A recent article on nearshoreamericas.com looked at the burgeoning inshore industry as a way for companies, particularly small to mid-sized operations, to save costs and increase productivity in the wake of the US recession. This is a great overview on inshoring that also highlights a few lesser known benefits:

“When it comes to staying involved in your outsourcing operation, the onshore industry can’t be beaten. With your provider in the same country with the same culture and language, effective communication increases while cost of travel decreases….Onshore customers also aren’t bothered by many of the complications of offshoring – wage and price inflation, corruption, unstable political environments, high attrition rates, access to skilled bilingual workers, etc. There is a greater sense of security since the work is governed by US law. Data or software protection and intellectual property concerns are less of a hassle.”

“Dana Stiffler, Research Director for Global Business and Outsourcing at AMR Research, says that proximity is especially important for small to medium size firms that operate only in the US, since they can’t outsource on a large scale. ‘One thing that Indian and Latin American outsourcers never figured out is how to serve smaller companies. Their business model just doesn’t work for those clients. Whereas the onshore industry is relevant for SMBs since it dials down the level of complexity.’”

“Debashish Sinha, CMO of Systems in Motion, maintains that the onshore industry can be cost-competitive. ‘You can’t think solely in terms of wage rates, but total cost on an outcome basis’, he says. ‘Productivity of an offshore resource can be 25-50% less than a US-based resource. So while our wage rate may be higher, when you consider efficiency and hidden costs, we’re actually very competitive’. His point is helped by the appreciation of the Indian rupee this quarter (3.5% against the dollar).”

Read the entire article:
http://www.nearshoreamericas.com/u-s-sourcing-firms-reverse-offshoring-trend-3240/3240/

Trackback URI | Comments RSS