McGladrey has sold its captive accounting unit for $50 million to an India BPO.
McGladrey’s some $18 million in billings and its 600 or so staffers, including 200 in the U.S., are joining buyer Quattro BPO Solutions, bringing Quattro’s headcount to about 2,000, according to the Economic Times in New Delhi.
The Indian BPO company will also get McGladrey’s accounting technology platform and top leadership. Cesar Soranio, head of the finance process outsourcing unit of RSM McGladery, will now head Quatrro’s “finance and accounts” practice. This acquisition gives Quatrro the distinct advantage of offering accounting services to the mid-market segment. The only other player globally in the space, Savista, was earlier acquired by Accenture, according to the Economic Times report posted on the Quattro site.
“It’s a structured transaction and will help Indian outsourcing become more dominant in the mid-market segment. We will merge our technology platform with RSM McGladrey’s and offer both technology and services to our clients,’’ said Quattro founder Raman Roy, who is considered “the father of the Indian BPO industry.”
RSM McGladrey’s captive accounting unit caters to accounting, tax, consulting requirements of the mid-market segments which includes law firms, hospitality players, food chains, auto ancilliaries, stores, NGOs and others. Quatrro, plans to grow the 200 people RSM Gladrey team in the US, rather than shift some of the operations to India. “We plan to grow the business significantly and there is no move to reduce the numbers in the US,’’ said Roy.
The market for midsized BPO service offerings stands at about $20 billion and should grow to more than $25 billion by 2009.
“Once we have access to the over 2,000 customers of RSM McGladery we will leverage the relationship to offer other services like legal, market research, technology and publishing,” said Quattro executive VP Srinivas R. Pingali.
2 Responses to “RSM McGladrey Sells BPO Unit”
BPO
Outsourcing is an exceptional way to capitalize in on your core concerns in today’s business world. :d With the ever growing unsuitability of our economy. :o One must come to the conclusion and determine if business process outsourcing is for their business or not. :-?
What if it was your only option? The banks have been given a financial bailout, however what about the rest of the suffering business economy in general? Literally a year worth of downward upside down stock portfolio’s. Trillions of $$ Dollars were lost and sure not a result of outsourcing.
I think we need to diversify ourselves and become pioneers of the future together rather than continuing to be adverse!
James Zachman
Thanks Rick – this is interesting. A recent study showed that there are now over 300,000 accounting jobs available in the market. I think the trend will continue in the adoption of use of outsourced labor (India or elsewhere) The key to success is offering the “right type” of business structure to offer these types of services.
The most viable model (in my opinion) is to establish Joint Venture relationships – also called “Shared Services” entities – with accounting firms so they have a high level of ownership and control of their offshore operations. RTDS recently de-coupled our accounting back office operations under http://www.accountantsbackoffice.com as a seperate business unit which will allow us more flexibility in creating Shared Service relationships going forward. This model allows RTDS to provide the offshore infrasturcture and management with the accounting firm taking responsibility for staff training, QA and oversight to insure compliance related objectives are being met.
Below is some current information regarding the use of Outsourcing per IRS Reg. 7216 that is interesting:
Updated IRS Regulation 7216 – Impact on Outsourcing
The IRS has issued updated regulations that were effective January 7, 2008 and apply to disclosures or uses of tax return information occurring on or after January 1, 2009. The regulations finalize rules for taxpayers to consent to the disclosure or use of their tax return information by tax return preparers. Foreign outsourcing is not prohibited by the final regulations, which permit the disclosure of tax return information outside of the United States if the taxpayer consents to such disclosure.