How nearshoring supports digital transformation

Not even the giants of the IT industry can manage all of their needs in-house. Keeping up with technology is just so hard nowadays that outsourcing is virtually the only way of filling the gaps and not falling behind.

There are 3 main ways to outsource your IT needs – through onshoring, offshoring, and nearshoring. In today’s article, we’ll be covering nearshoring and how it can foster your company’s digital transformation while not straining your budget.

As running a company gets more and more hectic, outside help comes in extremely handy at times. With a constant shortage of professionals with enough experience to speed up your digital transformation, outsourcing acts as a fast and sure way of finding extra staff.

Your budget is often the biggest limit when it comes to the speed of your company’s digital transformation. As your spending needs to be optimized, you will need to find a cost-effective solution for your IT needs. Outsourcing gives you a degree of flexibility, helping you meet rising and falling customer demand. It’s also a great way to implement new technology in your business – one that your in-house team might have trouble with.

Fresh companies face many difficulties in their digital transformation – with a rudimentary or no in-house IT team at all, new businesses will have to look elsewhere for technical knowledge. When it comes to outside help, nearshoring often turns out to be the most profitable option in the long run.

If you didn’t start your digital transformation when it was still relatively easy to get in, you might be in over your head without some help. To make it through the transformation in one piece, you’ll be needing the help of somebody with enough experience to guide you – and a nearshoring company is the perfect candidate.

What exactly is nearshoring? Nearshoring is a type of approach to outsourcing, lending part of your company’s digital services to a third-party provider. In nearshoring, you use contractors that are relatively close to you geographically, in contrast to offshoring, which makes use of companies from far away – usually countries with much lower labor costs.

The benefits of nearshoring are the same as those of traditional outsourcing, but without the limitations that long distance creates – cultural differences, time shift, and communication barriers. It also creates the possibility of face-to-face meetings without spending a fortune on travel.

The nearshore model is one of the most cost-effective types of outsourcing, saving you the time and resources required for the recruitment process and giving you access to a highly-trained workforce that’s still much less expensive than an in-house team.

The ongoing COVID-19 pandemic has caused many companies to re-evaluate their tactics and practices, requiring businesses to change their strategy in order to remain relevant in the changing economy. While offshoring might potentially reduce service costs more than working with a nearshoring partner, travel and accommodation become more of an issue – one which is especially hard to tackle during a pandemic.

Despite the rapid rate of digital transformation, we still need to meet face-to-face to better solve problems, understand each other, and break down cultural barriers. The smaller the distance you have to travel, the easier these issues are to resolve.

As the complexity of your outsourced services increases, so does your need for a highly qualified workforce rise. This is especially visible in the case of IT outsourcing – specialists from countries such as Poland are on average more expensive than those from India, but their average quality of work is much higher, thanks to easy access to education, and a much more developed economy and IT industry.

Let’s see what we have learned about digital transformation and how it can be impacted by nearshoring:

• Digital transformation is the process of integrating digital innovation in all areas of your business, changing how you operate on a fundamental level.
• Effective digital transformation requires a good understanding of new technologies, as well as knowledge of how to properly implement them in a company.

There are four types of digital transformation: company process transformation, business model transformation, domain transformation, and organizational transformation – all of which can be handled through nearshoring.