- Written by Ariel Sztern
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Usually when we think about improving our competitive advantage as a Company, we think about doing something internal to change our positioning in the marketplace: to develop an innovative process or mastering a new technology to make the difference. While the traditional path to improve competitiveness is still the same, it's not the only approach. Organizations are increasingly using nearshore outsourcing to change their competitive landscape, reposition their companies, and transform how they do business.
Since some years ago, in the United States, the use of outsourcing has spread from national to global. For instance, in the ‘90, approximately 85% of all business outsourcing was attended in the United States for U.S. based companies, and much of the remaining outsourcing activity was provided in Canada. But that situation has changed. Today, nearly half of all outsourcing is conducted beyond U.S. borders. And that's no coincidence.
We can mention a number of ways in which nearshore outsourcing improves competitive advantage. We have already discussed about this in previous posts, and specifically about why Argentina is becoming an increasingly attractive destination to US businesses for offshoring Development services. Low-cost, highly skilled IT labour, almost no time difference, close geographical proximity to the USA, cultural affinity… In summary, nearshoring is usually introduced as a cost-effective and time saving strategic measure. Nearshore works to reduce costs, grow revenue, and introduce innovation.
Nearshore Outsourcing: A Lifeline in Today’s Unstable Marketplace
In the current economic situation, one of the most important things is to develop creative solutions to help companies get through the storm successfully. Most often these solutions involve cost reductions in the way business is done, and a common choice is to outsource IT functions or special projects.
However, instead of using it mainly for downsizing and reducing costs, outsourcing should be used as a strategic tool to deliver a forceful impact on corporate growth and financial stability. By outsourcing non-essential work, the corporation can free valuable resources and focus on its areas of competitive advantage. To achieve that goal, any organization must know its core competencies and manage the outsourcing process.
By working with a partner with the expertise and capacity to bring new products and services to market quicker, nearshore outsourcing offers organizations a way to speed their time in the market. Also provides the opportunity for companies to enter new markets quickly with an experienced partner. In addition, reducing investments in non-critical assets is a competitive advantage, nearshore outsourcing gives organizations the flexibility to act with low financial burdens and the ability to respond appropriately with available investment capital.
In short, an organization that decides it and is able to outsource, wins priceless time to create the skills that are the foundation of competitive advantage. Driven by this kind of thinking, nearshore outsourcing is becoming increasingly strategic and even transformational. Yes, the way how business is done is changing.
If we take the case of the Oil Industry, we know the recent and dramatic drop in the price of the barrel is spurring significant cost cutting in the oil and gas industry, resulting in some difficult choices for energy companies facing a new standard situation. Here is where nearshoring can be a lifeline for Energy Companies. The good news is that the oil and gas industry can take advantage of cost reduction tools and techniques, such as outsourcing and related cost optimization strategies, that other less-profitable industries have successfully used to create sustainable savings. And that is just an example.
Anyway, for outsourcing to make sense, the enterprise should be able to get the product or service done better, faster, and less expensive.
TISA Software offers nearshoring services in Argentina, combined with Houston based location.
To learn more about the benefits of working with TISA, contact us.
About Ariel Sztern
Ariel is a Software Engineer with more than 20 years of experience in Software Development with experience in managing projects in more than 16 countries
Nowadays Ariel is responsible for managing the operation in USA as President of TISA Software LLC.
Beyond his technical knowledge and passion for the technology Ariel enjoys watching the NBA and playing Ping-Pong, he also like sci-fi movies and was recognized as one of the 40 under 40 by the Houston Business Journal in 2014.