Is Nearshoring The Answer For UK Brands Facing Uncertainty In 2019?

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There is still some boardroom uncertainty about offshoring from the UK. Some executives even think negatively about European nearshoring. But I believe much of the cynicism and paranoia about outsourcing from a remote location has to be reconsidered for a number of reasons. Let’s consider three for starters:

1. Brexit and the UK economy in general; nobody really knows how Brexit will impact the UK, but it is just 6 months away and there is still no government deal over trade between the UK and EU. No business leader can be comfortable with such uncertainty hanging over the British economy. Whether you support Brexit or not, every business leader needs to be planning for a situation where there may be a challenging economy in the UK for the next few years – because only planning for the sunny uplands would be negligent.

2. Industrial transformation; take a look around at what is happening across the board because of digital technologies. The entire publishing and media industry no longer knows how to really make money from news. Retailers are constantly reporting that the High Street is in terminal decline. Energy companies are facing price caps and customers who want more control and insight into their energy use. Digital disruption is pulling apart and reassembling every industry from banking to automotive manufacturing.

3. Digital Customers; your customers are constantly connected 24/7 and can read reviews, write reviews, post social updates and complaints, compare prices, and see what your competitors are doing before you know what they are doing. The customer today is entirely different today when compared to just one decade ago when we welcomed the first iPhone from Apple.
In short, there is a perfect storm developing in many industries where companies that want to deliver customer excellence in a challenging economic environment need to really start thinking about how they are structured and who they are partnering with.

If your profits are in decline because your industry is changing faster than you can manage then you need to start considering nearshoring again. I don’t mean just for the old traditional driver of offshoring – cost reduction – but for several reasons that address how business is operated and managed today:

Platforms: how are you delivering services? Are you using the cloud or app store and offering pay-as-you-go options or expecting customers to just keep on paying the way they always have?
Automation: Robotic Process Automation is becoming essential for almost every professional service. Can you compete with rivals that have entirely automated their processes?
Innovation: don’t expect your next big competitor to be from your industry. The cost of market entry has collapsed and small experimental companies can become big really quickly.
Flexibility: are you planning how to scale up or down in a way that allows you to keep delivering excellence to your customers?
Talent: in a challenging environment how can you access the best talent rather than just hoping that your internal team can keep on delivering with the skills they already have?

In fact, if you look at the latest report on outsourcing from Deloitte, they found that cost reduction is no longer even in the top five drivers for companies to be exploring outsourcing. It’s the changing nature of the economy and digital disruption that is forcing executives to seek out reliable partners who can advise them how to improve the experience their customers have with their brand.

For all these reasons, and more, I believe it is time for those who have expressed a certain cynicism about outsourcing and nearshoring from the UK in the past to start thinking ahead. Where is your industry going to be in five years? Actually, can you even survive the next two years without change? Can you really keep delivering for your customers the same way you always have given the changes we will face in the next 24 months?

Photo by Neil Howard licensed under Creative Commons.

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