Advantages Of Nearshoring: An Alternative To Offshoring

Nearshoring: An alternative to Offshoring

By

Pearl ([e-mail])
Symbiosis Centre for Management and Human Resource Development (SCMHRD), Pune

Nearshoring: An alternative to Offshoring
Regime of outsourcing
Outsourcing can be understood as a practice of handing over control of public services to for-profit corporations. In other words, it is a practice used by different companies to reduce costs by transferring portions of work to outside suppliers rather than completing it internally. Generally the processes which are considered as cost additions rather than being value additions are outsourced.

Outsourcing includes both foreign and domestic contracting, and sometimes includes offshoring (relocating a business

The much more manageable time schedules will also mean that nearshoring clients will not have work days that start at 5 or 6 AM--a frequent requirement for U.S.-based companies tied to far-flung offshoring providers.

Aside from the problems caused by the time difference, the geographical advantages of nearshoring can allow a company's staff and other company’s developers to meet in person. The enormous distances between offshoring providers and their clients used to make frequent trips rare and expensive. Thus there was very little or no meeting between project managers and offshore staff, which often used to result in misunderstandings about the route a project is taking.

As per a research it was found out that the researchers point of view was, "We often find companies attempt to improve their offshore strategy cost model by opting not to make the international trips. We believe this approach to be a false economy and found most that take this approach will not

This has become a viable solution for many companies because "nearshore country locations offer the advantage of similar time zones, ease of travel and potentially greater control due to familiarity or physical and cultural proximity to the customer." Areas such as Canada, Mexico and South America are becoming hotbeds for nearshoring. While offshoring is still a very popular option with companies, organizations that want to hedge their bets and curb the inherent risks of offshoring have an option closer to home.

Nearshoring Risks
There are far fewer risks of choosing nearshore versus offshore, but each come with their advantages and disadvantages. The cost of labour may not be as less as compared to offshore.
Conclusion
Offshoring's days may be numbered, so it should come as no surprise as more companies learn of the nearshoring option as it provides a better fit to the organizational objectives.
But some companies may still prefer to offshore their services as per their business cycles. Therefore, we can’t stand on a firm ground and say that nearshoring will replace offshoring but it is a definite alternative to the same.