Managed services encompass a range of IT services that can be provided by a dedicated company external to the organization. This business approach offers a number of potential options, including offshoring, onshoring, and nearshoring in Western Europe. Among these, nearshoring is currently the most popular choice. The report from Deloitte states:
57% of executives indicate a budget increase for Managed Services.
Managed Services is often connected to nearshoring for three main reasons:
- To streamline your IT operations.
- To reduce costs.
- To focus on core competencies.
Let’s examine each of these factors in more detail.
Nearshoring streamlines your IT operations
Reduced Time Zone Differences
Nearshoring to locations within similar or overlapping time zones minimizes communication delays and ensures real-time collaboration. This facilitates faster decision-making and problem resolution, leading to improved operational efficiency.
Improved Communication and Collaboration
Proximity to nearshore teams fosters better communication, collaboration, and understanding of project requirements. Regular face-to-face interactions, virtual meetings, and shared working hours contribute to building strong relationships and alignment between onshore and nearshore teams.
Access to a Skilled Talent Pool
Nearshore locations often offer a rich talent pool of skilled IT professionals with diverse expertise. This enables businesses to access specialized skills and knowledge required for their specific IT projects without extensive recruitment efforts or training programs.
Cultural and Operational Alignment
Nearshoring to locations with cultural and operational similarities ensures smoother integration of nearshore teams into the organization’s workflows and processes. This alignment fosters a cohesive working environment and minimizes potential challenges related to cultural differences.
Nearshoring reduces costs
Businesses are turning to nearshoring to cut down on operational expenses without sacrificing quality or effectiveness. Organizations can save a lot of money by using nearshore locations. Nearshoring helps reduce costs by:
Lowering labor costs at near-shore locations
Nearshore destinations often have lower labor costs than onshore locations. This allows businesses to hire IT professionals at competitive rates without sacrificing talent quality.
Keeping overhead expenses low compared to offshore operations
Nearshoring reduces overhead expenses related to office space, utilities, and other facility-related costs. This budget-friendly strategy allows organizations to allocate resources more effectively and focus on their core business functions.
Cutting down on IT support and maintenance expenses
Businesses can benefit from proactive IT maintenance and support services by partnering with managed service providers in nearby locations. These providers take care of routine maintenance, upgrades, and troubleshooting, so organizations can reduce downtime, improve system reliability, and avoid costly IT emergencies.
Nearshoring helps to focus on core competencies
Nearshoring offers companies the opportunity to streamline their IT operations and focus on their core competencies. Here’s how nearshoring can help you focus on your core competencies:
Flexibility to align IT resources with business needs
Nearshoring enables organizations to adapt quickly to change without incurring significant costs or resource constraints. IT operations remain flexible and responsive to changing business needs, allowing teams to focus on core business functions without distraction.
Ability to change with the market without paying more
By leveraging nearshore resources, organizations can easily pivot their IT strategies, introduce new initiatives or reallocate resources as market conditions evolve. This adaptability allows companies to seize new opportunities, mitigate risks, and stay ahead of the competition without incurring additional costs for hiring, training, or infrastructure investments.
Managed Services: Transforming IT Operations for Modern Businesses
The Deloitte report provides further justification for the relocation of Managed Services to a nearshore location:
- Increasing pace of technology and digital transformation 62%
- To gain access to new capabilities 56%
- Increasing and more complex cybersecurity threats 54%
- Business strategy and operating model shifts 38%
- Overall need to cut costs by 33%
- Lack of employee skills or training skills 28%
It’s becoming more and more common for businesses in the IT industry to bring their managed services closer to home, with Eastern Europe becoming a popular destination.
There are many reasons why this is a good idea. Eastern European countries, such as Ukraine, Poland, and Romania, have a lot of talented IT professionals who are excellent at what they do and speak English well.
Plus, these countries have competitive labor costs, favorable time zone overlaps with Western Europe, and a business-friendly environment that’s great for innovation and growth.
Nearshoring to Eastern Europe can be a great choice for many companies looking to optimize their IT operations and drive business success.
