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28 November 2019

Nearshoring - more opportunities for your business

What is Nearshoring?

The IT sector is one of the most dynamically evolving business industries. It is not only due to the technology it offers but also thanks to the wide range of services it is able to deliver to other businesses. One of these is nearshoring, which means outsourcing of services to nearby countries, i.e. located on the same continent. However, it is not distance that is at the core of this idea, but above all cultural and business proximity.  

The opposite outsourcing model is called Offshoring, in which case the company chooses a business partner located in a remote part of the world, which often involves cultural differences and discrepancies in the work models. Offshoring certainly enables project implementation at lower costs, but it brings the business a significant risk resulting from cultural, communicational or large-scale time differences.

Is nearshoring the right solution for your company?

Nearshoring offers a variety of business possibilities and allows for flexible cooperation with your IT partner. It is a relevant solution for companies which have no IT team and those which require quick support from specialists in a given area or a team dedicated to the implementation of a project. Regardless of your needs, it lets you cooperate with the best IT engineers without having to hire new employees or create a new department. Being an optimum solution pricewise, it provides access to knowledge and skills of qualified IT specialists.

Numerous companies choose nearshoring due to lacking human resources or requiring support within given technological areas. Another reason is the need to focus on the basic business activity without involving internal resources. Time pressure and cost reduction are important decision-making factors. Companies are less and less likely, however, to indicate cutting costs as the reason to start outsourcing cooperation. They more often care about the new technological opportunities they gain as well as the possibility to focus on the customer’s activities.

What is more, nearshoring allows for selecting flexible cooperation models in which the costs, the scope of liabilities and rights, the size of teams or the cooperation period are individually specified and adapted to the needs of a given project. It enables a full “personalisation” of the offer with regard to your project’s needs.

What are the benefits of nearshoring?

  • Access to a large group of IT specialists – you do not have to hire new employees to use specialist knowledge. The nearshoring service includes access to your partner’s IT engineers with a lot of experience and sufficient skills. It is an important advantage in case you wish to create completely new software that uses a technology your team has no experience with.
  • IT project cost optimisation – the possibility of implementing a project more effectively than in the case of the tasks being completed internally. Furthermore, you do not need to go through the recruitment process and you avoid administrative costs or those related to the maintenance of an employee or a whole team dedicated to the project.
  • No distance barrier – on one hand, the lack of a large distance between the countries, i.e. located on different continents, is reflected by the cooperation costs connected to trips or meetings. On the other hand, the cultural and business proximity is key to mutual understanding, defining goals and ensuring comfortable conditions of cooperation, communication and good relations between people working on the project. By selecting a business partner whose work culture and ethics are similar to ours, we avoid uncomfortable situations and misunderstandings. This is one of the important factors that influence the efficiency increase and the popularity of nearshoring compared to offshoring.
  • It increases competitiveness – no matter if you choose to outsource programming or a team of specialists, you are given access to new technological knowledge and areas in which you lack sufficient experience. This enables you to improve the quality of products and services and thus make your business more attractive against the competition. Your business partner will provide you with lots of advice and tips and precisely schedule the work course on the project. Nearshoring creates space to develop the best solutions and enhance the attractiveness of your business.
  • Time saving – you improve efficiency on many levels. You will avoid a lengthy recruitment process for IT engineers from the proper areas and specialties. As a result, you do not have to wait with implementing a project and you are able to start work promptly. Additionally, as needs increase in a short period of time, the team can quickly become overloaded with work and the tasks to be performed. This negatively affects work efficiency and quality. Errors are more likely to occur and problems are more difficult to solve

When is the nearshoring service the right choice?

It is the best solution when your company is facing the following issues or challenges:

  • You need to speed up the work on a project – project development and implementation of new solutions.
  • No specialist in a narrow technological area.
  • More professionals are required to accomplish the project.
  • Your company is heavily overloaded with work, but it is impossible to increase the number of staff.
  • Recruitment difficulties – limited project implementation time or problems finding a relevant specialist.
  • Limited budget – project cost optimisation.

How to select the right partner for cooperation?

Your involvement is crucial for the project to be successful. It is important that at least one member of your staff, usually the Product Owner, actively participates in the work of the outsourcing team. This involves joint task planning, monitoring the development of the work and whether it is going in the expected direction, as well as communication with the team and answering any questions about their needs or specific requirements.

When selecting an outsourcing partner, the following factors are worth considering:

  1. Cooperation and settlement model
  2. Technologies, competence areas and experience in projects
  3. Size of the pool of professionals provided by the company
  4. Business culture
  5. Security and certification
  6. Technological possibilities

Why is Poland the right choice?

Did you know Poland is one of the most popular places amongst companies from all over the world with regard to the use of IT services? Polish IT engineers are amongst the world’s best educated. Nearly 40% of people aged 25-34 hold higher degrees and know what Agile and Scrum stand for. Every year, the IT market gains another 15,000 graduates of computer studies. The ease of communication with foreign customers is an extra asset, as English is a natural ‘work tool’ for Polish IT engineers.

Customers from such parts of the world as Western Europe or the US especially appreciate cooperation with Polish specialists due to no cultural differences or communication problems. Issues in these areas are much more likely to occur in the case of partnership with a subcontractor from China or Indonesia.

The central location of Poland is also an advantage. For example, it takes one to two hours to fly from most of European capital cities and about nine hours to fly from the US. Moreover, the country offers rates considered as attractive by foreigners. The development rates are very competitive compared to local IT markets with no risk of a decrease in the product or service quality.

The practices that build good cooperation

Agile is one of the most popular IT project work management techniques. More and more companies of a complex internal structure choose a methodology which includes smooth reaction to changes, transparent communication and high task efficiency. More and more international companies out of the IT sector are also deciding to create Scrum teams. This helps achieve very good results during outsourcing cooperation in the area of new technologies.

A nearshoring partnership involves remote cooperation by definition. It is a good idea, however, to arrange personal meetings, especially at the first stage of the project where it is quite important that the business partner knows the company’s needs and expectations. This also facilitates transfer of knowledge and company data as well as understanding the principles of a given project.

Mutual monitoring of the process and the work results is one of the most important practices which influence a project’s quality. It is worth arranging daily, weekly or monthly meetings when the team can exchange information as well as correct and discuss the plans for the following days.

Summary

Nearshoring allows for enhancing the potential of your business, its development in the areas of new technologies and smooth implementation of innovative solutions your customers will also benefit from. IT outsourcing offers a variety of possibilities, although it requires a lot of involvement, building business relations and openness when searching for unconventional solutions. By having a good guide to the complex world of new technologies, you might find new ways for developing your business.

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    Contact

    Transition Technologies PSC Sp. z o.o.
    Poland, Lodz 90-361, Piotrkowska Street 276
    NIP 729-271-23-88

    tel.: +48 42 664 97 20
    fax: +48 42 664 97 30

    contact@ttpsc.com