Is Offshoring Now Moving to Nearshoring?

IBA Group

Mark Kobayashi-Hillary

It’s interesting to see the Indian press recently reporting research from the Wharton School in the USA on the offshore outsourcing climate in India. The Wharton data reports that many companies are exploring how to reduce their offshore outsourcing strategy – now preferring to find ways they can reshore or nearshore the processes.

This makes sense. Outsourcing for an enormous cost reduction may have been a driver a decade ago, but it’s not possible in the India or China of today. Service quality has become far more important as supply chains have become more complex and this does mean that many companies now want to keep their team closer.

This general shift in strategy does lend itself to technology experts positioned in central and Eastern Europe. The Indian technology boom of the 2000s will not persist into this decade if the more general business strategy is to start keeping valuable assets closer to home.

It is not always possible or desirable to undertake every technical task in the immediate vicinity of the head office of an organization, but the nearshoring option does allow companies in Europe to work across the rest of the continent.

In the past the nearshoring versus offshoring debate was always nuanced by the difference in cost, but now that many companies are actively trying to find a way to keep their team closer together, it seems the value of remote offshoring is declining.

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