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Reshoring and Nearshoring: First India, Now the Philippines

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Reshoring and Nearshoring: First India, Now the Philippines

It was not that long ago when India was the dominant leader in outsourced help desk and call center services. The Philippines was also a strong contender, thanks to cheap labor and abundant English skills. Things are beginning to change, though. Companies are starting to rethink their outsourcing strategies to include both reshoring and nearshoring. The change is significant enough that the software development industry would do well to take notice.

In an August 23 piece published by Nearshore Americas, contributor Matt Kendall explored the shifting environment for call center outsourcing as it relates to jobs returning to the Americas from the Philippines. India has already gone through what the Philippines is seeing right now.

Comparable Price Points

Outsourcing call center and help desk activity was mainly a matter of pricing back when India was the world leader. Price points are still a prime factor, but things are evening out. Bringing call center activity back to the Americas is proving just as cost-effective as keeping it in the Philippines or India. The same holds true for nearshore software development.

Latin American countries like Colombia, Mexico, and El Salvador are now offering the same outsourced services at a fairly equitable price point. And when prices are comparable, clients are likely to consider other things as deciding factors.

English-Speaking Providers

Another big impetus for the offshore outsourcing of 80s and 90s was the availability of English-speaking workers. Once again, India and the Philippines were clear leaders. There was no shortage of local workers in both countries who spoke English perfectly, making it easy to set up call center operations.

The Caribbean and Central and South America have more than caught up on this front. Whether you are talking about software development or call center activity, there is now an ample supply of English-speaking workers from Mexico’s northern border down to the southernmost parts of Argentina. The language barrier is no longer a problem.

Proximity of Outsourcing Partners

With price points comparable and the English barrier no longer a problem, what’s left for clients to consider? According to iTexico, a Texas software development firm with a nearshore operation in Mexico, the proximity of a company’s outsourcing partners is now taking center stage.

As explained in Kendall’s Nearshore Americas piece, call center clients are looking to visit partners as frequently as possible. It is a lot easier to take a flight down to Mexico or Costa Rica than travel to the Philippines or India. Depending on departure and destination cities, flights could be as short as a few hours.

Proximity is important for software development as well. While most nearshore communications are handled via electronic means, clients and service providers frequently travel to one another’s locations for face-to-face meetings. It is a lot easier for a client to fly from Austin, Texas to Guadalajara, Mexico than for either one to travel across the oceans.

A Lot Going for It

The truth is that nearshore has a lot going for it. Companies looking to bring their call center activity and software development back to the Americas are looking to either reshore or find a nearshore partner. Both options come in at a competitive price point and with very few worries about language barriers. It then becomes a matter of proximity. Keeping things as close to home as possible is the trend.

First it was India, now the Philippines is following. Companies are beginning to see the benefits of bringing their call center and software development back home, which is something iTexico and its Mexican nearshore software development subsidiary are thrilled about.

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