In today’s digital and tech projects landscape, driving on time resources to enhance project outcomes is key.
14 Dec 2023
- The Evolution of the Delivery Models
- Benefits of proximity models
- Challenges of Offshore Outsourcing and How to Overcome Them
- Implementing a Successful Delivery Model
- The Future: Global Talent Fuels Local Success
In today’s digital and tech projects landscape, driving on time resources to enhance project outcomes is key. In this sense, nearshore and onshore outsourcing have emerged as a strategic asset to to provide a great range of benefits, from cost optimization to scalability and agility. . At the core of this approach lies to empower teams with the right talent rapidly to achieve organizations’ local success.
Onsite, onshore and nearshore outsourcing models are a common practice. according to Forrester (2023) the CIO is a driving force of a company’s technology vision to achieve its business goals, and it is the structure of IT professionals those taking the lead to turn strategy into reality. This team will be in a mission to accelerate the business success. —Since the IT development today turns to happens at a rapid speed, the geolocalization for teams becomes key strategic competitive advantage. The attractiveness of the access to the right talent lies in many reasons than just access to digital savvy professionals from around the world. It’s also about introducing innovative methodologies and diverse perspectives into one’s business model, it is about to co-create and to co-innovate, as mentioned keeping the talent close which enables real-time collaboration and trust.
As global markets continue to integrate, the need for flexible and adaptable strategies becomes the most important thing. Nearshore and Onshore outsourcing underlines this need and highlights the importance of developing global proximity strategies that fit local success parameters.
Service provider delivery models are not a modern invention. Historically, businesses have long been looking for external partners to handle specialized tasks, allowing them to focus on their core competencies.
However, the speed of the technological pace reshaped the talent landscape and the rise of outsourcing delivery models. Companies manage to collaborate seamlessly with partners around the globe, across geographical boundaries, to keep up with the speed in order to get adapted.
According to a report from Grand View Research, the global business process outsourcing market size is anticipated to reach USD 525.2 billion by 2030 and expand at a CAGR of 9.4% from 2023 to 2030. This surge can be attributed to various factors, but the primary drivers include the search for operational efficiency, cost savings, and the ability to access specialized skill sets not readily available in-house.
As the numbers suggest, offshore outsourcing is not just a something temporary but a strategic move that has evolved and found its place in the modern business playbook, enabling firms to capitalize on global expertise while optimizing resources.
However, today, there is a shift towards of onshore, onsite and nearshore models (Forrester 2023).
The concept of proximity models has emerged as a transformative force, reshaping some of the dynamics IT delivery. Proximity models, such as onsite and nearshore approaches, are on the rise strategies for organizations in the search of optimal efficiency, communication, collaboration, safety, and trust-building among the IT teams.
Some of the pros to consider from these models are:
- Agile development: teams can deliver and work within the same time zones, thus the ability to address challenges on-real time contributes to project agility as well as the team cohesion and team-work satisfaction, which contributes to a more agile dynamics towards a successful deadline management.
- Trust building: Trust is a fundamental element of any partner relationship. Real-time conversations and the possibility of real face-time meetings enables trust and generates a positive dynamics flow for the whole team. Teams in close contact, tend to foster a better understanding, and a reduction of communication barriers.
- Responses on real-time allows to reduce the time of responses and issues resolution.
- Cultural Alignment: Cultural alignment becomes a natural outcome, enhancing collaboration, trust, and shared values, which are crucial for long-term partnerships.
- Access to a diverse talent pool: Nearshore delivery models often provide a rich mix of skills and expertise, enabling organizations to benefit from a broad spectrum of capabilities.
- Contribute to project stability: Working within the same geographical framework represent an asset of stability and allows a better decision-making and prevent the cost raise in the event of political uncertainty or any unexpected issue.
While considering these new proximity models, traditional offshoring services still represent an option specially when it comes to leveraging cost-effective global resources. IT executives will need to consider how these different models can co-exist. Operating within the same or similar time zone, offshoring model still represents an alternative with some cons:
- Access to Global Talent: One of the most prominent advantages of offshore outsourcing is the ability to tap into a vast pool of experts from around the globe. By looking beyond local or regional constraints, companies can collaborate with top-tier professionals, each bringing a unique set of skills, experiences, and cultural perspectives. This global collaboration not only enhances the quality of work but also introduces diverse problem-solving approaches.
- Cost-effectiveness: Financial efficiency is often a primary driver for businesses to consider outsourcing. What’s more, this cost-effectiveness doesn’t need a compromise in quality. Through rigorous selection processes and quality assurance protocols, firms can ensure that the outsourced tasks meet, if not exceed, their quality benchmarks.
