Finding talent is not very easy, especially if you require talent that is niche. Also, the affordability of this talent can be very high for some companies too. Therefore, many organizations are looking to outsource their delivery centers. However, there are multiple options when it comes to outsourcing – onshore outsourcing, offshore outsourcing and near-shore outsourcing. Here’s how you can understand it better:
- Onshore outsourcing: This is when you outsource to an organization within your country. However, often the cost involved is huge, especially in the developed world.
- Offshore outsourcing: This is when you outsource to an organization on the other side of the globe. This reduces the cost greatly, especially when outsourced to developing countries like India as the labour cost her is inexpensive. However, the cons of this kind of outsourcing are the time difference management and issues with communication.
- Near-shore outsourcing: This is the kind of outsourcing where the organization outsourcing the work is almost on the same time zone as the country they are outsourcing it to, thus making it easier to communicate in real time. Near-shore outsourcing is an extremely advantageous option for most organizations.
Near-shore outsourcing is increasingly becoming the popular choice for many organizations. Here are some of the advantages of near-shore delivery centers that are leading to this change.
- Focus on core business function: This is an obvious one. When certain processes are outsourced to another delivery system, businesses can focus on their core competencies. This helps businesses build on what they do best, while coordinating with their near-shore partners for their timely deliveries.
- Reduced operation cost: The training and talent acquisition for the business are handled by the near-shore partner. This, therefore, reduces the operation cost. Additionally, even investment on the delivery-related technology and infrastructure is undertaken by the near-shore partner, decreasing the cost further.
- Resource flexibility: Markets are often dynamic, and near-shore delivery provides organizations with the ability to have resource flexibility and manage their capacity based on the changing market needs. If the market demand changes, so can the Service Level Agreements (SLAs) to adapt to the change; as opposed to hiring resources internally and realizing that the market is moving in a different direction.
- Cost of hire: Though it can be said that near-shore is not as cheap as offshore outsourcing right now, there is no doubt that it is so much cheaper than having in-house resources, or outsourcing onshore resources.
Additionally, for organizations, it means hiring talent that is of superior quality, at a lower rate.
- Convenience of time zone: Outsourcing to near-shore delivery centers gives organizations the luxury of having their teams in the same time zones. This means when department heads need to have a discussion or need to discuss a new idea, they do not have to wait till the other part of the world wakes up. Additionally, since the entire team is working around the same time, delivery delays are far less; making the entire development process more efficient.
- Easy on-site visits: Having a partner close to the organization makes it easier to visit them on-site frequently, owing to shorter travel times. This helps collaborate better, and it is always safer to have face-to-face discussions on growth paths than over the phone. This also leads to better interaction between the teams and helps prioritize and organize.
- Better communication: It’s a known fact that personal interactions often brings about better outcomes – chances of miscommunication are lower. With their near-shore offices close by, organizations can interact with them often and on a more personal level.
- Cultural alignment: Typically, countries that are near each other have better chances of cultural alignment. In the sense that the languages they speak, their cultures, their understanding of things are often more aligned than someone that works on the other side of the globe. For instance, something that might seem humorous to someone in the US may not seem the same to someone working out of Bangladesh; Mexicans, on the other hand, may be better equipped to understand that humor.
- Real agile development: Having a near-shore delivery center aids an organization’s ability to make the agile methodology work better for them. Whether it is real time planning, holding scrum meetings, addressing issues as and when they occur or simply coordinating immediately, all are more efficient when the team is accessible and working together.
There are many case studies that show how near-shore delivery systems work and how they are more advantageous. One of the examples is our work with our client Synaptitude. You can read more about it here.
More and more businesses are opting for the near-shore delivery systems, because working as teams with shared time, culture, and accessibility just works better. Companies have started to see the benefit of working with people who are closer to them and can be sourced at much lesser cost. These kinds of collaborations with neighborhood countries lead to long-term relationships, while ensuring the efficiency of the process. In the end, an organization is always looking to maximize profits while minimizing investments, and are always on the look-out for professionals who can work at almost half the price – near-shoring gives them all this and more.