Outsourcing Journal

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Home Markets and locations Internal service provider business – KPMG Jamaica

[vc_row][vc_column][vc_column_text]By R. Tarun Handa, Managing Partner at KPMG in Jamaica – KPMG Jamaica’s Journey
to Develop its Shared Services Practice – Opportunity Out of Adversity.

Without a doubt, being one of the ‘Big Four’ accounting firms has its benefits. However, being located in a country with a population of less than three million people means that eventually, the scope for growth becomes limited. That was the challenge facing KPMG Jamaica in the early 2010s. KPMG is a recognised and respected firm, whose business and client base was mainly Jamaican. Unlike other jurisdictions in and around the Caribbean region, such as the Cayman Islands and Bermuda, where most of the business supporting
those firms is offshore, 10 years ago, KPMG Jamaica had referred-in business comprising less than a fifth of its total revenues, which inherently left the organisation exposed to a vulnerable national economy, with limited options to diversify risk.

Opportunities Out of Challenge

The journey to diversify KPMG Jamaica’s operations started in 2013 and began with us initially seeking to engage KPMG India to support a ‘sunset/sunrise’ outsourcing solution for larger English-speaking firms so, when the India offices were closed, we (in Jamaica) would attend to the work that that office needed to be completed. However, the Indian firm did not believe that we would be able to provide the necessary scale and opted not to pursue the collaboration proposed.

We also approached KPMG Cayman Islands and Bermuda seeking audit outsourcing opportunities for their buoyant off-shore sector clients. Through a contact in KPMG US Global Resource Leveraging, we approached KPMG in the US; again, as a small office, they did not believe we had the scale to outsource professional services and they were still in the process of clarifying their global offshoring strategy. With no track record in managing offshore work, there was little interest in what we had to offer.

At the same time, our Jamaica office had been losing staff to KPMG’s Cayman Islands Office as, whilst our salaries were competitive among the top accounting firms in Jamaica, they could not match those offered by the Cayman Islands. We, again, approached the KPMG Cayman Office and learnt that they needed audit support and were in fact, already using KPMG India.

We came to an agreement with the Cayman Office in 2014 for some of their additional work to be outsourced to us in Jamaica, and we established a pilot initially comprising a 12 person audit unit specializing in alternative investments, in Montego Bay, to execute the work. The pilot was successful, and the arrangement with KPMG Cayman, together with KPMG Bermuda, who have since joined, has expanded to a 25-person unit today. That unit is further set to expand to 40, as we add the appropriate management and quality controls, something we have learnt from working with our US colleagues, as follows hereafter.

Getting a Foot in the Door and Making it Work Using the success of our Montego Bay pilot we again approached KPMG US in March 2015. There was evidence of what we could do, and the success and benefits of nearshoring and wage-arbitrage that had been demonstrated. This time, US management was more amenable and they brought out the full array of potentially interested parties – Audit, Tax, Advisory, and interestingly, Business Process Support (BPG). Unknowingly, we had stirred a responsive interest in the US firm’s controller, who had been having issues with his other offshore locations. Through his interest, we were awarded a site visit in March 2016, where the full array of BPG interests, as well as KPMG’s own Global Location Services group, kicked off a due diligence exercise.

For that visit, we pulled out all the stops. In addition to the internal talks that needed to be held, we lined up meetings with external facilitators, including the Jamaica Promotions Corporation (JAMPRO), educational institutions, government ministries and internal partners. We were even able to show them identified office space that could be readied in three months, if our office got the business. We demonstrated that we were ready, we had the requisite support, the necessary external contacts, along with the team in place, to deliver – if given the opportunity – demonstrating that Jamaica Inc. can work! In June of that year, we got the green light for a one-year pilot. The focus would be payroll, human resource processing and account management services for the 35,000-plus KPMG US firm.

Suffice it to say, we batted it out of the park by March 2017, but we experienced some telecoms infrastructure-related challenges at the time, which were eventually corrected. Notwithstanding, our performance was strong enough for more permanent arrangements to be initiated, and for the scope of engagement to also expand from payroll to other finance support workstreams. In November 2018, we opened a second location to house our rapidly expanding nearshore business, which today stands at 250 FTEs (full-time equivalents) providing a full range of services including finance; administration; human resource; market research; proposal and account management support; and procurement.

