By James Lawrence - Georgia - 4 months ago

Nearshoring - a surefire alternative

Although it tends to have negative connotation, outsourcing has become an integral part of business in the 21st century. Outsourcing, or the delegation of a task to an external source outside an organization, offers a variety of alternatives that can save time and money, while possibly doing a better job then was ever possible if the task was internalized.

But not all outsourcing is created equal. Unfortunately outsourcing has become synonymous with offshoring, bundling the bad reputation and drawbacks inevitable with offshoring to outsourcing. Offshoring is outsourcing work to another distant country, the most common locations to offshore work are India and China where labour is cheap, workers plentiful and regulations often non-existent. Offshoring often leads to complex managerial and logistical problems due to language and cultural barriers and time-zone differences. Rather than sacrifice efficiency and oft quality, more organisations are opting for nearshore solutions.

As the limitations of offshoring have become more pronounced, practice has increasingly shown that neighbouring countries can offer a correlative-middleground of cost and competence. In the process of nearshoring, operations are transferred to a nearby country, as such, both parties enjoy the benefits of proximity. As mentioned above time differences unavoidable in offshoring can cause unnecessary rifts in communication. Nearshoring allows collaboration between teams that is convenient for both. Similar or identical time-zones create greater efficiency, mitigating lag-time, streamlining turn-around times for projects allowing teams to more reliably meet tight deadlines. Nearshoring alleviates developers from bleary-eyed night-shifts reducing customer anxiety in diminished code and service. Working in the same time zone has shown to lead to more stable and satisfied workforces, for both the outsourcer and the outsourced.

Time differences aside, nearshorings geographical proximity allow internal and external staff to meet in person. Offshoring and the fundamental great distances involved allow only rare and expensive trips, reduced face-time between managers and external sources leads to misunderstandings about project direction and result in delays. If an outsourcer takes the route of frequently visiting offshore locations, travel related expenses reduce savings originally intended by outsourcing. Utilizing the talent of neighbours allows easy visitation and greater oversight, reducing travel costs, project confusion, nasty surprises and vulnerability to threats such a intellectual property theft and fraud. While more face-time may not guarantee perfection, it stands to reason that working closely with nearshored staff is more likely to avoid less-than-desirable results and setbacks. Face-to-face communication is the cornerstone of cohesive and lasting teams.

Nearshoring offers the benefits of offshoring, low-cost, skilled labour forces and less-stringent regulatory environments, while reducing difficulties imposed by distance from the client. The ubiquitous nature of technology has led to an assumption that communication and collaboration can be unproblematically performed over distance, but this isn’t necessarily the case. Nearshoring emphasizes location and proximities influence to the success of business relationships; distance is oft associated with difference, difference imposes difficulties in sourcing relationships. Proximity is associated with similarity, similarity enables smooth relationships, alleviating language and cultural barriers, geographic distance and differing time-zones - enhancing competitive advantage, oversight and allowing more time to be spent establishing long-term and trusting relationships.