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Near- and offshoring - why should you work with foreign companies?

In-house IT structures seem like an idea that would serve the company’s development best. Full control, free and efficient communication, influence over team building, etc. look as if they would trump any other solutions. But is it sensible and guarantees cost optimisation? Isn’t acquiring top-class IT specialists quite challenging? And doesn’t the strong development of AI, ML and robotisation pose a threat to the validity of building an internal team? The IT landscape is undergoing very dynamic changes, and the current effective structure might no longer meet market expectations any minute now.

These are just a few reasons why it is worth taking a slightly closer look at what the modern market offers, namely at outsourcing of services – near- and offshoring. Data for 2021 presented by Statista or GlobalNewswire only confirm the outsourcing trend, valuing this market segment at $400 billion and $320 billion, respectively. As it turns out, Poland ranks 8th among the top European countries in terms of the number of top-class programmers. It remains a very attractive destination for European countries, which continue to benefit from nearshoring-based services provided there.


Nearshoring and offshoring – what are their characteristics?

The opportunities that have arisen in relation to the rapid development of technologies have clearly shortened the distance between remote countries. Electronic mail or solutions such as Skype have made it possible to transfer business services offered in one country to the territory of another. Offshoring is the most economical outsourcing model. It allows for building entire business teams made up of full-time employees. The team can operate quite freely but remain under control thanks to modern technology. Thus, outsourcing many processes that would require the construction of expensive internal resources becomes possible. Due to the cost-effectiveness of offshoring, it is a great solution for small and medium-sized companies or startups that aim at cost reduction.

Nearshoring is yet another form of outsourcing. In this case, work is also outsourced to specialised service providers, however to those operating in countries located close to the service provider’s country. One should expect the costs of such a cooperation to be higher, but in return we have a partner in the same time zone, of the same culture characterised by greater flexibility. For example, CEE countries, including Poland, are becoming increasingly popular among Western European countries.
Another unquestionable advantage of nearshoring is that it provides control over the project and the cooperation between the companies will also run more smoothly.

Outsourcing based on this model is becoming particularly appealing to smaller and medium-sized companies that have already managed to emerge from their role as start-ups and have established themselves in the market, are continuing to grow and able to take advantage of nearshoring that maximizes business efficiency.

Cost vs. quality – which form of outsourcing is best for you?

The best option will vary depending on what is most important to a company in a given case. If the company is looking for the cheapest solution, it will most likely opt for offshoring. However, the relatively low hourly rates of employees operating in Asia alone do not make up the final cost of such cooperation. Costs related to travel or accommodation must also be taken into consideration. While innovative solutions bring distant countries closer, making cooperation possible regardless of the latitude, optimally effective cooperation will not be possible without mutual understanding of cultures, value systems or work styles. Thus, distance can translate into a better or worse knowledge of the market, as well as management of the risks associated with making the right business decisions.

While basic, automated activities do not require very advanced knowledge and should not be at the forefront of the qualities determining whether to undertake cooperation, the importance of these elements is gaining momentum when it comes to more demanding projects. For this reason, among others, Poland is becoming a growing power on the outsourcing map. Data presented by the United Nations ranks Poland 35th among more than 200 countries from around the world in terms of education. Admittedly, we are more expensive than Asian specialists, but the offered cost-to-quality ratio is significantly greater.

Outsourcing IT

Nearshoring – Poland as the most popular destination in Europe

Having recognised the potential that lies in the Polish nearshoring sector, western markets are looking with increasing interest at the work performed by Polish specialists. They appreciate the level of their knowledge, skills, and experience. Polish companies provide innovative BI solutions and implement them while relying on best practices and developed methods. The nearshoring partner Hogart BI, which specialises in modern business analytics, has been implementing solutions that develop international cooperation within the European borders since 2007. By binding their services to Qlik Sense and QlikView, they conduct comprehensive analyses, implement optimally adapted systems, provide comprehensive training and support in maintaining and improving Qlik applications and environments through regular audits. Hogart BI solutions have been successfully adopted in, among others, the pharmaceutical, jewellery, telecommunications and security industries.

It doesn’t come as a surprise that the Polish market for telecommunications and IT services continues to grow. On the other hand, for the past few years we have been observing a dynamic growth in exports of this economy sector. According to a report by Export Intelligence, the value of the industry’s exports nearly doubled between 2017 and 2021, from nearly 5.5 million to nearly 10 million euro.

The development of outsourcing is still ongoing, and we can rest assured that Polish nearshoring still has a lot to offer. Programmers working in Poland are creating perfectly development-oriented environments. We are ranked 11th on the list of the 50 most digitised nations around the globe. The cost of cooperation in relation to quality remains very appealing to European countries. Therefore, we should expect further dynamic development of this branch of nearshoring.



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