Companies spend an average of 3.3% of their annual revenues on technology, or almost $1.5 trillion globally, and this percentage could rise to 5.85% by 2024 due to the growing importance of technology in corporate strategy (sources Deloitte). According to a Gartner study, global IT spending is expected to reach $4.5 trillion in 2024, reflecting an 8.6% increase on the previous year. Finally, 87% of executives consider technological innovation to be a strategic priority (source Splunk).
In this context, choosing the right strategies to optimize costs and improve efficiency is becoming a necessity. The use of nearshore service providers in IT areas such as infrastructure, cloud, web development and cybersecurity is an increasingly popular solution. This model offers an interesting alternative between traditional outsourcing, often associated with faraway destinations such as India or the Philippines, and the total internalization of services.
Find out why nearshore can be an advantageous strategy for companies.
Lower operating costs
This may seem obvious, but the first major advantage of nearshore operations is cost reduction. Indeed, service providers located in geographically close countries, but with lower salary levels, enable companies to make substantial savings on personnel costs. For example, destinations such as Tunisia offer competitive rates while maintaining a high level of technical skills, particularly in IT engineering.
Cultural and geographical proximity
The geographical proximity of nearshore service providers facilitates collaboration and communication. Time differences are reduced, enabling smoother interactions and real-time meetings. What’s more, cultural proximity fosters better mutual understanding, reducing the risk of misunderstandings and errors. For example, a French company working with a service provider in Tunisia will benefit from linguistic and cultural similarities, simplifying project management.
Flexibility and scalability
When it comes to resource management, nearshore offers a high degree of flexibility. Indeed, companies can easily adapt the size of their team to the specific requirements of the project, without having to worry about the constraints associated with recruiting and training new in-house employees.
This flexibility and scalability are highly appreciated in the IT sector, where technologies and requirements evolve considerably and extremely rapidly. One of the strengths of nearshore providers lies in the fact that they are often well-equipped to meet a wide range of demands, and can quickly mobilize specialized skills according to project requirements.
Access to specialized skills
As mentioned above, the IT sector is constantly evolving, requiring specialized and often rare skills. Nearshore providers can offer access to experts in specific fields such as cloud computing, cybersecurity or advanced web development. Today, Morocco, Senegal, Madagascar and Tunisia are of great interest to French recruiters in search of brainpower. There, you’ll find well-trained French-speaking engineers in large numbers. These service providers regularly invest in ongoing training for their teams, guaranteeing their mastery of the latest technologies and market trends.
Improving service quality
Generally speaking, nearshore outsourcing is perceived as a risk in terms of service quality. What may have been true a few years ago is no longer true today. Today’s nearshore providers rely on customer satisfaction to set them apart from the competition, hence a high commitment to quality and on-time delivery. There are, however, a few rare exceptions, such as cybersecurity, where certain positions specifically require accreditation and/or French nationality.
In addition, geographical and cultural proximity enables nearshore teams to integrate more effectively with in-house teams, facilitating project management and rapid problem resolution. Finally, to guarantee the expected level of service, companies offering nearshore solutions carry out delivery abroad, while retaining project management in France.
Safety and compliance
Near-shore can offer additional security guarantees. Geographical proximity enables frequent visits to the nearshore site, making it easier to control and audit processes. Similarly, close time zones facilitate real-time communication, which can improve coordination and responsiveness in the event of safety or compliance issues. Some nearshore countries may be subject to similar or compatible regulations (e.g. RGPD in Europe), making it easier to comply with local and international standards.
However, data processing can be a real strategic issue for the outsourcing company, especially if the nearshore service is provided in a country that is not governed by the same regulations. If the company wishes to have complete control over its data, the service provider will have to do everything in its power to ensure that data processing is carried out in the onshore country, thus guaranteeing full compliance.
Conclusion
The use of a nearshore IT service provider represents a winning strategy for companies seeking to combine cost reduction, service quality and flexibility. By capitalizing on the advantages of geographical and cultural proximity, companies can not only optimize their operations, but also gain access to a pool of specialized talent capable of meeting today’s technological challenges. This makes nearshore a viable and advantageous alternative to traditional outsourcing, offering a perfect balance between cost and quality.
