Global sourcing (either in-house or outsourced) for business and IT services is a critical component of an enterprise-wide sourcing strategy. Leveraging the benefits of offshore and nearshore business or IT services has become a “must have,” given the ongoing quest for talent and the business dynamics for specific skills, such as core systems (for example, SAP, Oracle, or a large base of package and custom applications). Disruptive systems for business differentiation and innovation demand newer, scarcer skills (for example, user experience design, digital, Internet of Things, cloud and artificial intelligence), which also impact enterprises’ offshore sourcing strategy considerations.
Biggest question to answer for IT leaders today is what is the “optimal team” required by blending resources from onshore, near shore, and offshore global delivery models to match the right expertise, to the right solution, for the right cost.
Managed Services Engagement Model
The important goal of this blog is to discuss about the varying differences between the post implementation support models available for clients for IT Managed Services. IT Leaders are continuously assessing a flexible and innovative “Right Shore” approach that will help them implement, maintain, and integrate their Applications and Technology environments while reducing your overall total cost of ownership.
Right Shore
“Right Shore” is the most optimal engagement model of services delivery approach for delivering consulting services that bring speed and cost efficiencies for companies and agencies implementing, maintaining, and integrating Applications and Technology solutions. A mix of Onshore, Offshore, nearshore can help provide services with expert representative’s availability with ‘follow the sun model’ around the globe.
To ensure standardization an assessment of formal certifications including PMP, SEI-CMMI, Six Sigma and ISO-9001 may ensure that projects are delivered with the highest quality while reducing risk.
Advantages of Right Shore Model
Although cost savings is a significant advantage of this “Right Shore” approach, there are many reasons to consider this method, including
- Superior Results – Experienced, skilled resources combined with a proven infrastructure and time-tested processes enable the construction of the best solution that balances cost, capability, quality, and response time.
- Faster Time to Market – “Follow the sun” delivery model and relationships across multiple business units across the globe allows to accelerate technology and application solutions.
- Reduced Project Risk – Proven tools and standards may facilitate a global delivery capacity and a single point of accountability to mitigate risks associated with managing the complexities of a global engagement.
Disadvantages of Right Shore Model
Multiple Owners – Unless driven by a “Single point of Contact” or a dedicated program manager, this engagement model can become painstakingly difficult to manage. One might have to explain their IT environment each time they engage with a different service representative. Only Mature service providers can ensure they stitch services seamless unified experience
Onshore
Onshoring is the outsourcing of your IT services to a local service provider. With this option, your company will receive outsourced IT support from a provider located in your country.
Advantages of Onshore Model
- Shared Language and Culture. Most companies who choose an onshore model do so because they know the service representatives have a shared culture with their customers. This eliminates language barriers and increases customer satisfaction.
- More Control Over Business. Choosing an onshore model allows businesses to more easily engage with the business and visit in-person as well. Though mature CIO’s today determine the services by the Processes and testimonials they get from peers.
- Higher Efficiency. Offshore models often have inefficiencies due to language barriers and physical distance from the company employing them. These problems are removed with the onshore model, making them more efficient and effective.
- Better Data Security. Running an onshore model can help you better protect your company from security breaches. Since you’re likely more familiar with your country’s privacy and data protection standards, you’ll know what security protocol and technologies will work best to keep your information secure.
Disadvantages of Onshore Model
- Higher Cost. The main drawback of onshore models is the higher cost. Employing people in the United States simply costs more. But the company may enjoy savings over time with the increased efficiency and ease of communication with the service provider.
Offshore
An offshore MSP is based in a far-away country. Countries in the US tend to outsource services to countries like China, India or an equidistant country. Acquiring a MSP provider’s services in a different time zone, offshoring can be extremely cost-effective due to lower labour costs, especially if you have 24/7 operations or a multi-national support requirement.
Advantages of Offshore Model
- Lower Cost. The main drawback of the offshore model for managed services is that they are more affordable than onshore. Because of differences in economies, the cost of handling offshore can often be half the cost of handling a call in the U.S.
- Bilingual Services. Offshore models can be found all over the world. Service representatives in these countries are often bilingual, and sometimes even speak three or four languages. In a multi-national scenario, service representatives who speak another language, it could be greatly beneficial to assess an offshore e.g English and Mexican.
Disadvantages of Offshore Model
- Language Barriers. The biggest concern is the language and cultural barriers that arise as a result of the service representatives being in a foreign country. Though customer service representatives may speak English, they still may have a hard time speaking conversationally and may not be able to stray from a script.
- Decreased Control Over Business. Offshore centers are harder to visit. Because of the distance, you may not have as much control over what is happening.
Security Concerns. Onshore models are easier to regulate and secure than offshore models. An offshore provider may not follow the same security protocol, which may increase the likelihood of a data breach.
Near Shore
Near Shore engagement model is wherein a company outsources to a neighbouring country within the same or close time zone. These countries usually have a time difference of not more than two hours.
Advantages of Near Shore Model
- Easier to engage: This setup makes communication as well as onsite visits much easier.
Disadvantages of Near Shore Model
- Higher Cost: Although of course, their rates cannot compare with the low-cost hourly rates of offshore companies.
Choosing the Right Managed Services Engagement Model
According to Gartner, By 2023, lack of skills and increasing complexity will force clients to seek smaller, more agile cloud migration partners. It’s important to survey all the possible choices, so you can compare one service provider with the other and select the one that best fits your needs.
In case you still can’t choose between onshore and offshore, nearshore or right-shore services, here’s a quick rundown to help you decide once and for all.
Proven skills and experience
- Good track record
- Specialized skills and certifications.
- Working on renowned IT monitoring & management tools and methodologies
- Accommodating Management
- The Right price
If you’re a company looking to maximize your budget, an offshore partner may be the best option for you. Experienced vendors will try to improve on the Quality of customer care, but you’ll be able to afford more expansive services and 24/7 care.
Companies that have a larger budget should consider using an onshore or near shore service models. This option will allow for greater control over the inner-workings of the provider and reduce problems related to cultural or language barriers.
By carefully weighing your options, you’re sure to find the right solution to fit the needs of your onshore and offshore projects.