The Impact of Offshoring Finance and Accounting on Telstra

This report investigates the practice of offshoring finance and accounting services, specifically within the telecommunications sector, using Telstra Corporation Limited as a case study. It examines the motivations behind offshoring, such as cost reduction and access to skilled labor, and analyzes the impact of this trend on accounting professionals. The report includes a literature review exploring the advantages and disadvantages of offshoring, including reduced overhead costs, improved service quality, and potential risks like confidentiality concerns. A brief methodology is outlined, including the use of a descriptive research design and thematic analysis. The report presents data analysis from a survey of 25 individuals, highlighting the importance of outsourcing accounting and financial services. The conclusion assesses the impact of offshoring on accounting professionals, and the implications of this trend for the telecommunications industry.

Why finance and accounting
activities offshore overseas
and how does this impact on
accounting

Table of Contents
Introduction......................................................................................................................................1
Statement of problem.......................................................................................................................1
Aims and Objectives........................................................................................................................2
Aims.......................................................................................................................................2
Objectives:..............................................................................................................................2
Questions:...............................................................................................................................2
A Brief Methodology.......................................................................................................................4
Justification and potential output of research project......................................................................5
Data analysis...........................................................................................................................5
Conceptual framework...................................................................................................................13
Project budget and schedule...........................................................................................................14
REFERENCES..............................................................................................................................16
APPENDIX....................................................................................................................................18

