NISREEN REHMANJEE AND JEHAN PERINPANAYAGAM DISCUSS THE CHALLENGES THEY FACE IN THE BPO INDUSTRY, THE MODERN ROLE OF ACCOUNTING AND CHANGING THE WORLD FOR THE BETTER
Nisreen Rehmanjee is Vice President and Group Head of Tax of John Keells Group (JK Group), Sri Lankaâ€™s largest listed company on the Colombo Stock Exchange with business interests in leisure, transportation, real estate, port and marine fuel services, IT, financial services, consumer foods, and banking, where she has spent the past decade. She was previously at KPMG, where she served as tax director. In her role as head of tax, she supports various industry segments by looking into strategic tax management within the existing tax framework, responding to ever-changing tax laws, and working with business associations and tax forums to highlight changes that are not in the best interest of businesses and suggesting ways forward.
Jehan Perinpanayagam is CEO of InfoMate Pvt Limited, a fully owned subsidiary of John Keells Holdings that provides outsourced accounting, payroll and data entry services. The first shared services centre in the country, it has over 140 indirect and direct staff, and specialises in payroll services and SAP-based accounting services including accounts payable, bank reconciliations, and general ledger maintenance, as well as more knowledge-intensive processes like balance sheet schedules and expense analysis. InfoMate has clients across Sri Lanka, India, the Maldives, Australia, Thailand and Norway. In addition to its main facility in Colombo, InfoMate operates three rural BPO centres in Mahavilachchiya, Seenigama and Jaffna through its unique rural BPO partnership model.
The BPO industry has huge potential in Sri Lanka. There has been encouraging progress in the past few years. Large organisations like HSBC and Accenture have come in. Even the budget had a few paragraphs about it. There is also more everyday awareness that the industry is more than just call centres. As Sri Lankaâ€™s first shared services organisation, what have been the challenges over the past 11 years?
Perinpanayagam: Acquiring overseas clients is a significant challenge. Creating awareness about Sri Lanka, building trust and confidence, and convincing a client to select a service provider in Sri Lanka, as opposed to India or the Philippines, takes time and effort. International marketing can be costly. I must mention that ACCA has proactively partnered with the IT/BPO industry association SLASSCOM to promote and build capacity for this industry. In fact, ACCA sponsored the very first finance and accounting outsourcing research report, which gave the countryâ€™s FAO industry a lot of exposure. Acquiring good talent for specialist positions like team leaders, quality and Six Sigma is also a challenge. In general, Sri Lankaâ€™s accountants are very talented, with great technical skills, however, some areas need improvement including soft skills, communication and projecting confidence.
Rehmanjee: I guess there is still that perception, although changing, that outsourcing is only about back-office repetitive work. Although we do have a lot of accounting students and qualified accountants on the ground, not many want to get into the industry as a first choice. That there are opportunities to progress to more value-added analytical work is not that well known. In fact, itâ€™s very similar to a chartered accounting firm â€“ at the beginning, it could be basic repetitive transactions, but you always have opportunities to move beyond that.
Perinpanayagam: We have launched a number of initiatives to acquire talent. We have our finance apprentice programme, which aims to attract the best accounting talent and take them through a three-year structured programme. We had 500 applications for the last intake. This has been very successful in building a pipeline of talent, and we are delighted that all eight of the first batch of apprentices have been absorbed into John Keells Group of Companies.
Weâ€™ve also been successful in addressing the capacity challenge in a revolutionary new way. We realised earlier on that Colombo alone will not be able to fulfil the capacity required for large-scale BPO work, so we have created a model where we train rural youth, provide the connectivity and the work, and they process transactions. This is a case study in the industry and a model for future large-scale expansion of BPO services. Weâ€™ve found it a real win-win. The youth there are really talented. In turn, the exposure the youth get is phenomenal because they work on multiple worldclass systems like SAP and are exposed to best-in-class processes for multiple companies in diverse industries. A lot of them go on to secure very good jobs both in government and the private sector, and three have been absorbed to JKH Group.
â€œAs for tax administration, there is room for improvement in that they need to work harder towards getting more taxpayers into the system rather than trying to collect more taxes from those already within.â€
Rehmanjee: Itâ€™s a very sustainable model. Moving processes outside Colombo provides an environment that allows our teams to work from closer to home and family rather than moving to Colombo â€“ saving additional costs and inconveniences associated with such a move. Obviously, it also supports rural development by taking the jobs to the people.
