Near- vs. offshoring
February 27, 2009
Yesterday I set out to learn more about the difference between near- and offshoring in a ciklum’s short and sweet IT Seminar at Technopark:
Nearshoring: IT development is outsourced to Eastern Europe, time difference is not bigger than 2 hours, travel by plane not more than half a day, European culture, customer orientation, specs can be iterated, intellectual property is subject to EU law (not in Ukraine or Russia though), developers will also handle smaller packages, chance that internal staff will (like to) spend more time on-site is higher, lower costs than Switzerland, higher (direct) costs than in Asia.
Offshoring: IT development is outsourced to Asia, time difference is 4-8 hours, travel by plane 1 day, Asian culture, process orientation, detailed specifications required, no real IP protection, will work for bigger projects only, lower (direct) costs than in Eastern Europe.
Nils Granath from Swisscom Ventures
More interesting of course were the consolidated learnings. These are the ingredients of a successful nearshoring partnership:
Identify and start working with two trustworthy partner companies and a trial project, generally avoid companies that run own products, make sure that your team likes their team and vice versa. Appoint an internal project manager, deliver the full picture to the development team (vision, mission, user experience…), make sure that there is a good initial knowledge transfer, ensure an accurate planning, tracking and reporting, define clear goals and results, meet and commmunicate frequently, make sure that you get a clear development documentation, but probably most important of all: spend social time together and make them part of your own company!
Hendrik Bak from the Danish/Ukrainian Nearshorer Ciklum
Matt Colebourn from CoComment
Being a very happy Romanian/Lucernese nearshorer myself, I very much enjoyed to share your learnings – Thanks Nils, Matt and Hendrik.
One Response to “Near- vs. offshoring”
We are happy you enjoyed it. From Ciklum we are always happy to engage in a discussion about optimum IT development abroad, and sharing best practice from our customers.
Regards
Henrik