outsourcing software development

Towards a More Balanced Outsourcing Industry

date: 26 June 2012
reading time: 2 min

Over the past four months or so I have come across several pieces of research and also several opinion articles pointing to a growing trend away from farshore destinations in favour of nearshoring. April, Martyn Hart, chairman of the NOA, wrote a blog post about a trend towards onshoring and nearshoring in SME companies.

Over the past four months or so I have come across several pieces of research and also several opinion articles pointing to a growing trend away from farshore destinations in favour of nearshoring. April, Martyn Hart, chairman of the NOA, wrote a blog post about a trend towards onshoring and nearshoring in SME companies. Anecdotal evidence from consultancies like CapGemini, as well as the financial results of companies like Logica, are pointing towards this too. And the TPI Global Quarterly Index is also showing a decline in the large outsourcing contracts that offshore destinations excelled at. I believe this is for a range of factors that have been brewing for a while. The industry has matured: costs have been cut back as far as possible and customers are placing greater emphasis on requirements besides price, like skills and innovation.

Consequently, nearshore destinations become more attractive and more affordable for UK companies. To me this is another, exciting part of the evolution of outsourcing. While demand for farshoring remains, as outsourcing develops we are seeing more of an even balance in the shape of the industry. I have written a guest blog post about just this topic for Future Processing which you can read here or join in the debate with your own comments.

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