Gartner predicts a 6.2% increase in spending on IT in 2023, and spending on technological solutions supporting remote work alone is expected to amount to $332.9 billion. It seems that investment is inevitable, and it is not the budget that can be an obstacle to this, but rather the lack of adequate IT competences. The talent gap in the technology sector is a problem that Europe has been facing for years – the nearshoring of IT services may address these needs. In the article we explain what it is and which services are worth delegating “next door”.
What is IT nearshoring?
Nearshoring is the delegation of IT services to companies in a country located nearby or in a similar time zone. For example, Poland, Ukraine and the Czech Republic are the nearshoring partners for Germany. The advantage of this model is the possibility of organizing business meetings more frequently, a time zone facilitating cooperation and similar working hours. The nearshoring model also means cooperation based on a similar organizational culture and better communication thanks to a reduced language barrier. Companies that use nearshoring services also emphasize the quality of services as an important aspect.
Nearshoring vs. offshoring
In the past, offshoring to distant locations was a popular model of cooperation in the field of software development or a wide range of IT services. This solution was characterized by low costs and allowed companies to save money and relieve the burden on particular departments in their organizations. With time, however, many organizations began to see the disadvantages of this solution: problems with the quality of services, communication barriers, geographical distance preventing frequent business visits, as well as organizational and legal differences. In many cases, offshoring can bring benefits. However, there are some services that are worth nearshoring.
Which IT services are worth outsourcing to a location nearby?
1. Software development
2. Quality Assurance
During a time of accelerated digitization, providing users with high-quality and well-functioning solutions has become a real challenge. Moving to the online world in areas such as medicine, education, work or shopping has forced the faster design and delivery of functional applications and systems, resulting in the increased role of Quality Assurance services. In software development, the outsourcing of QA services is beneficial because of an independent view and audit conducted by an external team. Apart from defining areas for improvement, it also makes it possible to get access to new Quality Assurance tools.
3. IT Managed Services
Infrastructure management is one of the most frequently delegated IT services. Entrusting services related to device and systems administration allows you to optimize costs and improve the quality of services and processes in the organization. By outsourcing these tasks to a company from a nearby country, we can be sure that all services will be provided efficiently, and requests will be answered as quickly as possible (in the case of the offshoring model it can be quite a challenge).
4. Business Intelligence
Nowadays, analytical and reporting tools such as Power BI, Qlik Sense, QlikView or Tableau are a must-have for any organization that wishes to make conscious and data-driven business decisions. Business Intelligence implementation projects require a thorough pre-implementation analysis, yet the implementation itself does not mean that the project can be considered successfully completed. In order to fully utilize the potential of the BI tool, training for end users is recommended, which is much easier to conduct with a Business Intelligence partner in a closer location who communicates well in English.
5. Digital Transformation
The pandemic did not initiate the digital transformation, but only accelerated this process. Competences allowing companies to implement cloud, Artificial Intelligence, Machine Learning or RPA solutions are some of the most difficult to obtain on the market, and countries such as Poland have been supporting their neighbors from Sweden, Germany and other European countries in implementing innovative solutions for years.
How to choose the best direction for IT nearshoring
When looking for the best direction for nearshoring, it is worth paying attention to such aspects as:
- The availability of developers and IT specialists on the market and the number of specialists in a given country
- Language competences and English proficiency
- Technological capabilities in the field of remote project implementation – having the necessary tools in place to facilitate cooperation
- Logistics-related aspects – number of airports, highways, distances between key cities and business centers
- Regulations ensuring intellectual property protection
IT services nearshoring – summary
According to the analytical company Gartner, to survive the post-pandemic earthquake, organizations should outline and implement plans to accelerate digital transformation by 2024. Nearshoring of software development services, QA services, IT Managed Services and Business Intelligence are an opportunity to gain niche competences supporting the implementation of innovative solutions. When looking for an IT partner, it is worth taking a closer look at Poland, which has become a friendly market for IT projects over the years thanks to the high level of developers’ competences and language skills.