A few years ago, outsourcing revolutionized the IT services market with promises of cost reduction and greater efficiency in operational areas that occupied the management attention of core areas. Today, outsourcing is completely assumed by managers as a way to optimize technological strategies and open paths to the digital transformation that everyone is talking about, empowering the growth of companies through innovation. Outsourcers are no longer an option to manage routine operations but business partners with an active participation in the company's vital processes. Managers want outsourcing providers to add value to the operation and help them transform their products and services and innovate business processes.

Currently, it is possible to establish agreements with outsourcing partners for most business areas, and many advantages are associated with this form of partnership management, from access to state-of-the-art technology and innovation, increased flexibility and efficiency, to risk reduction, namely in compliance and security issues, among others.

With an effervescent digital transformation and increasingly aggressive competitiveness, the demand for more and better IT partners that provide all kinds of human and technical resources and innovation continues to grow at a good pace. It is up to each organization to decide the best model for outsourcing part or all of its services. Managers may conduct the strategy following three types of outsourcing: Onshore, Nearshore, Offshore. And put in the balance what each one has of best. Of course, the decision should always be made according to your needs and expectations to ensure the growth and sustainability of the business.

Onshore vs Nearshore vs Offshore

- Onshore - onshore outsourcing is done locally in the market where the company operates. With this step, the client company can more easily align itself with the service provider, keeping close control of the whole process and quickly applying new changes, if necessary, but with a less competitive price compared to offshore and nearshore.

What are the main benefits of this model?

No barriers: both parties are located in the same country, so there are no cultural, legal or language barriers, making the communication process with resources and teams faster and easier.

Supporting the local economy: keep outsourcing services inside the country is positive for the national economy and for the development of companies. This way the supply/service chain is easier to manage.

Greater proximity: the client and the provider's teams can hold regular meetings throughout the working week, without the need for long drives.

- Nearshore - Proximity is an important factor for those looking for a nearshore outsourcing partner. The traditional drivers of nearshoring are cost, time zone, compatible culture, data security and regulatory pressures, which give the client a sense of greater stability.

What are the main benefits of this model?

Lower costs: choosing nearshore normally involves selecting a partner located in a country where labour costs are lower, without compromising the qualification of remote resources. It is a popular way of reducing costs.

Geographic proximity: neighbouring countries usually have common cultures, both in the way of thinking and working. Likewise, they are located in the same time zone, and even if there is a time zone, it should not be more than 1 or 2 hours, so it is not a problem. This proximity also serves to maintain contact between the two parties in a more assiduous manner, without the need for long and costly journeys.

Qualified resources: by delivering some of their processes in the hands of a partner, the outsourcer will ensure the qualification of the remote professionals who will guarantee the company's processes and the fulfilment of the objectives.

- Offshore - choosing an outsourcing partner in a distant country is the strategy for many managers, especially since technology has reduced distances. With this option, they seek to further increase cost reduction with specialized teams. But this model brings different challenges compared to onshore. The long distances that separate the both parties and the possible time differences and cultures must be well analysed.

What are the main benefits of this model?

 Cost reduction: with this model, you can look for a partner that guarantees the operationality of the processes for less cost.

 Highly qualified resources: as a general rule, these highly developed countries have highly qualified resources and offer the best balance between costs and qualifications in the performance of certain operational functions. India is an example of those countries.

 Focus on core business: this option allows managers to focus on the core business and hand over to partners the tasks that do not require much follow up, freeing up senior management time to concentrate on the development/expansion of the business.

 Notwithstanding the characteristics and advantages of the various types of outsourcing, it is important for companies to bear in mind that there is no one size fits all choice. Each company has its needs and objectives, and it is according to these, as well as the available budget, that they should select the type of outsourcing that best fits their strategy.