Outsourcing is one of the main directions businesses are focusing on, especially in the recent years. From sportswear to computer hardware, many Western companies are taking advantage of the Eastern world in terms of educated work force, cost efficiency and geographical strategies but maybe the trend is already shifting.
IT outsourcing, while until recently mainly spread in India and other Asian countries is now shifting a bit to the west and positioning in Eastern Europe. Some may argue that this step is not very cost efficient but there are other issues to take into account.
Contrary to many beliefs, nearshoring is the new direction in which companies go in terms of diversifying and expanding. We will try to investigate the best places for outsourcing and why Europe is on top of the competition in that area.
First, there are many location advantages. Asian countries may offer cheaper work force but the work hours are completely different due to the time zones differences. The head office and the outsourced office are usually located in such a distance that they cannot work simultaneously. Rarely can they interact during the workday and answer time may be delayed because of that, which may lead to lost opportunities and disgruntled clients.
Being in the same or a close time zone allows the work hours for one company to be virtually doubled for one day, thus utilizing the most of the employee reaction time. This is very important considering the mobile world we live in and the demand for a quick and adequate response to the customer base. It is vital that the customers receive timely updates on the issues they have and corresponding help in real time.
Moreover, the close location of the outsourced office to the main office allows travel, which is low-cost and can happen in a business day. If needed, an employee can be allocated to visit a client office or a client can come to the outsourced office to visit his/her dedicated team members. That is something that cannot be achieved easily, if at all, if the company is located far away. Travel expenses are not to be underestimated, especially if many products the company offers are bespoke. Costs due to the need for travel and frequent visits to clients’ offices certainly lower the profits, and make any project cumbersome.
Share your thoughts about the importance of the location in making a decision where to outsource and give us suggestions for more location benefits. If you are interested in working with a trustworthy outsourcing partner with extensive experience do not hesitate to contact us.