Introduction
The Sydney Morning Herald paper (Stewart, 2009) found that many accountants in
Australia offshore a large proportion of operations of their company to Asian countries such as
India and the Philippines, as their labour costs are a lot lower than the local ones. Offshoring also
saves employers’ superannuation, annual leave, maternity leave and worker’s compensation. The
offshoring of finance and accounting enhances human resource functions and is continuously
rising around the world (Schniederjans, 2015).
According to the Australian Sydney Morning Herald Australian, the largest Australian
telecommunication company, Telstra could move up to the 1000 jobs overseas to the Philippines
and India as of 2014 (Ramil and Smith, 2014). Mohapatra (2015) notes that in
telecommunication industries and other business firms offshoring means to get their work done
by organizations that are not connected with the main company. With the help of Finance and
accounting offshoring telecommunication companies accomplish their work right on time and
are able to maintaining a low budget and error. Oshri (2015) describes that it is the easiest way
to understand a project. The work can be done with the help of specialist firms. Offshoring
finance and accounting provides huge benefits to the organization and it also gets required
quality of work and a financial report from those offshoring firms (Owens, 2014).
Aims and objectives as well as a brief methodology for the research of offshoring in
finance and accounting in telecommunication areas have been provided. The purpose of this
research is to investigate the phenomenon in Telstra Corporation Limited.
Statement of problem
In this report all the aspects in respect of offshoring will be considered. All the Australian
companies are providing there work to other countries and by that various affects are made on
them . The accounting is affected by this so it is needed that study shall be carried out by which
it will be identified that whether it is good or bad for any organisation. The overall impact of it
will be seen on labour cost, quality of activities and also in knowledge and skills of accounting
professionals. The problem in this is to choose the best person who will be able to perform the
task with full potential and in best manner. Also decision is affected by the price which they are
charging for getting the work completed. The another issue in this is to identify whether the other
person will be able to complete the work in appropriate time or not. So all of these are some of
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the issues which are to be dealt by in proper manner to make the process a success and achieve
all objectives of business.
Aims and Objectives
Aims
The aims of this research are to identify the reason why in the last debate many
telecommunication companies like Telstra Corporation Limited are offshoring finance and
accounting services and using back office jobs and the benefits of such business strategy. It was
also be identified that how these activities will be affecting the accounting of any organisation.
Objectives:
 To establish the fact that Telstra Corporation Limited offshore overseas the activities
which are related to finance and accounting;
 To study the need for offshoring finance and accounting for a telecommunication
company;
 To investigate the benefits of offshoring finance and accounting in the
telecommunications industry, and
 To understand the trends of companies that offshore business in the global market and
then drawing the conclusions from it in this respect.
Questions:
1. First will be to know why is the offshoring process adopted by the organisations in resect
of financial and accounting activities?
2. Why are these services increasing in the whole economy?
3. What will be the impact of these activities on accounting profession. Will it be affected in
favourable or adverse manner?
4. How can it be considered by the company to achieve maximum advantages?
The Literature Review
It will analyse the reason why offshoring finance and accounting is increasing in the
telecommunication industries and present facts that help to understand the pros and cons related
to this sector. Secondary data will be comprise various internet sources, journals, books, Google
Scholar and other third party sources that provide relevant information on the subject.
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According to Blaskovich and Mintchik (2011) the offshoring activities are being
adopted on large scale by Australian accounting companies and there are various reasons due to
which it is undertaken by them and is increasing. The main factor is cost which will attract all as
it leads to saving of cost. By the use of this the cost of overheads is reduced and also benefits are
received. Then next comes the technology which means that as advanced technology will be
used by others so this will lead to increase in productivity and processes will be improved. By
the help of them electronic system will be used for payments and receipts. This will make the
work easier and so it is used by more and more people. Also the quality of services is improved
as activities will be performed by skilled persons so they will be using all the best techniques and
this way risk will be reduced. All the operations will be tracked and then measures will be taken
to improve the efficiency. The another factor is that by using then trained staff will be available
which otherwise would not have been possible if all the work has been performed in house. The
problems of labour shortage will be dealt in appropriate manner by help of outsourcing. So due
to all these reasons it is adopted by companies and is also improving.
As per the views of Brandau and Hoffjan (2010) there are many advantages and
disadvantages which are associated with the use of offshoring and they needs to be analysed as
then only proper decisions can be made by all which will be in overall interest of business and
economy as whole. The main pros of this service is that less number of employees will be
required to be hired as work will be performed by others and the need to make payment will not
have to be faced and this will decrease the amount of expenditures to be made. All the work will
be managed by firms and it will be delivered to clients on timely basis so this will help in
developing good image (Shared Services & Outsourcing, 2017). Quality will also be maintained
as skilled professionals are hired by those firms and they are known to work with full efficiency.
In this all aspects such as bookkeeping, payroll, taxation will be considered and as time is saved
so it can be used to carry out some other functions which will yield additional earnings to
business.
In addition to them there are some cons also which are related to this service and it
includes that confidentiality will be lost as all information will be provided to outside parties so
decision in relation to it shall be taken after considering all the aspects. It shall be identified that
the firm with whom dealings are made should be capable to satisfy customers. There are chances
that some services are not provided or given in addition and this will lead to unnecessary costs.
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It has been stated by Lewin and Volberda (2011) that the impact will be there on
accounting professionals of this offshoring service. New job opportunities will be developed by
this so they will have chances to grow and achieve benefits from it. Also there skills are
enhanced by this and they will be getting more work.
A Brief Methodology
Research methodology creates a structure for conducting surveys and gathering
information about offshoring finance and accounting in the telecommunications industry. In this
research, a descriptive design has been used as this will help to analyse the reason why
offshoring finance and accounting is increasing in the telecommunication industries (Borman,
2017). After this approach will be selected which has been taken to be inductive as this will help
in development of various theories. There are two philosophies which can be used in any
research project. Under the given case interpretivism will be used as by this impact will be
analysed on professionals.
The information that is needed can be attained with the help of two methods and they
are primary and secondary. For this purpose questionnaire in main tool that can be undertaken in
which a set of questions will be provided to various respondents (Thakur, 2010). Other then this
journals, books and internet. It is not always possible that survey can be carried out by taking
whole population under consideration and due to this reason the technique which can be used by
organisation is sampling. In this a sample will be selected by researcher from whom information
is extracted.
The last part which is to be done is analysis of data and for that techniques to be used is
qualitative. Under this various options are available from which the one that is to be used in this
research is thematic analysis in which formation of themes will be done and then graphs will be
made on basis of them. Therefore this can be used for interpretation.
Data series and Surveys: Data collected from a survey are qualitative. Primary data
was gathered from managers as well as from different departments of Telstra Corporation
Limited (Sydor, 2011). Primary data are the most important data for research data analysis, as
they are raw and unhampered (Flick, 2013). For this questionnaire has been made by which
views of different persons will be identified and the same has been provided in Appendix below.
Data Analysis: After the collection of data is done then it will be required that its
analysis shall be carried out. In order to develop proper outcomes, it will be needed that proper
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means of data analysis shall be adopted. In this case qualitative technique is used to complete the
analysis.
Justification and potential output of research project
The main factors that will be considered in this project will be including the analysation
of risk which is involved in this process (Lyubimov, Arnold and Sutton, 2012). There are various
risks which will be faced as the system is new and also professionals will also have to bear its
impact as there work will be affected due to this. Then how can this be avoided or reduced with
the use of various techniques. Control will have to be established in this regard so that mitigation
of risk can be achieved. All the difficulties which are faced in this process will be identified and
then measures for this will be involved (Nicholson and Aman, 2012). The outcome of this
research will be that impact that is made on accounting professionals will be identified and it will
be known that whether the offshoring shall be used by companies in telecommunication sector or
not. Various findings will be achieved which include that such activities are increasing at great
speed in India and other countries. All of the other outcomes can be understood in better manner
with the help of analysis that is provided below.
Data analysis
A survey is conducted in which sample size is taken to be 25 persons and then their
responses have been obtained (Peslak, 2011). An evaluation of them is to be done so that proper
outcomes can be made and further decisions in this regard can be taken. They are represented
here under in appropriate manner.
Theme 1: Outsourcing of Accounting and financial services is important.
Is it important to outsource accounting and
financial services?
Frequency
Yes 18
No 7
5

