March 31, 2005
Limiting Risk Through Nearshoring
Offshoring undoubtedly offers significant financial benefits for companies across a wide range of fields and sizes. Undertaking such a venture, however, requires a cost benefit analysis that includes downsides such a political instability, language and cultural barriers, and time zone differences. While over 75% of companies (according to recent estimates) have decided that the potential benefits outweigh these costs, many potential outsourcers would be willing to sacrifice some cost savings for significantly limiting their risk. This is the principle behind nearshoring, a form of sending operations offsite to nations closer (both culturally and geographically) to the source nation. Nations such as Canada, Mexico, and South America are benefitting greatly from the expansion of this practice. CIO Reports:
With nearshoring, the benefit of proximity is more than just working in the same, or close, time zone. For small projects that require close interaction with the company and its outsourcing partner, nearshoring is an excellent solution with less expensive travel costs and shortened travel time as an added benefit.
Read More: Is Nearshoring A Real Alternative to Offshoring?
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