Pros and Cons of Nearshore Outsourcing

Offshoring is the process by which a company subcontracts a specific activity or process in its value chain to external providers. Offshoring typically means delegating certain services to contractors in other geographic regions in order to reduce costs. In many cases, production is moved to countries where labor is generally cheaper, which lowers the overall cost base.

Services, too, can be outsourced to external contractors. Service offshoring is common across many industries. In the service sector, offshoring is often used to delegate customer support to an external provider so that customer service runs from a location where the service itself is cheaper, allowing the company to save on operating costs.

Onshoring is essentially the same as outsourcing, but within the same country. With onshoring, companies can forget about cultural differences, time zone issues, legal complications, and cross-border taxes. Onshoring is mostly used to save money when average salaries vary significantly (for example, between provinces and the capital), or when a specific set of specialists isn't available locally.

The need for nearshoring arises when part of the work is outsourced in order to save time or money. Unlike standard offshoring, however, in nearshoring the company providing the services is located in geographic proximity to the client.

This type of outsourcing is especially popular with Western European companies, which prefer to commission web development for their products from Eastern European countries. Today, nearshore outsourcing is a strong alternative to both offshoring and onshoring.

Under these conditions, Eastern Europe (in particular Ukraine and Poland) has become an attractive outsourcing destination for Western European countries. These countries show rapid growth rates in the IT market, offer competitive prices, and have favorable locations relative to many European markets (the UK, Germany, France, Italy, Switzerland, and so on).

The services of IT specialists are essential for online shop owners, retailers, and administrators of trading platforms. Working with external teams to build a commercial website can be a better and faster solution than training in-house staff. Introducing digital technologies into e-commerce requires the development of IT products to automate workflows and promote the brand on a marketplace.

Examples of services that businesses can outsource to IT partners:

● E-commerce platform development: design, source code, and product launch. Attractive visual design and user-friendly navigation are more likely to engage users.

● Customer support: PBX and telephony services. The brand receives callbacks thanks to system integration with the right software.

● Website promotion: search engine optimization (SEO) and search engine marketing (SEM). A nearshore outsourcing provider can help the brand appear more frequently in search rankings and increase the number of visitors to the website.

● Development of mobile and web applications: PIM software, B2B portals, advertising platforms. The business automates its work with modern enterprise solutions.