Kiwi firm Orb360 enters Australian market via India model

A new operating model that pairs Kiwi accountants with counterparts in India is facilitating the expansion of one of New Zealand's largest accounting firms into the Australian market.

Jay Changlani, Chartered Accountant and Chief Executive Officer of Orb360, has announced plans for an acquisition-led entry into Australia, driven by a novel trans-national service model. This model, which segments roles so administrative tasks can be handed to Indian partners, has reportedly boosted efficiency by allowing work to continue overnight.

Changlani explained, "We have created a model for professional services firms where each of our New Zealand based accountants is paired with a counterpart in India that takes over from them at night to complete the work. Each accountant's role is dissected into three categories: Client-facing interactions, creative and intellectual property work or tasks that can be delegated. We have found the latter is the most time-consuming and presents the greatest barrier to expansion."

He further highlighted the business growth under this model: "This system allows our businesses to spread fixed costs across a larger client base and enable faster turnaround times which has increased our efficiency by up to 20%. We believe this approach could be adopted by other NZ professional services providers - particularly within a market where many accounting firms are at capacity and turning away new clients."

Orb360's team has expanded to 20 staff in New Zealand and approximately 10 to 15 staff in India, serving around 2,000 clients. "This model has seen our firm grow to 20 staff in New Zealand and 10-15 staff in India, serving approximately 2,000 clients. It has put us on track to be one of the top 10 accounting firms in New Zealand within five years and creates the capacity necessary to expand into markets like Australia," Changlani noted.

Changlani is also an executive board member of the India New Zealand Business Council, and he sees potential for this model beyond accounting, across a range of professional services including mortgage broking, immigration advisory, and legal practice.

The announcement comes amidst broader discussions between New Zealand and India regarding a possible Free Trade Agreement (FTA). Changlani suggested that their outsourcing model could contribute to these negotiations, highlighting the opportunity to address India's high unemployment rate of 8%, with around 20 million unemployed people.

"There are around 20 million unemployed people in India's labour force of 580 million. Their unemployment rate has averaged 8% over the past six years. With labour utilisation a key issue for India, there is a significant opportunity to look at how we can create mutually beneficial growth opportunities for both nations," he stated.

Changlani identified challenges previously faced by firms in outsourcing to India, such as maintaining consistent output quality. "Ensuring output consistency has been an ongoing challenge for many businesses looking to outsource their work to this nation. Often quality drops if the work is not well defined or the staff member assigned changes frequently," he said.

He also touched on strategic shifts needed to foster a relationship with India, suggesting that New Zealand should focus on areas other than dairy, which has been a sticking point in past FTA talks. "India is the world's largest milk producer - they do not need or want New Zealand's dairy products any more than we need theirs. We need to accept this reality and move beyond a transactional trade agreement by taking dairy off the negotiating table to focus on how we can provide solutions to systemic problems faced by this nation."

Changlani further proposed leveraging New Zealand's expertise in agrotechnology and sustainability, suggesting that the nation could aid India in addressing challenges like climate change and food systems. "While there is little demand for dairy products as such, New Zealand excels in agrotechnology and with India facing increasing pressure on its natural resources due to population growth and climate change, there is scope to offer high-value agrotechnology scientific expertise in areas such as organic farming and low-emission agriculture," he added.

The initiative aligns with Changlani's broader strategic vision to improve bilateral ties, utilising India's workforce and addressing sector-specific tax implications. "To attract skilled talent for New Zealand's critical shortages, we must address our high non-resident withholding tax rate on royalties and dividends which are around 15%, especially when competing with countries like Singapore, where the rate is just 5%."

Changlani's statements highlight a comprehensive approach to fostering international partnerships and economic growth, with a focus on utilising untapped human resources in complementing time zones for business growth across borders.