What is Near Shore?
There are many companies who go for outsourcing to meet their operational needs by outsourcing their contact center operations to onshore, offshore, or near shore locations. The decision on which type of outsourcing to choose is based on cost comparisons, proximity to their business location, and language or cultural considerations. It would be helpful to begin by defining the terms “onshore”, “offshore” and “near shore”.
Onshore Outsourcing: Outsourcing operations of the company to another company located in the home country or region. Companies can reduce labor costs somewhat and benefit from highly skilled labor with little or no language or cultural barrier, but the cost of such operations is high compared to offshore or near shore locations.
Offshore Outsourcing: Outsourcing the operations of the company to other companies that are located in a foreign country, and most likely have a different language and culture. Offshore outsourcing offers benefits like higher cost savings and access to highly skilled labor.
Near Shore Outsourcing: Outsourcing the operations of the company adjacent or nearby country having similar culture and language skills. Near shore outsourcing offers some cost savings over onshore and has the added benefit of proximity for more frequent site visits, while retaining a highly skilled labor pool.
Near Shore outsourcing is the practice of getting work done or services performed by people in neighboring countries rather than in your own country. There are many companies in the United States who outsource work to Canada and Mexico as they are geographically near to them and they get the resources required from there. The travel and communications are easier and less expensive when geographic proximity is less and there are likely to be at least some similarity between the cultures, and people are more likely to speak the same language.
Near Shore has a great advantage in reduced cost and reduced risk compared to the projects given to the companies in distant foreign countries i.e. offshore outsourcing. Most of the developed countries prefer to provide their outsourcing projects to the organizations in neighboring countries as they find it easier and less expensive. They desire to go for near shoring as the cost effective structures are available nearby than depending on offshore countries for their works done.
The near shore outsourcing has lot of benefits compared to the offshore outsourcing. The Outsourcing solutions provided by the near countries to their clients will not have much difference in their time zones and thus they can provide business process outsourcing services in the same time zone as their customers do. It helps to avoid problems evolve due to language, culture, legal affairs, infrastructure and technology. These benefits represent the most elemental form of value proposition for a near shore offering, since they are seemingly available for every company that establishes in a near shore location, and for a seasoned global sourcing professional can be easily justifiable. Thus, it is understandable to see many players jumping into the near shore bandwagon and claim the near shore value proposition.