There are many companies that use only internal resources to handle their software development and do not really have a need to outsource. Also, there are many CIOs that are not sure about the benefits of IT outsourcing and do not believe it could help their business gain competitiveness.
All these horror stories about outsourcing failures only increase their hesitation. However, you have surely heard several business success stories where outsourcing played a leading role. So, what is the truth behind the curtain?
The downsides of IT offshoring
It is possible, that the difference was the type of outsourcing: offshoring or nearshoring. Both terms imply relocating a process or work to another country, but the location of the country – its distance to yours – is key.
Distance is an important factor in the success of an IT project. It determines the cost, and hence, the frequency of visits which are crucial to helping your outsourced team to get a good understanding of your business and what you are trying to achieve. Larger distance also often implies larger cultural differences, which may affect communication, which, in turn may affect the project itself. Finally, having a team on a different continent adds another hurdle to effective project management in form of time zones.
All this has caused nearshoring, the closer-to-home type of outsourcing, to gain ground.
Its major benefit is the proximity of your outsourced team – but of course there is more than that. Let’s take a closer look:
1. Nearshoring cuts costs of the IT project
Nearshoring allows you to choose a partner that will not only deliver the solution on time, but also increase cost-effectiveness of the project in comparison to doing the same job internally. Bearing in mind the increasing IT talent shortage in Western Europe and constantly growing IT recruitment and employment costs, nearshoring allows you to simultaneously decrease expenses, save time and bring years of experience to the project right away. Also – a nearshoring partner’s proximity means less expensive travel (with destinations often served by budget airlines) and a greater degree of control. The very point of nearshoring is to improve your service and add quality to what you do, cutting costs of the project at the same time.
2. Nearshoring enables access to expert knowledge
Sometimes you could find your business in need of peculiar skills or special competences, that are nowhere to be found – neither within your company, nor within the entire region. IT experts are hard to find, hard to recruit, hard to keep which forces you to compete with other employers on a very difficult market. Nearshoring gives you access to professionals in a given technology in no-time professionals that share not only your time zone, but also your work culture. This results in fewer communication mishaps and explains why successful companies tend to concentrate solely on core competencies and leave the rest to people with know-how.
3. Nearshoring enhances your workforce
On occasions, your company may have increased needs in short periods of time. Getting your own employees to do the extra work may not only take away their focus from core activities, but may also demotivate them, especially if the work is repetitive and mundane. Nearshoring IT projects allows you to dedicate resources to primary activities. Increasing the morale of your team and boosting workforce efficiency.
4. Nearshoring rescues your IT project
What do you do when your key IT project – determining the success of your organisation – gets stuck? It is essential to act before it is too late and if your in-house dev team struggles to find a solution, a new look at an old problem will surely be appreciated. Innovation and experience of a nearshore partner – all this and much more will help you solve problems you have long been struggling with. When running projects that could be crucial from the point of view of the whole organisation, it is important to entrust them to specialists that demonstrate capability to deliver results on time and efficiently.
5. Nearshoring gives you a competitive edge
As your IT nearshoring partner will have experience with different technologies, companies and industries, they will be able to provide tons of advice, should you need it. In the constantly changing world of technology, nearshoring allows for flexibility. Moreover, nearshoring also requires you to be organised and more prepared for sprints. The project has to be well thought through and clearly communicated on both sides. Thus, it creates a space to develop top-notch solutions, enabling your business to outdo competition and improve overall competitiveness.
A decision whether to stay in-house or outsource requires a careful consideration of business priorities. Employing a nearshore team makes the project harder, no doubt about it, but the benefits of it really make a difference. Consider whether or not the necessary resources and skills are in place to deliver a successful solution that adds value to your business. It is easy to complete a project with poor quality, behind schedule and with budget overrun. Nearshoring not only gives you the ability to focus on core competencies and allocate external resources to innovation, but also ensures strategic agility through adequate technology.