Our newest pilots in contract management and risk management promise to further enhance our overall value proposition and support the decision to add a third location in July 2020.

KPMG Jamaica Now and Future Prospects Today, KPMG Jamaica is in a much better position than it was 10 years ago. We expect that by 2022, our internal outsourcing business will exceed a third of our total revenues and the staff complement will exceed more than 50% of KPMG in Jamaica. A strong cultural intervention in 2019 and additional management support has strengthened the business’ service delivery capability.

The COVID-19 pandemic has demonstrated the resilience of our model: We implemented Work From Home (WFH) and elevated physical distancing and sanitation protocols, well in advance of the geographic and sectoral lock-downs that were ordered by the Government of Jamaica. As a result, we worked closely with our US firm to support its WFH strategy and supported it in accounting closings, when key off-shore support centres elsewhere were not able to do so in the face of their own geographic lock-downs and where WFH was not viable.

We have not missed a beat in transitioning to WFH, and our team has been agile and responsive to the dynamic situation that continues to evolve. We have even been experiencing higher productivity in some areas from the staff working from home, which opens up a broad range of options as to how we structure our organization in the future, along with opportunities to secure more business from our US firm and the wider KPMG network beyond the pandemic. Further, the Jamaican government’s measured response to the pandemic, which emphasized contact tracing and containment, whilst keeping the economy open with physical distancing prescriptions has been favorably received; and we anticipate that this will enhance our nearshoring value proposition significantly. In this regard, KPMG in Jamaica continues to influence the government’s policy prescriptions for office work post-pandemic and seeks to meet or exceed the anticipated standards.


This article was first published in the Outsourcing Destination Guide Caribbean’s, which is available for free download at: www.outsourcing-destinations.org[/vc_column_text][vc_empty_space height=”70px”][vc_separator][vc_row_inner][vc_column_inner width=”2/3″][vc_empty_space height=”70px”][vc_column_text]The author: R. Tarun Handa joined KPMG in Jamaica in 1987, became a Partner in 1993, KPMG CARICOM Integration Partner in 2004, KPMG CARICOM COO between 2008 and 2013 and became Managing Partner of KPMG in Jamaica since 2008. Along the way, he also served as Chairman of KPMG CARICOM (covering the Caribbean Community area) between 2013 and 2015. Tarun remains Managing Partner for KPMG in Jamaica, and he currently sits on the board of the KPMG Islands Group, which facilitates an interdisciplinary approach across the KPMG member firms in The Bahamas, Barbados, Bermuda, British Virgin Islands, Cayman Islands, the Eastern Caribbean states, Gibraltar, Guernsey, Isle of Man, Jamaica, Jersey, Malta, and Trinidad and Tobago. Tarun’s experience in Jamaica and the wider Caribbean includes leadership in several high profile audit as well as multi-disciplinary engagements spanning varied sectors: hospitality, financial services, manufacturing, mining, consumer products, utilities, high technology, telecommunications and gaming companies. He is familiar with all aspects of accounting for business combinations and stringent international reporting requirements involving US and UK Generally Accepted Accounting Principles. In addition to the audit, he has significant experience in tax-based restructuring, financial planning, valuations, company secretarial matters and transactions management. Tarun has led several growth initiatives within KPMG for the Jamaican and wider Caribbean firms and his recent leadership of successful near-shoring services initiatives whereby KPMG Jamaica now supports our Cayman, Bermuda and US operations demonstrates the focus he brings to executing on a strategic vision. Tarun is a Fellow member of the Institute of Chartered Accountants of Jamaica, the Institute of Chartered Accountants of India, and a member of the American Institute of Certified Professional Accountants (AICPA). He holds a Bachelor of Arts in Economics (Hons), and AICPA Business valuation certificate of educational achievement, along with certificates from the Duke University Program for Management Development, and has attended several KPMG courses relating to IFRS, audit updates and general management.”[/vc_column_text][/vc_column_inner][vc_column_inner width=”1/3″][vc_empty_space height=”70px”][vc_single_image image=”6469″ img_size=”medium”][/vc_column_inner][/vc_row_inner][vc_empty_space height=”64px”][vc_column_text]Photo by Alexander John on Unsplash[/vc_column_text][vc_empty_space height=”100px”][/vc_column][/vc_row]