Nearshoring Back On The European Outsourcing Agenda

IBA Group
Mark Hillary

The debate over nearshoring and more remote offshore outsourcing has rumbled on for years in Europe. The debate over voice contact centres was fairly conclusively resolved a while back, with it becoming clear that most clients prefer their contact centre to be closer to home, but the broader IT and IT services market has still embraced all kinds of outsourced model.

However in all the outsourcing predictions for 2016 I have seen the resurgence of the European offshoring model several times. For example, a recent report by the analyst Global Remote Services says:

“Nearshoring will continue to gain momentum in Eastern Europe – nearshoring is fast becoming an option which is seen as being more skill specific for businesses with a mixture of complex, high-end projects as they realise the value in keeping outsourced work close to where the business generally is. Nearshoring in Eastern Europe will continue to grow as it becomes attractive and competitive to the UK market, and also much ‘nearer-to-final-customer’ and ‘easier-to-manage’ versus far-shoring.”

We all know the typical arguments when comparing Eastern Europe to a more remote location, such as India, but I think it’s important than advisors are now focusing heavily on skills availability.

Outsourcing has long been considered a “lift and drop” business strategy, which is how it got the reputation for being all about saving cash. Let’s take a process, lift it out of the business and drop it completely into a supplier and get the same work done for less. That’s the old approach, but times have changed.

The boundary of organisations has become more blurred, particularly when expert skills are needed. Organisations are hired to provide those skills, but they work in the office of the client, with the client team. The client and supplier merge together to create a solution today, rather than the client firing an entire department and dropping those processes offshore.

Outsourcing has become a more mature business strategy and with a greater value placed today on skills and partnership, it’s no surprise that nearshoring is returning to the boardroom agenda.

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