Top 5 Nearshoring Trends for 2021

Ahoy there, this is Jordan from SnapStack Solutions and I am preparing you for the weekend with a different blog post for this week.

The outsourcing model has altered several global sectors since it gained prominence in the early 2000s. Whereas it was formerly viewed as merely a cost-cutting measure, it is now recognized as a chance for organizations to have access to specific talents and grow quickly. As the number of companies using offshore teams grows at an exponential rate, here are five IT outsourcing trends to keep an eye on in the next years.

1. Demand for cutting-edge skills is on the rise.

In 2020, approximately 40 million positions were vacant due to a worldwide digital talent shortage. Experts predict that during the next decade, this figure will rise to 85.2 million. If left unchecked, this will result in an annual revenue loss of around €7.1 trillion.

The fact is that Western firms are struggling to recruit engineers skilled in cutting-edge technologies like Machine Learning, Artificial Intelligence, and automation. Despite being the uncontested leader in technology, the United States may lose almost €136 million in income unless it can locate more talented tech employees.

Nearshore development: Is there a solution?

One of the most significant advantages of establishing a nearshore development team is the ability to tap into vast talent pools in developing tech nations.

As a result, one of the most important IT outsourcing trends in the future years will be the formation of specialized teams in countries such as India to meet the growing need for employees with cutting-edge capabilities. While technical abilities will remain the major focus, soft skills such as teamwork, communication, and leadership will be in high demand.

2. New spots in the nearshore

However, as the need for talented IT employees grows, more companies are shifting their operations to new offshore locations in Eastern Europe, America, and Asia. For instance, countries like Czech Republic, Poland, Romania, and Slovakia are on the rise in terms of nearshoring and we have been investing here in remote IT teams supporting a number of clients in these locations.

Moreover, an increasing number of English, American, Nordic and German clients are demanding nearshoring resources. Due to the shortage of highly qualified IT specialists, more and more companies that are looking for onsite, or local resources, are beginning to switch towards remote resources.

Different countries are ready to work with resources from other countries, and we, as a Czech company, are witnessing this trend being on the rise between our clients.

According to researches and news outlets, there is a shortage of around 14 thousand IT specialists in the Czech Republic.

Therefore in the past 2-3 years, we have been augmenting delivering teams in thеse countries, working on projects, and doing team extensions for our clients in the Czech Republic and other Eastern European countries.

The feedback has been great both from an economic as well as skills perspective

Despite the pandemic, enormous investments in the tech sector, particularly in Europe, were made in 2020. Eastern European countries such as Ukraine, Poland, Belarus, and Romania are already becoming popular nearshoring locations for Western European companies. Organizations are using the nearshoring approach to save money and acquire talent that they can\’t locate locally due to a small-time difference and cultural compatibility.

3. Improved data protection

Despite the fact that more organizations are forming internationally scattered teams, data security remains a key worry when it comes to outsourcing.

Nearshoring is still viewed by some organizations as exposing them to the danger of data theft and trade secret compromise.

As a result, cybersecurity for dispersed teams will be one of the most critical IT nearshore and offshore developments in 2021. The DSCI (Data Security Council India) Annual Information Security Summit in 2020, for example, covered a number of important topics, including the national cybersecurity policy, end-to-end encryption, data-driven organizations, critical infrastructure protection, cyber insurance, and more.

Things that have a rise in popularity would be cloud services and virtual machines. Basically, remote workers have access to the organizations\’ servers and the entire development is done on those servers. Thus, the risks are significantly reduced.

On the other hand, regardless of where their staff is situated, organizations are educating themselves on the core cybersecurity principles they must apply to reduce security risks and secure critical data.

4. Increased usage of collaboration apps

Collaboration technologies have helped numerous teams support one other in achieving common goals during the last few years. One rising IT outsourcing trend, with the growth of internationally scattered teams, is the usage of digital technologies as a bridge between local and nearshore teams.

Businesses that operate with a nearshore workforce may eliminate misunderstanding, time management, and expense concerns by implementing contemporary collaboration technologies.

When working with nearshore teams, some of the finest collaboration tools to consider include:

Podio is a project management tool that helps teams organize tasks and projects by combining material, context, and discussions in one location. Automated processes, linked CRMs, integrated chat rooms, data visualization, and task management boards are all included in the program.

Trello, one of the finest project management solutions for remote teams, builds a foundational project management architecture using a simplified kanban card-based approach. Individuals and groups may create task boards, track progress, upload files and photos, build custom dropdowns, and more.

Asana is a project management software that assists you in organizing your work into shared projects or kanban boards. Every team member, whether local or remote, has access to the various tasks and may see project milestones, discuss progress, define workflows, connect files, and expedite approval procedures.

5. Prioritize value above the price

Since the early 1980s, outsourcing has been on the rise. Today\’s nearshore development approach, on the other hand, is vastly different from the outsourcing model of decades past.

Offshoring isn\’t about squeezing the most money out of people. It\’s all about getting your hands on talented people who are specialists in their fields. While reduced operating costs remain a driving force for nearshore, companies are increasingly focusing on the value that a nearshore development team brings to the table.

Working with us a Czech company brings value to your organization and benefits you in so many ways. As the market develops, you\’ll be able to discover a lot more services for your IT project.

If you are interested in reading about additional reasons why to nearshore over employing, putting aside the shortage of IT specialists, check this document.

The need for a strong partner nowadays is more important than ever.

Allow us to assist you in augmenting your delivery organization for your project. Please contact us via social media or email at contact@snapstack.cz.

‍