Case Study: Relocating and Centralizing an Entire Finance Division in Canada
Our client is a leader in packaging who manufactured a range of packaging products for the beauty industry. Prior to joining us, they grew through a series of acquisitions to carve out a business for them. This model of acquisition for scaling left the client with unstandardized key financing function that couldn’t scale. We helped them by creating a business model that centralized key office activities in Canada, achieving a cost reduction of about 45%.
About The Project
Our client is a global leader in manufacturing and wholesaling of packaging solution for the beauty industry. They manufactured packaging for mascara, lipsticks, applicators, lotions pumps. They sold their packaging solutions to the established longstanding players in the cosmetic business as well as independent labels started by popular YouTubers.
Our client expanded through a series of acquisitions before engaging in business with Shorewise. More often than not, the procured entity transitioned from a shared service that complemented the business of our client to a manufacturing unit during the acquisition phase. This resulted in an expensive, fractured, and inefficient administrative office for Finances. The client operated through a myriad of ERPs and functioned on unstandardized key Finance functions that made it impossible for them to scale up.
The client considered outsourcing the Finance division of the office to an Asian host however, the logistics of an entirely different time zone when compared to their North American operations and the inefficient nature of traveling to-and-fro the two continents, combined with a considerable lack of fluent English speakers sent them back to the drawing board.
The client had set a target of 40% reduction in the cost to support the offices. The client also gave ShoreWise a schedule of approximately a year to establish a nearshore office with sufficient ROI.
Shorewise’s first task was to determine if there was business potential in nearshoring the operations to Canada. A Finance Transformation Team compared the cost and logistics of running an office in Canada against the current administration, while also comparing both with industry benchmarks.
The team ended up drawing a business model that aimed to centralize back-office functioning for all the manufacturing plants located in the North American region. In essence, the model scrapped the previous decentralized structure of the local office in favor of an efficient central back office that specialized in finances.
By capitalizing on the business model and an emigration approach designed by Shorewise, the client developed a centralized Finance and Accounting team for all the manufacturing units in North America while also achieving a cost reduction of 45% – all in just 4 months.
The nearshore BPO team that operated in Canada worked, in essence, as an extension to the client’s core team where it operated during the same time zone. The client’s team and the BPO team built on the model developed by Shorewise ensured collaboration and cohesiveness through their routine business trips, which were made easier through the fact that the USA and Canada were neighbors and shared strong political ties with each other.