The Negatives of Offshoring Could be a Boon to MSPs – The Complete Managed Services Resource

MSP News

The merits of offshoring have been long-debated, and according to some end users, the practice of offshoring to lower-cost geographical locations may not be working, according to a recent CBS news interview, referenced in a recent article written by the MSPAlliance’s Charles Weaver.

According to the interview with Boston Consulting Group, managing director, Hal Sirkin suggests that the previously claimed benefits of offshoring may not actually be accurate and recognizes the shortcomings of offshoring, or more precisely, that offshoring is not ideal for every situation.

While offshoring is associated with negatives, the trend toward offshoring business services jobs in the United States is not going away anytime soon, and will in fact accelerate during the next few years, according to a new study from The Hackett Group, which indicates that businesses based in both the U.S. and Europe will shed almost 4 million services jobs relating to IT, finance, procurement and HR by 2016.

However, as Weaver points out, the CBS interview underscores an even larger trend that is very promising for the professional MSP community. Nearshoring or onshoring, which is the practice of outsourcing locally, is picking up momentum, particularly among end-users who have had experience in outsourcing beyond the shores of their country.

“Companies like Boston Consulting Group have learned that the benefits of offshoring are not benefits, but they could actually be negatives,” Weaver said.

In particular, the specific areas of concern with offshoring include: Cultural differences; language differences; time zone differences; and data privacy and other IT related laws that may make doing business in that country more challenging.

While many end-users and MSPs effectively employ the use offshoring, those instances are in the minority, according to Weaver. In addition, those companies must also employ very tightly controlled models of offshoring to ensure that the offshore partners are held accountable.

“More importantly, offshoring does not mean the same thing as outsourcing. In fact, IT outsourcing, or more precisely managed IT services, is a great business model for accomplishing IT objectives that would otherwise be cost prohibitive or not practical if done in house,” Weaver reported.

The CBS interview highlights that there are, in fact, better onshore alternatives – a message that could help the managed services profession.

Edited by Brooke Neuman