April 01, 2005
Nearshoring Offers 20-30% Savings in Labor Costs
Consulting firm KPMG released a report indicating that annual costs for a 110-person software firm would be around $8 million in Halifax Nova Scotia, $10 million in Boston and $11 million in New York. While the numbers aren't as stunning as the savings available for companies who can transfer work to places like India or China, annual costs savings of 20 to 30% may mean the difference between profitability and unprofitability for many firms. For many companies who require services done in their same time zone, or by providers who are culturally and linguistically closer to Americans, near-shoring to places like Canada and Mexico is an attractive option. Contact Center Today Reports:
Nearshore has a role to play for a company in its ongoing outsourcing portfolio. Things that are more risky, things where you want a lot of control, are likely to end up in Canada," Vashistha says. "So you may take application support and maintenance offshore, whereas you may take application implementation and keep it onshore. You may take remote network monitoring offshore, but you most likely won't take data centers offshore, though you may take them nearshore to Canada."
Read More: Offshoring Closer to Home
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