Cost saving - clever software or cut price staff?
Jinfo Blog

By Tim Buckley Owen

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Arch rivals Thomson Reuters and LexisNexis have been playing leapfrog with workflow solutions based on their core content for a couple of years now. The game continues – but a new report from Ovum could introduce a further spur to their continuing innovation: fear of offshoring.

LiveWire’s Penny Crossland reported only recently on Thomson Reuters’ new compliance package Accelus, commenting that it would be a strong competitor to LexisNexis’s Compliance Manager and Wolters Kluwer’s Financial & Compliance Services. But even since then, there’s been no let up in the pace of innovation.

Life insurance policy underwriting can take so long that many applicants aren’t prepared to wait – so LexisNexis’s Current Carrier Life database provides information that allows insurance companies to define the risk profiles of people they plan to insure. Meanwhile, with studies suggesting that almost two thirds of applications received are incomplete or in poor order, LN’s Electronic Inspection Report provides almost instant bundled reports from public records databases.

Thomson Reuters has recently enhanced its Elite professional services management solution with the release of ProLaw XII to further help automate legal business management – offering new real time reporting capabilities, integrated with Microsoft applications like Excel and Outlook. TR is also extending a helping hand to baby accountants with bundled subscription packages that offer small- and medium-sized accounting firms and sole practitioners a full range of Checkpoint Learning course formats, including tools to automatically track certification requirements from 100 US regulators.

Cost saving is a key benefit these new products promise; LexisNexis speaks of “significant savings and higher margins” from its Electronic Inspection Reports, while Thomson Reuters claims greater cost-effectiveness from its bundled certification subscription packages. Their pitches could be spot on, because the other big source of cost-saving in finance and accountancy – offshoring – is facing an uncertain future.

According to a survey by Ovum, bosses at big United Kingdom and United States companies see offshoring their finance and accounting activities as higher risk than entrusting them to the cloud. Whether that will change as a result of recent cloud debacles remains to be seen – but for now just 29% of respondents view cloud computing as posing an unacceptable risk, compared to 38.5% for offshoring to India and 44.2% to South and Central America.

Trading cost savings for quality seems to be one of the biggest problems, the report says. India, for example, produces some of the lowest priced accounting staff in the world – but it also ranked lowest on satisfaction rates.

And there’s a hint of good news for apprehensive onshore employees too. Mindful, perhaps, that skill shortages can manifest themselves pretty quickly if they let people go, 44% of respondents eschewed offshoring out of loyalty to in-house staff.

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