise and softens people’s accents to make them sound like they’re from the middle of America. (Disclaimer: The author does not receive any compensation or advertising consideration for the products or services mentioned in this article.)
When offshoring took off post-Covid, the conversation was about capacity. “I don’t have enough people. Get me people. I don’t care how much they spend.” Money was a bonus, not a driving force. But now when I present to accountants, we seem to spend more time on the table discussing costs or salaries. American companies are hesitant to talk openly about comp because they don’t want to be accused of shipping American jobs overseas. They try to serve customers well without raising prices. That’s what drives offshore, and when you add AI to the equation, the margin savings scale.
Part of the PE playbook
Offshoring is a big part of the PE playbook as PEs like to back companies to reduce costs and increase profits. This allows these companies to offer more competitive prices or add value to their current prices. Companies that want to be independent often recognize the value of the ocean but hesitate to use it because of the real problems we discuss in this article – time zones, cultural barriers and communication issues. AI removes many of the issues associated with outsourcing so private companies can now try their hand offshore and better compete with PE-backed companies.
Earlier, I described a company that uses foreign workers to increase business during the slow period. Another example is companies using AI to do basic tax preparation. A company I know specializes in having their offshore people review. They couldn’t find enough reviewers in their American team. So now the American team is just rehearsing. The simplest reviews are done offshore, and tax preparation by AI along the coast.
The future is not “AI vs. offshoring;” “AI + offshoring.” The two combined companies will be competitive and profitable. AI will reduce the number of people needed to get the job done but will increase the value of work done by onshore and offshore teams. With more capacity installed at home and abroad, the company can accommodate more customers.
