Why Nearshore technology is the future of outsourcing

Nearshore technology

NearShore technology is a new term that means migrating your business operations to another country that is near your current area of operations. This means that the company you outsource your operations to is within the same region as your own perhaps with similar or slightly different business environments. Indeed, globalization has seen growth in business activities with new innovations and technologies being invented on a daily basis.

Nearshore technology is not a relatively new term though it’s something that is getting popular every day. It borrows from already existing ideologies as businesses try to leverage all possible avenues for a competitive edge. Some of the factors that drive companies into Nearshore technology are challenges within the current environment to provide crucial resources necessary to support business operations. For instance, qualified human resources, in some cases costly factors of production in a country, and even perhaps unfavorable political climate.

Nearshore technology simply provides an opportunity to;

  • Minimize costs of production
  • Enhance the quality of service while still serving the same target markets.

Nearshore technology is gaining momentum as a form of outsourcing with a number of startup companies springing up across Europe and Asia. The technology comes in as the third form of outsourcing among Offshoring and Onshoring, there is also Farshoring which is the opposite of nearshoring.

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Quality and affordable human resource

In markets where there’s a lack of enough skilled workforce in an area, a company may choose nearshore technology. However, quality human resources might be available but at a higher cost. This eats away on the revenues and potentially threatening the existence of the company. In such a case it becomes necessary to consider nearby options that offer cheap but quality labor.

Why choose Nearshore technology

Unfavorable political climate

In highly unstable countries, it is hard to conduct business operations with disruptive politics. Some of the harsh realities of such an environment include

  • Regular changes in laws that affect how to conduct business,
  • Lack of consultations with business owners,
  • Perhaps even looting and damage to property during demonstrations among others.

Given such a situation a company may choose to use Nearshore technology outsourcing to a nearby country that has a stable political environment.

Penetrating to a new market

Some countries require companies to have a local presence before conducting operations in the country. Nearshore technology thus helps to establish a local presence as well as enter new markets. A company can thus choose to outsource only a few departments to another country for instance administrative duties for a technology company.

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