Perinpanayagam: Getting clients to buy in, and convincing them that the work will be done correctly and on time, is a challenge, as is making sure we deliver on our demanding SLAS. Lots of companies close books now on the first of the month, which is phenomenal. There are also cost efficiencies: Sri Lankan companies donâ€™t have the luxury of an arbitrage when serving other Sri Lankan companies, but weâ€™ve been able to hold our prices over the past seven years despite inflation. Weâ€™ve introduced a lot of automation, the potential of SAP has been optimised, and weâ€™ve been able to bring about standardisation across multiple companies. InfoMate has also developed a key pipeline of talent for the finance function of John Keells Group. Our vision is to have â€œour staff in key positions in JKH Group, our centres across Sri Lanka and clients across the globeâ€.
Tax is a hot topic at the moment, with poor tax revenues and issues of tax administration in the news. As a longstanding tax professional, what are your thoughts?
Rehmanjee: There is no debate that our tax base has to be expanded, and everyone needs to pay their fair share of taxes. We currently have too many exemptions and concessions in our various fiscal laws. Yes, there are strategic industries that may need some incentives to get investors in or to make it viable, but these need to have a more direct linkage to the ultimate goal to be achieved such as capital investment or employment generation. For example, I would look more towards giving credit against taxes payable, and allowing for double deduction for investments rather than providing blanket exemption to profits for an X number of years. This way, there is a direct link between the investment and the quantum of benefit. As for tax administration, yes, there is room for improvement in that they need to work harder towards getting more tax payers into the system rather than trying to collect more taxes from those already within. Having said that, it does not take away our individual responsibility to pay our taxes correctly. In Sri Lanka, we have a self-assessment system: you are required to declare your income and pay taxes accordingly. Why do we need someone to come and tell us that we need to be responsible citizens of the country? Looking at the region, we donâ€™t have a very high tax rate. Employees pay a maximum of 16%, individuals a maximum of 24% and most corporates are at 28% maximum, with a proposal to reduce it to 17.5%.
Sometimes, those who donâ€™t pay excuse themselves by saying they donâ€™t feel the money would be spent intelligently. For me, I see paying taxes as my responsibility to my country, and along with it comes the responsibility to influence change if I feel the system needs fixing â€“ every small effort counts.
The role of an accountant is perceived as boring â€“ relegated to an office and crunching numbers all day, and with limited room for advancement. Yet, as two qualified accountants, youâ€™ve reached the top rungs of a high ladder at a relatively young age and the work you do is exciting, modern and strategic.
Rehmanjee: The accountantâ€™s role has changed quite significantly from being the gatekeeper to now being the enabler.
â€œACCA has proactively partnered with the IT/BPO industry association SLASSCOM to promote and build capacity for the industry. ACCA sees this as a strategic growth initiative for the countryâ€
Perinpanayagam: Today, itâ€™s completely different from the traditional view of an accountantâ€™s role. Accountants donâ€™t just do the numbers as a postmortem. Now, accountants actually drive decisions. It can be as exciting as you want to make it. The accountant today is a key contributor and facilitator to our decision-making process, from everything involving strategy and annual plans, pricing and new project evaluations, to evaluating different operating models. And because you have the financial skills that are essential, it both facilitates and supplements whatever role you may take on.
Rehmanjee: Accountants generally have a very analytical mindset. Earlier, it was seen solely as the capacity to number crunch. Now, it is acknowledged as the ability to understand situations in-depth and ensure that all aspects are covered. When taking any decision, the finance person can provide strategic input by looking at a situation from a full 360-degree angle. For example, during my secondment in India (as Head of Corporate Functions â€“ John Keells BPO Solutions India), I was responsible for facilities management, governance, risk and compliance, and supported the finance team. When business exigencies demanded, I was required to assist in areas such as HR and talent acquisition. I believe I was able to manage whatever came my way because an accounting qualification gives you that grounding and discipline to first understand and then act. You are never a surface-level responder.
Perinpanayagam: Iâ€™ve found that ACCA is a holistic syllabus that covers every area of business, not just accounting. Owing to this, Iâ€™ve found that, whether you are at a legal meeting, an IT meeting, a marketing meeting or in any forum, you are never at a loss to understand and are able to contribute meaningfully.
Rehmanjee: I totally agree. You may not be an expert in everything, but you will understand enough to contribute and add value to the conversation. For a finance person to be a CEO is no great leap. Most finance people with exposure â€“ thereâ€™s no need to educate them further, just give them the exposure â€“ will make good CEOs. Iâ€™ve always believed that although the heart of any organisation is the HR function, the value systems are driven by finance. And if you want to change the world for the better â€“ thatâ€™s the place to be.
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