Offshoring and nearshoring remain a highly controversial topic in the IT world. But let's first look at these terms themselves. Both refer to the relocation of business activities abroad. The primary difference lies in the distance. While this does not play a major role in offshoring, which is usually only cost-efficient in the short term, in nearshoring the "near" foreign country is the eponym.
Money and motivation
And now we have already touched on the topic of "cost efficiency". But why is this usually only short-lived with offshoring? - Because counterproductive IT outsourcing (regardless of whether it is IT nearshoring or offshoring) causes more costs in the long term if the necessary resources are not available.
However, the biggest motivator to resort to this type of outsourcing is often a lack of expertise rather than the desire for greater cost efficiency. But one should not be put off here, because it is actually possible to do both.
The various shoring models are primarily used by small and medium-sized companies. Here, however, the nearshoring offer is already very meagre, as most IT companies do not offer this in that range of companies.
Of course, every company has the possibility to buy in experts from all parts of the world. However, in addition to the budget, there is often a lack of organisational components.
The basic organisational basis
In context of various large-scale projects in which we have already assisted possible corporate groups, we know these outsourcing processes, including IT offshoring and IT nearshoring, all too well. It should be said here that even big-name corporations often fail in their offshoring efforts. The reason for this is usually the lack of organisational elements such as unclear responsibilities, insufficient communication and divergent working cultures.
These points should be carefully calculated by the team/management responsible for transitioning when offshoring. In the context of nearshoring, certain factors are easier to influence, but here too the criticality is very high.
Although we do not want to go into the topic of project management in the context of this article, there is one thing that must be mentioned -> the goals and expectations should be clearly defined beforehand and communicated as such.
However, if even large corporations are already having problems with IT service providers in the shoring sector, what is the best way to tackle this issue? As already mentioned, the be-all and end-all is a basic organisational foundation. As a rule, a transition manager comes into play here, who ideally knows the source culture well and can set realistic goals. Within this framework, processes, procedures and responsibilities must be defined and accompanied.
If this is the case, nothing stands in the way of successful IT nearshoring/IT offshoring. In addition, this not only relieves the burden on the company's own employees, but also, in the best case, noticeably reduces IT costs.
Other countries, other customs
Let us now turn to other factors that are a major issue in offshoring and nearshoring.
The DACH region is probably the most uncomplicated, because here the quality and cultural requirements overlap strongly and the language differences don't make much difference either.
However, if we move our outsourcing to countries that are more attractive in terms of costs, such as Romania or Hungary, we need a better structured language interface so that the transfer of knowledge and information can take place as smoothly as possible.
Different economic viewpoints also play a role here, so you should inform yourself carefully beforehand if you want to bring IT support from abroad on board for the long term.
In conclusion...
It is precisely for these reasons that we increasingly recommend our clients to see nearshoring and offshoring as a sub-segment, should economic factors play a major role.
Outsourcing is a pleasant tool and the driving thought is often quickly conceived, but here, too, structure should not be spared, because the existing risks can be quite high.
Digital Creek can help you to find out where outsourcing makes sense in your company and at the same time brings your business forward, because as an IT service provider it is our task and our goal to support you in all areas, be it IT consulting, contract programming or IT offshoring/IT nearshoring with the highest quality standards.
