While outsourcing and offshoring are still major drivers in the global economy, more and more companies look for other forms of “shoring”. Especially in the Information Technology industry outsourcing has been known and loved for years. But of course, there are many forms of ‘shoring’ that CIOs have to consider.
Outsourcing is an effect of the changing landscape of technologies and pressure on the companies is to deliver more, quicker and cheaper.
At certain point, every company has to decide whether it should build an in-house team or outsource the processes and hire an external company. When IT processes become present in every aspect of the company’s activities, decision makers must consider multiple factors – not just cost savings.
IT has never been as easy business – with demand for skilled specialists growing much more rapidly than their number. According to report by European Commission, ICT is creating about 120,000 new jobs each year. However, due to differences in demands and skills, and despite high unemployment Europe could face a shortage of up to 900,000 skilled ICT workers by 2020.
Nearshoring – reducing the barriers
Nearshoring means outsourcing business processes to companies which can offer less expensive resources, located in a close proximate region. Often, it is even a neighboring country. It is a form of finding new and appropriate resources which can support cost reduction and/or development in the organizations.
Company whose country of origin is in Western Europe can be interested in gaining access to new resources which might help to achieve its goals more effectively. Therefore, it looks for experienced company near the country of its operations to support such needs. For example, West European companies very often outsource given processes to Polish or Czech companies.
How to get started?
As noted, Nearshoring is a type of Outsourcing and although brings additional value, it is also a complex process. Too often, Outsourcing is perceived as an easy way to immediately cut the costs and help organizations benefit from it in a short run. Such an approach, however, may not bring the expected advantages to your business.
Since decision on using Nearshoring could be perceived as strategic for your organization, you need to make sure you and other stakeholders have full understanding of what this is and ensure the best partners are chosen for supporting the change.
What makes a “good” choice?
Nearshoring is a strategy with proven footprint to many companies worldwide.
Probably, one of the first aspects coming to people’s mind while hearing “Outsourcing”, “Nearshoring” might be cost cutting. Obviously, this is one of the biggest incentives for modern organizations in order to maximize their business efficiency but it’s important to remember that it is more than to find the cheapest foreign partners and transfer part of your business/responsibilities to them. Following only the incentive of cost reduction could be the easiest way for one of the greatest failures for you and your organization.
These days modern organizations operate in a high-paced environment boosted by rapid changes which require close proximity to each part of the business to ensure effective decision-making process. IT services – so often outsourced – are usually in the middle of it all.
Having said that, what one needs is a reliable and experienced business partners who can support the company in achieving their goals effectively.
Thus, apart from pure cost cutting focus you may appreciate in Nearshoring access to broad pool of new resources like quality workforce that includes highly-skilled IT professionals ready to support your rapid development within same or almost similar time zone.
Having your extended teams within the same time zone can also benefit by ensuring insignificant differences between cultures. You should make sure that your Nearshoring business partner puts adequate emphasize on understanding your business culture and needs. On the other hand, there is also great responsibility on your side, as you should openly share with them your company’s values, action plan and feedback on the business decisions, as these would be one of the most important drivers for successful Nearshoring projects.
Having already your partners and teams abroad, but still close to the core business can ensure better responsiveness to changes and new requirements. With a time, the relation and communication should develop, while the uncertainty should decrease. Therefore, you may count on boosting the efficiency expressed not only in lower costs, but also in better quality of the results.
Find your perfect match
There is no other way but to embrace the market transformation and get the most out of it. Sometimes, as is also the case for established market leaders, it means regaining the competitive advantage. Today, many companies are challenged by different causes. It might be technology, cost reduction, migration, local market characteristics or something totally different. Nearshoring offers very good solution to some of them.While considering any decision of whether an organisation should open to Nearshoring, it is also necessary to find the proper partner that will consult your organisation and its stakeholders about the proper solution to maximize benefits and reduce the risk of failure. As it is about the process of building mutual understanding and empathy between parties, Nearshoring does require a partnership approach, in order to bring considerable benefits. We, at NATEK, are ready to help you with your decisions and provide you with proper solutions combining the quality and cost effectives.
Written with NATEK Sales Manager Ryszard Jakubczak.