Nearshoring is a phrase that arose from the practise of offshore, which is when corporations relocate their manufacturing operations to a lower-cost region than their home country. Offshoring and nearshoring are very similar in many ways. The contractor’s location is the only noticeable difference between them. For the most part, an offshore company is a large distance away from the hiring company. Sometimes it is on a completely different continent. With nearshoring, the contracted person or company is closer to the hiring company’s physical location. With outsourcing’s continued growth, the next wave is shifting to higher-level business processes that include knowledge as a fundamental component. Dubai has set its sights on joining the ranks of the world’s premier knowledge-based economies with this in mind.
Dubai’s economy has been enormously diversified during the last two decades, and the FTZ-concept (Free-Trade-Zones) has been applied for the IT-sector as well. The market has continued to grow, with IT investment estimated to reach USD 8.2 billion in 2023. For technical job categories such as Engineering, Data Analytics, or Software Development, Dubai has a highly educated, international workforce. Further, average IT-related salary in Dubai is lower than in most EU nations (about USD 3,130/month).
Dubai Outsource City (DOC) was established in 2007 to meet the growing demand for outsourcing services, and has since evolved into a high-performing business park dedicated to both local and international outsourcing firms. Business Process Outsourcing (BPO), Human Resource Outsourcing (HRO), Information Technology Outsourcing (ITO), back office, and call centre operations are all supported by DOC. For enterprises looking to set up shop in a UAE free zone, DOC provides a comprehensive, purpose-built infrastructure.
Benefits of setting up a company in Dubai Outsource City includes 100% tax free environment for 50 years, 100% foreign ownership, no restriction on profit or capital, repatriation, stringent attrition law, reduced real estate cost, and “One-stop shop” of administrative services.
There are numerous benefits linked to nearshoring IT services. Reduced costs are one of the most significant advantages of outsourcing and offshore operations. As the market evolves, however, lower prices will no longer be the primary criteria that organisations consider when selecting offshore/nearshore suppliers. Other nearshoring benefits like as work-friendly time zones, english speaking skills, and improved cultural understanding will become more valuable.
Increased threats from cybersecurity attacks are one of the main risks associated with a shift to distributed teams. Organisations lacking the internal resources to provide increased cybersecurity protection would likely seek out specialised offshore/nearshore suppliers.
Top Trends in Nearshoring being witnessed in the Middle East
» Customer Experience: With good reason, companies are devoting more time and resources to improve customer experience (CX). According to a recent PWC survey, 73% of people consider customer experience to be a significant component in purchasing decisions, and a third of customers are likely to abandon a beloved brand after just one unpleasant experience. As small firms seek cost-effective solutions to significant CX challenges, this might be an important area of growth in the nearshoring sector.
» Automation: Automation and hyper-automation have been around for a while, but they continue to evolve and appear in new technologies on a regular basis. Beyond digitization, business IT automation is important (migrations from analogue to digital environments). Nearshore organisations are always looking for innovative ways to eliminate human intervention by speeding up the delivery of IT infrastructure.
» Virtual Desktop Infrastructure: Another sort of technology that works well with nearshore operations is virtual desktop infrastructure (VDI). Simplified IT management, increased control, flexibility, cost savings, and support for remote workers are just a few of the benefits of virtual desktop architecture. As more workers work from home and other non-office locations, the adoption of VDI is on the rise. Even though i is not a new technology, it is gaining popularity among organisations searching for nearshore services.
» Company Culture & Integration: Organizations in the region are rethinking on how to support employee wellbeing and motivation as they adjust to hybrid and remote working arrangements. Organizations will need to put up frameworks to guarantee new team members are seamlessly absorbed into the local company culture.
» Increased use of Remote Work Tools: The age of Zoom and Slack is just getting started. Many firms were required to swiftly acquire collaborative software and tools to continue operating amid lockdowns because of the pandemic. Others are turning to augmented reality (AR) and virtual reality (VR) collaborations to bring people together and work on projects. These are some of the technologies which are going to be widely adopted by organizations across the Middle East to increase productivity in the age of remote work.
» HR Tech: The current HR outsourcing trends are shifting away from transactional engagements and toward more strategic partnerships. Companies are searching for partners who can assist them achieve their business goals to get the most value out of an HR outsourcing contract. Several causes are driving this change, including the need to cut costs, increase efficiency, and gain access to specialised skills and resources. Another HR outsourcing trend being witnessed in the region is the increased usage of cloud-based solutions. This enables businesses to use HR outsourcing services from anywhere in the world without having to invest in or maintain their own infrastructure.
» 5G Adoption: When 5G was first introduced, it was criticised for having a relatively limited availability. However, the technology is now gaining popularity and nearshore firms offer 5G which includes high speed, high capacity, high bandwidth, low latency, and minimal tower congestion. Higher efficiencies in administration, troubleshooting, deployment, and correspondence are all possible with this technology. One of the top priorities for nearshore enterprises based in the Middle East is the adoption of 5G technology.
Nearshore teams are an effective way for businesses to scale up or down on demand. Working with a nearshoring partner rather than assembling own team is significantly more viable in most circumstances. In addition, one of the most significant advantages of the nearshore company model over the offshore business model is time zone.
Way forward with Xebia
» Xebia Middle East adds value to businesses by leveraging the latest technological trends to develop solutions that address their needs in the areas of digital strategy and transformation, platform engineering and continuous delivery, big data, AI and Machine Learning, low code software platform delivery, cyber security, product management, and quality improvement
» Xebia improves the alignment between the organization’s business and IT through Business Agility and Design Thinking, resulting in a responsive and sustainable digital operation
» Its goal is to implement an AI strategy based on Big Data, AI, an machine learning. This helps develop production-ready AI solutions by establishing a close connection between the organization’s business and data science teams
» Xebia assists its clients in the design and development of low-code software platforms and applications
» It has all areas of its software requirements covered, whether it be software development, digital assurance, testing, or security. It has certified personnel for both Microsoft Solutions and SAP Implementation, so it can assist in the implementation of solution architectures in both Microsoft Solutions and SAP Implementation, depending on the company’s needs
» Xebia Middle East is a one-stop shop for full stack digital transformation, from strategy to technology implementation. It offers cutting-edge solutions and services to assist businesses in becoming digital winners