At which point will off-shoring transactional finance activities become irrelevant for corporations in light of the new technologies available like ERP, AI, ML, Process Mining, OCR, etc.?

Question

Answer

Irrespective of the tools of automation, offshore transactional activities cannot be totally shrugged as large MNC make better decisions by having off shore finance center to manage the transactional work.

Answer

The relevance of offshoring transactional finance activities for corporations may not become entirely irrelevant due to the emergence of new technologies like ERP (Enterprise Resource Planning), AI (Artificial Intelligence), ML (Machine Learning), Process Mining, OCR (Optical Character Recognition), and other automation tools. These technologies can significantly increase the efficiency and accuracy of finance processes, but there are still these aspects that influence the need for offshoring:

1. Complexity of Finance Operations: Some corporations may have highly complex finance operations that require specialized knowledge and expertise. While automation can streamline many tasks, certain complex processes might still benefit from human involvement.

2. Compliance Requirements with regulations: Finance operations often deal with sensitive financial data and are subject to various regulations. Off-shoring might be necessary to comply with specific local laws and data privacy regulations.

3.. Cost Considerations: Off-shoring can still be financially beneficial for some corporations, depending on factors like labor costs in the home country, tax incentives, and the scale of finance operations despite the existence of technological tools and applications.

While technology has transformed finance operations, the complete elimination of off shoring may not be feasible or practical for all corporations. Instead, a combination of technology adoption, process optimization, and strategic offshoring may be the most viable approach.

Answer

Depends on what type of activity you're off-shoring.

If it's an outsourcing exercise, whereby you're looking to use people to automate repetitive processes, then my prediction is this will become irrelevant in the next 304 years.

If it's specific domain expertise for overseas compliance, like tax, government submissions etc, then my feeling is there'll always be a requirement for domain expertise in the region you're trading in.

Does this make sense?

At which point will off-shoring transactional finance activities become irrelevant for corporations in light of the new technologies available like ERP, AI, ML, Process Mining, OCR, etc.?

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