Is nearshoring better than offshoring for IT outsourcing?

Traditionally India has been the outsourcing destination for IT projects

. These days there is a lot of discussion about inshoring i.e. outsourcing done domestically. It is also argued that nearshore locations like central Europe make great outsourcing locations for European companies. Is that true?

Language proficiency, cultural similarity and frequent face-to-face visits are the advantages commonly cited for inshoring or nearshoring. Let's evaluate each of these aspects in terms of outsourcing to India.

Language Proficiency: India has a sizable English speaking population. You will find your India team pretty conversant in English. At times, you are likely to find grammatical mistakes or expressions like "today night" instead of "tonight", nevertheless the message gets through. You will be able to communicate what you want and understand the replies easily.

Cultural Similarity: Indian IT and BPO companies work in the global market and have been servicing clients in the US and Europe for more than a decade now. The work culture is aligned to the US and Europe; and the offshore teams have a good understanding of their client's culture and expectations. Many companies have SME's (subject matter experts) and functional experts working with the developers and that helps to get a clear understanding of the requirements. India also has a good number of leads and managers who have either studied or worked in the US or Europe and have a pretty good understanding of the cultural background there.

Onsite Visits: Most Indian vendors have Program Managers, Account Managers, and Business Development Managers permanently located in the client region and sometimes even in the client office if the project is large. Also project managers or tech leads from the vendor visit their clients for gathering requirements from business users, understanding the complexities, kicking off new projects or for deployments. Although these visits are common in the various phases of the project, technology these days has enabled to cut down the need of frequent visits, thus reducing the travel cost. Regular status calls, performance reviews and milestone reviews are effectively done over teleconference. Virtual Meeting tools and screen sharing technologies have made life simple and VOIP has cut down the communication costs enormously.

On the other hand, along with the cost advantage, India has a massive pool of resources and it is easy to scale up the project teams. Over 300 institutes of higher studies in India produce almost half a million technical graduates and millions of other graduates every year. The democratic government of India has taken many measures to encourage the knowledge economy. After years of experience in offshore development many Indian companies have honed their quality processes and methodologies. Therefore, India will still continue to be a preferred outsourcing destination. For more information, visit http://4outsourcing2india.com.

Is nearshoring better than offshoring for IT outsourcing?

By: Prajakta Mahajan

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