Onshore is the new offshore
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Changing the onshoring vs. offshoring equation
Mike Cowden | April 8, 2016
Earlier in my career, I had an opportunity to work in Manila at a large consultancy where I supported clients in their global development efforts. In addition to experiencing the amazing culture of the Philippines, I was front and center as offshoring took hold. Companies around the world saw the promise of lower costs, easy access to skilled resources, and the opportunity to chase the sun with the utopia of a 24-hour operation. These promises, coupled with the pressure to drive growth through cost cutting, created momentum to move to offshore services and solutions with little thought for the long-term impacts on the ability to innovate to support the business.
Leveraging a global workforce, with or without the cloud, is still a key component of many strategic vendor strategies. But moving development, maintenance, and support offshore to using the lowest cost model often limits revenue growth. As companies begin investing in strategic initiatives to meet changes in technology, address the changing demands of the customer, or face a need to quickly respond to competition, many are finding it difficult to be truly innovative and agile without actually working together collaboratively throughout the work day. You don’t always need to be in the same room, but working in at least the same time zone leads to better communication, faster response times, and greater efficiencies. Being co-timed and co-located can help you get on the same page quickly from day one and allows you to iterate constantly and collaboratively. This is critical, as working on a solution without knowing how it fits into a company’s big picture leads to going down the equivalent of blind alleys during development and wasting limited time and resources.
Agility makes the difference
When I came to Slalom in 2011, I took what I had learned about offshoring and on-shoring and started applying it to our projects to help the clients we serve. At Slalom, we have built a unique model for resource scaling using regionally based software engineers co-located in US delivery centers.
Cloud and agile development are game-changers, enabling an incredible level of flexibility and collaboration. As a result, companies have been able to drive innovation and build solutions quickly and efficiently using a cloud-based, regional model to predictably deliver their most strategic initiatives and still leverage the cost benefits of remote delivery. Our national delivery team members include technically oriented US college graduates who are supported by seasoned Slalom leadership to deliver large, complex, strategic solutions. We offer the convenience of having resources located in the same time zone as our clients, who can work with them on the ground or remotely as enabled by the cloud.
We have found time and time again that during the initial building stages of a solution, being tightly integrated with our client paves the way for long-term success. Rather than trying to help them from halfway around the world, we often work side by side with our clients to enable them to quickly achieve their strategic goals and objectives. We find that this proximity helps them drive agility with solutions until they are mature and stable, and can be sent offshore to extend cost savings if appropriate. Applying each sourcing model in the right way to do the right work increases both efficiency and the value of a company’s investments.
The best of both worlds
During my time abroad, I learned some important lessons about strategic sourcing and offshore development specifically. As the technology and business environment evolves, the sourcing model must also evolve. It’s important for companies to consider more than just cost when it comes to choosing whether to offshore or on-shore solutions. Ultimately, on-shoring can help companies drive agility to support their most strategic innovation, without comprising quality for cost-savings. Using offshore partners for more predictable support functions can help companies cost-efficiently achieve their most strategic objectives.
Mike Cowden is the general manager of Slalom’s delivery network, a collection of regional delivery centers that create digital products and experiences for companies around the globe. Cowden has 25 years of experience helping companies solve complex technical problems and maximize investments in people and technology. He thrives off building self-sustaining teams and believes that building teams around a shared purpose drives commitment, productivity, and passion.