Outsourcing! Near-shore!

Text originally posted on http://blog.omnicom.rs
No pictures were retrieved after the blog was taken down.

There are several reasons for outsourcing services, including, among others, a lack of expertise within your company in a certain field. However, the main reason companies decide to go off-shore is, of course, money. Many off-shore companies, especially in Asia, are able to provide services for a much lower price than anything you could find in Europe or America, but – as you might expect – here are certain downsides to going for that solution.near-shore-outsourcing

There is no one-size-fits-all answer to the outsourcing question, and every company thinking about it should be well aware of the difficulties and problems that may arise in specific cases. If the only requirement is a low price, then, sure, go far east and find the cheapest option. But if the product you need developed is somewhat sensitive to cultural or language barriers, I suggest you explore another option: near-shore outsourcing.

What is near-shore outsourcing

It is often defined as outsourcing to a nearby country, most often a neighbouring country to your own. Some would say that near-shore countries are those that are less than 3.5 hours flight away, or that you mustn’t cross the ocean to stay near-shore. Others would argue that time zones are what limits “near-shoring”. The definitions may vary, and be more or less strict, but the idea remains the same: outsourcing to a country with lower market prices, but without cultural, linguistic or business differences.

What’s good in near-shore outsourcing

Time zones

Have you ever worked with people from a different time zone? If the difference is just an hour or two, working hours are adjustable to the project’s needs. However, if your partners are further, and the difference is more than 3 hours, there may be a problem with the two companies’ working days not coinciding. You will often find that by the time you see results and require changes, the off-shore company’s working day is over. Every time this happens, it potentially sets your project back a full day.

Staying within a reasonable time zone span is good for project efficiency.

Culture

Cultural differences are subjective and hard to quantify. As a rule though, they tend to increase with geographical distance. In particular, European countries generally have much more in common with each other than, for example, with cultures in Asia. For that matter, even North America can feel like a different world to Europeans, despite common languages and historical ties. Depending on the kind of project you’re working on this might be quite an important point to think about.

Language

Have you tried learning Chinese or Hindi? Did you find it difficult? I speak 3 languages fluently, and can understand many more – but they are all European. I tried to learn a few sentences in Japanese and could not make out any logic in what I had been told. The grammar and syntax was just too different, not to mention the script. I admire the level of English that people in many Asian countries often learn, but there is frequently still room for misunderstanding and mistakes. Across most of Europe, meanwhile, fluency in English is fast becoming ubiquitous.

Distance

Distance works both ways: if it’s easy for you to travel to the country to which you’re outsourcing your project, it is also easier for the managers and developers who are working on your project to come to you in case of need for a meeting.

Often the near-shore company has an onshore representative (in the case of Omnicom, that would be me ;) ), which makes life easier for both parties: face-to-face meetings are known to be much more productive and to give better results than Skype or phone conferences.

Prices

Asia has a well-established reputation for providing IT services at competitive prices. These kinds of prices can’t be expected in any of the European countries. However, rapid improvements in wages and working conditions in places like India and China are fast absorbing the difference between Asian and Eastern European rates.

So, the bottom line is…

If you want to lower the cost of your projects while still retaining good control, a high degree of responsiveness in case of changes, and a development team that understands your market, you should be thinking about near-shore outsourcing.