Is outsourcing to nearshore destinations a happy compromise for local government?

The government needs to cut costs across the public sector. Nobody is safe.

Local councils could soon have services delivered from locations thousands of miles away.

It’s hard to picture local services being delivered at the other side of the world but cost cutting pressure might make this a serious consideration.

Perhaps offshore destinations might be a step too far and nearshore destinations such as Ireland and Scotland might be seen as a happier compromise.

Director of UK Public Sector at Dell Services Tim Sheppard believes so. IO would be interested in hearing people’s views.

He said: “With stringent government cuts imminent, we have seen the likes of Northamptonshire and Cambridgeshire County Councils sign long term framework deals for the services of an ITO provider, costing between £70.5 million for their IT services. With many of these services certain to be offshored to destinations far and wide, the classic offshoring versus nearshoring debate is re-emerging. Many organisations including ourselves, provide both near and far offshore locations.

While one cannot deny its benefits, offshoring is not necessarily the best strategy for local government and careful consideration needs to be taken before any rash decisions are made. Some councils are just not suited for offshoring, with aspects such as staffing and local culture posing obstacles that could cause more harm than good. Furthermore, for certain tasks, offshore staff will simply not have the level of skill and knowledge required to complete the necessary local activities.

Therefore, it is my view that nearshore outsourcing holds many benefits to that of offshore outsourcing for local governments. The outsourcing solutions provided by the near countries such as Ireland to their customers will not have much difference in their time zones and thus can provide services in the same time zone as their customers do. It also helps to avoid problems that can evolve due to language, culture, legal affairs, infrastructure and technology. Furthermore with nearshoring, cost effective structures are available, so it becomes less expensive and easier to travel and communicate for the customer.”

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Er.. does Wales count as "nearshore"? We could certainly do with the work!

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For companies that are new to outsourcing and are still feeling jumpy about the whole thing, nearshore outsourcing is a good start if they decide to outsource continuously. The shorter distance makes coordination and integration of operations relatively easier.

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What I want to know is why such a high proportion of the UK IT industry is based in and around London. There's no reason why IT work cannot be carried out in places like the midlands, Yorkshire, Scotland, Wales, or Ulster. Some parts of the UK, including medium to large cities, are IT jobs deserts and were even before offshoring IT jobs took off in a big way.

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