As a technology leader immersed in IT consulting, I find myself reflecting on Gartner’s latest 2024 Forecasts of IT Spending. The projections indicate a noteworthy growth of 6.8% this year, a significant uptick from the 3.3% observed in 2023.
This part of the announcement gave me pause:
Even with the expected regained momentum in 2024, the broader IT spending environment remains slightly constrained by change fatigue. Change fatigue could manifest as change resistance — with CIOs hesitating to sign new contracts, commit to long-term initiatives or take on new technology partners. For the new initiatives that do get launched, CIOs require higher levels of risk mitigation and greater certainty of outcomes.
The uptick in spending will likely result in many organizations considering the offshore model with its primary advantages of providing short-term cost savings and certain economies of scale, assuming successful delivery. Yet for an organization experiencing change fatigue, the risks associated with offshoring become pronounced.
At Object Computing, we ask our clients to consider certain pivotal areas when they initiate any project, offshoring or otherwise. These are particularly critical for an organization feeling change fatigue, and they reflect many of the reasons that we primarily choose to deliver our consulting and services practices without engaging offshore organizations.
#1 Effective Communication
In the intricate world of technology, communication is paramount. The strongest technical leaders excel not only in their expertise but also in their ability to communicate effectively. Proximity, facilitated by shared or similar time zones, ensures real-time communication between development teams and clients. This minimizes delays and fosters seamless collaboration, allowing for prompt issue resolution and agile project management.
#2 Talent Retention
The allure of short-term cost savings from offshoring may be overshadowed by challenges in talent retention. Offshore workers might lack the incentive to stay long-term, resulting in frequent team changes that disrupt project continuity and compromise overall work quality.
#3 Direct Oversight
Physical distance and time zone differences can hinder a client’s ability to directly oversee offshore development teams. Establishing mechanisms for project monitoring, quality assurance, and timely issue resolution becomes imperative to ensure confidence in the project’s progress.
#4 Collaboration and Knowledge Sharing
The most agile organizations leverage consultants to enrich their talent pool. Face-to-face collaboration fosters mentorship and knowledge sharing, which is essential for addressing complex project requirements and building robust working relationships. Proximity enables faster problem resolution and deeper understanding.
#5 Regulatory Environments
Concerns about security and regulatory protocols are paramount. Nearshoring to countries with similar regulatory environments simplifies legal compliance, reducing the risk of misunderstandings and legal complexities. This alignment ensures smoother project execution.
#6 Skill Sets and Quality Standards
Collaborating with teams possessing similar quality standards reduces discrepancies in the delivered product. This alignment is crucial for successful collaboration, ensuring that expectations are met.
#7 Mitigating Risks: Security, Quality, and Cost Considerations
Addressing data security and intellectual property concerns is pivotal. Clear contractual agreements and robust security measures are essential to safeguard sensitive information and proprietary technologies. While offshoring may offer short-term cost savings, careful evaluation of total costs is crucial to avoid budget overruns.
The quest for certainty in an ever-evolving tech landscape is understandable. Change fatigue and constrained budgets necessitate higher levels of risk mitigation and certainty. By considering these points while evaluating offshoring, technology leaders can foster successful collaborations and achieve desired outcomes in an uncertain world.
Garey Hoffman is a Partner and Vice President of Engineering of Object Computing. Hoffman plays a pivotal role in overseeing and driving the technical aspects of the organization. He is involved in managing a team of skilled engineers, architects, and technical professionals to deliver quality solutions and services to clients. He is also responsible for aligning technical strategies with business objectives, ensuring the successful execution of projects, and maintaining a strong focus on innovation and emerging technologies.
