Should companies be giving ‘Nearshoring’ a go next year?

As the year comes to an end, we at Outbox are tying up all the loose ends on projects and taking some time to look back at 2015. Some of our highlights include celebrating our ten years of CRM excellence, being awarded Salesforce’s Platinum Partner and strengthening our partnership with hybris.

But we are also very much looking forward to 2016 and looking to see which technology trends will be appearing in the upcoming months. One of the biggest trends we can already sense, in response to the IT skills shortage, is ‘nearshoring’.

Nearshoring allows businesses to outsource certain business operations that would incur a high cost or be unattainable in the country the business operations is in. Often India or the Philippines have been seen as popular outsourcing locations, however, time differences and expensive tariffs are pushing companies to nearshore.

Europe has been embracing this trend as many countries look to take advantage of the fresh talent emerging from the Eastern bloc such as Poland and Romania. Cities such as Warsaw and Gdansk are now leading the way in technology skills as more businesses invest into their workforce, and the outsourcing business sector thrives due to cost effective business rates. Big technology companies are looking to grab the best tech skills in the country. For instance, Hewlett-Packard alone employs more than 4,000 people in Poland, and expect to increase this number over the next couple of years.

Our Director, Nicholas Mobbs, has taken notice of the development of nearshoring over the past ten years and spoke recently about why nearshoring is so popular in the UK IT market: “The IT nearshoring market is well established in the UK, where most modern businesses outsource at least part of their operations to Europe, in fact that is the standard model for IT in the UK. Often, businesses decide to nearshore simply because a key member of the team leaves and there isn’t someone in the business to replace them. IT is popular to outsource because for the majority of organisations it is too expensive and difficult to recruit and retain top-level in-house IT talent. Nearshoring offers a cost effective and convenient way to solve the issue”

Other driving factors include the introduction of the new EU General Data Protection Regulation meaning that unless international competitors have data centers in Europe, European IT services will be chosen over them to comply with it.

Companies should also look at how trade agreements between blocs (such as the EU) or neighbouring countries are becoming simpler to allow easier cross-border trade. Neighbouring countries often have trade agreements that cut through unnecessary bureaucracy. Leniency for European citizens travelling and working in the Eurozone have saved companies and governments thousands in border control, and the hours spent on those procedures can now be spent on business growth.

Over 70 percent of organisations in the UK currently use nearshoring or offshoring as part of their IT strategy. Therefore, for companies to remain competitive and deliver greater customer experience throughout 2016, embracing nearshoring will be necessary.

For more information on how Outbox can help your company deliver greater customer experience next year, get in touch here.

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