Are the benefits of near-shoring more realisable than those of off-shoring, is the panacea of outsourcing to India now proven to be illusory?
Off-shoring is laden with hidden costs both management problems and subsequent costs that translate into headaches and sometimes nightmares for the clients of offshoring providers. The oft-cited key benefit of offshoring-huge savings in labour is less real than most people think. A survey of over 5000 senior executives at firms that use offshoring services found “the average cost savings to be slightly below 10 percent” and that 28% of the offshoring engagements actually led to a long term increase in costs.
Research shows that offshoring take its toll on the communication and control. The time difference and language issues which are so glibly relegated to non-issue continual to dog delivery. User firms are finding that the time zone problem erode program management confidence poor communication and uncertain control. Quality control, intellectual property issues are also major issues.
If the project management costs time lag issues and quality concerns aren’t enough, the turnover rate among developers working for Indian companies is high and getting worse. The high turnover rate is a sign that the competition among offshoring providers for good developers remains high and therefore off shore staff turn will continue to effect quality, increase project span and increase cost. It’s not surprising that many executives are beginning to looking at offshoring and wondering whether there is an alternative.
In contrast to offshoring, nearshoring offers virtual development teams that have the ability to collaborate with internal staff in the same or similar time zones. This means that easy fixes do not have to wait for an isolated team to take a day-and-a-half to turn around a solution. The geographical advantages of nearshoring also allows a company’s internal staff and external developers to meet in person.
Studies-and common sense-bear this out face-to-face meetings with nearshored staff help mitigate unexpected management costs that are directly related to project confusion and unhappy surprises at the eleventh hour. While more face time may not guarantee perfection, working closely with nearshored staff is more likely to significantly reduce problems and setbacks.
By eliminating the time differences and offering at highly competitive prices with highly skilled multi-lingual staff, Heliocor can offer optimise for time-to-market for projects and new products. Whilst delivering our clients highly stable, performant, manageable teams ensuring high quality delivery de-risked as a result of better communication and control.