The challenges of reshoring versus offshoring

It’s Friday and having just received my invitation to listen to a webinar from ‘Outsource’, I sat back and listened to the 60 minutes in peace with my door shut and no interruptions.

The audience were asked the following questions:

To what extent do you believe reshoring will affect your resourcing decision over the next 5 years?

  1. More common 53%
  2. Stay as now 27%
  3. Become less common 20%

The second poll was:

Which of the following is the most single important driver when considering reshoring delivery?

  1. Cost 30%
  2. Size of talent pool 35%
  3. State incentives 5%
  4. Proximity to clients/customers 25%
  5. Other 5%

Orange bus is a technical led organisation, have great people values, and are passionate about quality.

Software engineering is not an easy task, and to offshore any project or task you should really take into consideration what your company values are.

Mike Parker from Orange bus was asked of his experience when it came to offshoring and reshoring.

They work with various companies such as PHILIPS, SAGE, BARBOUR and PEARSON.
They are specialists in providing digital services, software and app development across the globe.

A decision was made early on that they would use Romania, as they already had a relationship in place with this country.
The idea was that they could utilise existing skills and experience and piggy back to get the business kick started.

Whilst they found that the skills and commitment to work were very good; they were not able to maintain the quality they required, and continually found they had to rework the job back in the UK.

Mike also said that they tried offshoring again 2 years later, this time to Sri Lanka. This time they made sure that they had the infrastructure in place, and even took part in the recruitment process via video link.

The team was fully trained and even a senior management team were recruited.
Again, there were positives and negatives that came with this.

The team was fully trained and even a senior management team were recruited.
Again, there were positives and negatives that came with this.

  • The main issue was that they were unable to do the work they were employed to do.
  • Quality of the work was lower than they expected it to be.
  • Level of management was increasing the cost.

In the end they could reduce the cost and increase the quality by reshoring back to the UK.

What is Reshoring?

Reshoring is when you return your offshoring project back into the UK.

What is offshoring?

Offshoring is the movement of a business process or function to a country outside of the UK.

What is Outsourcing?

Outsourcing refers to an organisation contracting work out to a 3rd party,

Final thought

Whether you are looking to reshore or offshore you need to have clear objectives in place.

Ask yourself this:

  • Does the company/country have the skills in place?
  • Can they live up to the quality of your work?
  • How are you going to train the team?
  • Are you jeopardising your reputation?

It isn’t always about the cost as we see in the poll; it’s about the people and the values they bring to your business. Be clear on what it is you want.

I would really love to hear your opinion on the poll that was run and what you feel about this subject and any experience that you have had.

To find out more or if you have any questions email: Jane Midwood at [email protected] or call 0118 919 5255.

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