The most common options you could consider when looking to outsource IT operations are onshoring, nearshoring, and offshoring.
Onshoring involves relocating IT processes to another location, usually within the national borders, for instance to another region where rates or availability of the services you require are better than in your locality. Onshoring helps to achieve better output and flexibility without extending the payroll.
However, the majority of developed countries lack skilled specialists – last year, Germany alone was short 82,000 IT staff – which pushes businesses to look for software developers abroad.
The first option – offshoring, also known as farshoring – involves outsourcing IT operations to contractors in distant locations, including the ones in different time zones – mainly because of lower costs and economic differences. A common offshoring destination is Asia.
Even though offshoring brings immediate benefits, such as cost reduction or quicker turnaround due to work round the clock, it actually may not be the best strategy for mid- and long-term business plans. The risks associated with the quality of coding translate into the increased challenge of its control, incurring additional costs and liability. The story of the Max software issues leading to a pair of deadly Boeing 737 crashes proves this point well enough.
Having tried farshoring, many European companies experienced first-hand how deep cultural differences can effectively hamper project execution – and so has their interest in nearer IT outsourcing destinations revived.
Nearshoring helps to maximise business efficiency while reducing the barriers of farshoring. Seamless communication, little or no time zone difference, multiple cultural similarities, and cost-effective travels make this type of IT outsourcing more secure and viable.
Many growing businesses enlist IT outsourcing companies in nearby locations, very often just outside the borders of their countries. For German businesses, typical locations include CEE countries, Poland in particular. In the last few years, it has become one of the top IT outsourcing destinations. Here are some reasons you should get interested in it, too.