Outsourcing is a quite efficient problem-solving method in many industries. What you do here is basically hire someone in a different region of the world to do a part of your job for you. This is often quite frugal since you don’t have to train, equip or hire new people in order to make an in-house team. Unfortunately, this has some drawbacks as well. Seeing how they have the cheapest labor in the world, India and China are two greatest outsourcing hotspots. Unless your business is located somewhere in the Southeast Asia, these countries will be so far away that you won’t have any control of what is going on. Luckily, there is a solution to this problem as well and it is called nearshoring.
What is Nearshoring?
To put it simply, nearshoring is outsourcing to a country nearby. Most commonly this is a country you share a border with. In this way, even though you are sending some of your business abroad it is still relatively close to you, which means that in-person inspection will always be and option. It also means that you will have a better oversight of all the management issues and be able to get a personal insight in local operational prices. When offshoring, regional managers will often have the opportunity to inflate their price of doing business on paper and in this way increase their personal gains at your expense. These are just some of the risks of offshoring.
Not About Price
Surprisingly enough, one of the main reasons why companies decide to outsource is not the price of the end product, but its quality. The experts behind NSM Engineering claim that the main reason why businesses from neighboring countries turn to them is convenience. For example, if a company not in this industry wanted to get involved in social engineering, they would first have to hire talent and pay for the necessary gear (both software and hardware). Even with this pricy move, it would take years until their engineers are experienced enough to try and compete with an already existent company in the same business niche. Luckily, nearshoring allows one to skip this step entirely.
Another reason why nearshoring is a great option for many businesses is the expedience of coming up with a solution. We are of course not talking about Skype conventions since it works the same with offshoring as well. However, fewer cultural differences can make business negotiations run smoother, while same time zone guarantees that no one has to stay overtime in order to maintain a real-time conversation with your company. Finally, if the need arises that your personal touch is required, you can easily be at your target location in the matter of hours. Every single one of these reasons would on its own be enough to make nearshoring into a compelling option.
Lower Travel Costs
Now, we already stressed out the advantage of being at the desired location in a matter of hours. However, what most people imagine by this is traveling less to get to a business lunch. If only things were that simple. You may not be the only person to travel, since at times particular members of your team may be required at the other company’s headquarters. It goes without saying that they would travel on company’s expense and the nearer your outsourcing partners are, the less you will have to pay. This can sometimes result a substantial budget surplus on the annual basis.
Like any other type of outsourcing, nearshoring can sometimes be a brilliant business idea to move past a particularly troublesome obstacle. Better yet, it brings some advantages that offshoring simply cannot compete with. To make the long story short, if you are primarily concerned with the price of the workforce, then by all means turn to offshoring. However, if you are more concerned with overall quality of the product and cooperation between the two companies, it might be a better idea to just stick to the nearshoring.