Right-Source Your Project

Carleton is an Associate Director Portfolio Management in Queensland, Australia.

For more than 20 years, projects have used outsourcing and, in particular, offshoring to obtain additional resources in everything from manufacturing to professional services. Programmers, manufacturing, builders…you name it, and somewhere there is a low-cost alternative to using your internal resources.

In this article, I describe current trends in offshoring and examine alternatives that can be used when offshoring is not desired—but a low-cost alternative is still required.

Offshoring and Nearshoring
The global economy has made it possible to select resources from almost anywhere. Several developing countries have pushed skills development in order for their people to be able to offer professional services using the home advantage of reduced labor costs. This trend has driven offshore outsourcing—or offshoring, as it is more commonly known.

The pitfalls of using cheap offshore resources are well documented. For every project that delivered great value by using cheap resources, there are others that struggled with different time zones, cultural differences or intellectual property control battles.

Nearshoring is a similar strategy in which resources are selected from the closest low-cost economic zone, the idea being to reduce the differences in time zone and culture. For projects that feature physical artefacts, nearby resources also mean …

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