- Flexibility and Scalability: Outsourcing provides businesses with a level of agility that’s hard to achieve in-house. As market dynamics shift or business needs evolve, companies can easily scale operations up or down without the challenges of long-term commitments or overheads. This flexibility ensures that resources are always aligned with current demands.
- Innovation and Technology: Through offshore outsourcing, businesses gain access to cutting-edge technologies without the strong investments typically associated with them. Moreover, they benefit from the expertise of tech savvy teams specifically ensures operations remain at the forefront of industry trends.
While offshore outsourcing offers benefits, also we need to consider the challenges than implies Recognizing and addressing the potential obstacles ahead is crucial benefit of full advantages of this strategy. Here are some of the most common challenges and ways to overcome them.
Operating across borders inevitably brings with it cultural and linguistic differences. These differences can lead to misinterpretations or misunderstandings in both business operations and interpersonal relationships.
Potential solution: Investing in cross-cultural training can help teams understand and respect diverse perspectives, ensuring smoother collaboration. Additionally, setting a common business language can bridge communication gaps. Regular face-to-face interactions, even if virtual, can also foster better understanding among team members.
Collaborating around-the-clock with teams spread across the world can be challenging often leading to delays and communication challenges.
Potential solution: Utilize scheduling tools that show overlapping working hours and plan meetings or collaborative sessions during these windows. Establishing a clear communication protocol, with set response times and regular check-ins, can also streamline operations. Some businesses also adopt a follow-the-sun model, where tasks move across time zones, ensuring continuous progress.
Ensuring that the outsourced work meets the desired standards is a primary concern for many businesses.
Potential solution: Implement robust quality assurance (QA) processes and regular audits. Clearly define expectations, deliverables, and quality benchmarks at the start of the partnership. Utilize technology like Adobe or SAP to facilitate real-time monitoring and feedback. Additionally, investing in training sessions for the outsourced team can align them more closely with the company’s standards and expectations.
While offshore outsourcing presents certain challenges, proactive planning and open communication can transform these potential roadblocks into opportunities for growth and enhanced collaboration.
The success of a delivery model venture often depends on the strategies implemented. Here are some essential tips to ensure a successful IT development delivery model strategy:
- Choose Right Partner: Conduct due diligence by checking references, reviewing past projects, and even visiting the vendor’s operations if possible. The decision-making process is not just about cost, but also about technology and industry expertise, infrastructure, brand, and reputation.
- Effective Communication: Clear and open communication is basic. Establish regular check-ins, feedback sessions, and update meetings to ensure everyone remains on the same page. Use collaborative tools and platforms that enhance real-time communication and foster transparency.
- Training and Onboarding: Even the most skilled teams may need guidance to understand your specific business model, culture, and expectations. Investing time in training and onboarding ensures the outsourced team aligns with your company’s objectives and standards.
- Clear Contracts and SLAs: Outline clear contracts with well-defined roles, responsibilities, and deliverables. Service Level Agreements (SLAs) are crucial to set quality standards and turnaround times, ensuring there’s no ambiguity in expectations.
- Use Technology: Harness the power of technology for project management, quality checks, and communication.
- Plan for Time Zone Differences: As previously discussed, managing time zones is crucial. Having a clear understanding of work schedules, holidays, and peak productivity hours of your offshore team can streamline operations and set clear expectations.
- Culturally Inclusive Approach: Embrace the cultural differences of your partner Celebrate their festivals, recognize their traditions, and encourage cross-cultural exchanges. This fosters mutual respect and enhances team morale.
The synergy between global talent and local success becomes increasingly bold when it comes to tech-led innovation and production. In this case, the rise of new delivery models allows new approaches to match need and the speed for the new frame of ever-evolving technology and the intensity of high-skilled talent to meet new competitive heights.
The ideal delivery approach for enterprises’ IT development model will not only increase the access to highly skilled digital talent but also, with a co-partner frame will foster innovation, flexibility to adjust the project demands, effectiveness and rapid onboarding to the business challenge while promoting diversity and problem-solving enrichment.
At VASS we make the complex simple. As a committed co-partner we ensure the agility of our partners operations thanks to 24+ years of expertise bringing successful talent as service models with a high-skilled capabilities and capacities portfolio. At VASS we operate with a proven and effective methodology and deep knowledge and technology expertise in end-to-end projects, from transformation to implementation in key industries such as Financial Services and Capital Markets, Energy and Utilities, Retail, etc. Based in 26 countries, with more than 4,700 experts, we have enabled IT development operations for hundreds of blue chips customers in more than 40 countries becoming a business driver.