Yes No
0
2
4
6
8
10
12
14
16
18
20 18
7
Frequency
Interpretation: From the above graph it has been determined that out of total sample of
25 people 18 are in favour of it that outsourcing shall be carried out by the businesses and
remaining 7 are against it and does not think that offshoring shall be used by all the businesses. It
can be said that it is very much necessary that accounting and financial services shall be
outsourced as by this work will be delegated and also additional efficiency will be attained.
Theme 2: Development has been made in skills of Accounting professionals.
Are the skills of Accounting professionals
developed by the services?
Frequency
Yes 20
No 5
6

Yes No
0
5
10
15
20
25
20
5
Frequency
Interpretation: It has been found that 20 people which represents 80 percent, are in
agreement with the fact that skills of professionals are being enhanced by using it. Only 20
percent are saying that no development has taken place in terms of knowledge and skills. This is
because different kind of work is performed and this helps them to improve their level of
understanding. All of this is beneficial for them on personal basis also.
Theme 3: Economy is affected in Favourable manner by such services.
In what manner does it affects the entire
economy?
Frequency
Adverse 4
Favourable 21
7

Adverse Favourable
0
5
10
15
20
25
4
21
Frequency
Interpretation: It can be interpreted from the above provided graph that 21 people says
that the services which are undertaken will be favourable for whole economy and it is receiving
various advantages from it. Other 4 are of the view that there will be adverse impact which is to
be borne by economy. As the industry will be growing so economy will also experience growth.
Theme 4: Financial problems are identified with the help of them.
Does it provides help in identification of
financial problems?
Frequency
Yes 15
No 10
8

Yes No
0
2
4
6
8
10
12
14
16 15
10
Frequency
Interpretation: All the financial problems which are faced by companies will be
identified by using the following services and this has been accepted by 15 respondents. From
the point of view of other 10 it will not be possible and so according to them it is not beneficial
in this regard. By the identification of issues it will be possible to for the company to take certain
steps with the use of which they will be eliminated or reduced. This will prove to be highly
beneficial as time and money wasted in such problems will be saved which can then be used for
other purposes.
Theme 5: Time saving is achieved by Offshoring of services.
Do you agree that time is saved by using
such services?
Frequency
Strongly Agree 14
Agree 8
Disagree 3
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