Offshoring may not be working, at least that's what some end users are saying. A recent CBS news interview with Boston Consulting Group managing director Hal Sirkin suggests that the previously claimed benefits of offshoring may not actually be accurate. The interview, which every MSP and customer should watch, is a great testimonial by an executive that recognizes the shortcomings of offshoring, or more precisely, that offshoring is not ideal for every situation.
For a number of years now the offshoring debate has been leading many to express similar beliefs about the limitations of offshoring. But the interview underscores an even larger trend that is very promising for the professional MSP community. Nearshoring or onshoring (whichever term you prefer) is the practice of outsourcing locally. This practice is picking up considerable momentum, particularly amongst end-users who have had experience in outsourcing beyond the shores of their country. Companies like Boston Consulting Group have learned that the benefits of offshoring are not only not benefits, but they could actually be negatives.
So, what are the specific areas of concern with offshoring?
- Cultural differences
- Language differences
- Time zone differences
- Data privacy and other IT related laws that may make doing business in that country more challenging
Now, for the disclaimers. Many end-users and MSPs do effectively use offshoring but I can tell you that those instances are in the minority and those companies all employ very tightly controlled models of offshoring to ensure that the offshore partners are held accountable. More importantly, offshoring does not mean the same thing as outsourcing. In fact, IT outsourcing, or more precisely managed IT services, is a great business model for accomplishing IT objectives that would otherwise be cost prohibitive or not practical if done in house.
What I found refreshing about this video is that a fairly large corporate executive is drawing attention to offshoring and suggesting that there are better onshore alternatives. To me, we in the managed services profession have been waiting for the mainstream press to start paying attention to this message.
