Outsourcing Journal

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Home Business Is Everything In Order With The State Of Nearshore Affairs?

Contracting a Nearshore Partner sounds like a perfect solution to what is otherwise bound to become a strangling threat to the health and sanity of the German IT industry: The overwhelming demand for competent IT manpower inside Germany is met by a healthy and highly qualified supply of engineers, developers, project managers etc in its neighbouring countries – and in Europe as a whole. With the lessons learned from the „offshore adventures“ in Asia of 10-15 years ago, relations between German clients and nearshore vendors nowadays seem to be more mature, more sophisticated and more realistic in their nature than ever before.

Taking a closer look at these relations, we can identify two major areas of cooperation: The classic development services business, where specifications (of varying degrees of maturity) are being processed by a team of nearshore IT professionals (of varying degrees of competence and experience). The success of these constructs is invariably dependant on the experience and the effectiveness of the project and programme managers in charge on both sides – applying just the right mix of control and laisser-faire. The second area, and it seems to be on the rise, is the development of products and the joining of expertise and experience when inventing, creating and marketing digital products. A different set of qualifications is required from the nearshore partner, a closer cooperation with more physical presence and personal exchange between the members of the shared and distributed client and vendor teams. Where time-to-market is of the essence and the cycle of release, feedback and improvements is cut down to weeks or days, no time is to be lost between geographies, time zones or cultural gaps.

So, all is perfectly in order with the state of nearshore affairs? Quite to the contrary, at least if you ask your random German „Mittelstand“ (SME) player! From admittedly non-scientific research (but based on a rather large sample) the average German SME in the communications industry receives anywhere between 5 and 25 telephone calls per day soliciting external development services. Counting in the myriads of email marketing messages, it can be safely assumed that many hundred options for  external development services are presented to prospective German clients every month. And cited references don’t really help: In many cases, they‘re very valid – but mean little to the German decision maker. (A history of success with your client Gnarhskaya Sknajarshka Companyjia of Novosibirsk is not going to support your business case in Böblingen, Germany – however proud you -rightly!- are of it.)

What can be done about this double challenge of sales pressure on the German target market and the meaninglessness of vendor references? Since 2013, the 600 member-strong southwest German IT industry association „bwcon e.V.“ had researched the situation in their „Special Interest Group Globalisierung“. Consequently, a specialized external service offering was created by members of the group,  addressing the exact two challenges described above. With a quality audit based on criteria relevant to German clients, the privately held „BW Business Bridge“ (www.bwbb.de) has the mission to „separate the wheat from the chaff“ on behalf of German SMEs and identify the competent and presumably reliable players out there. And, since experience shows that it is not enough to be good at what you do, you also must make sure others know that – this „BW Business Bridge“ institution supports the market entry of the audited vendors with a market entry roadmap, a number of event invitations, network opportunities and  personal introductions – nationwide in Germany, not limited to the Southwest. It does so in close cooperation with the Outsourcing Association – profiting from the associations reach and reputation and hoping to contribute its quality values and certification experience to the Outsourcing Association‘s efforts.


This article was published in the “Nearshoring Europe Special Edition” of the Outsourcing Journal (Q4/15). You can download this edition free of charge via the website of the German Outsourcing Association (free membership required): https://www.outsourcing-verband.org/outsourcing-journal-special-editions/


Author: Till Hahndorf – economist and computer scientist by education, technology entrepreneur by experience and international cooperation architect by credo. Former consultant with Accenture and board member of a US/Asian software company (Allgeier Group). Accredited business coach on digital technology and entrepreneurship, member of bwcon coaching groups. Leader of bwcon‘s „Special Interest Group Globalisierung“, cofounder and board member of BW Business Bridge, evaluating and supporting foreign companies for the German IT market. Director of Sourceconomy GmbH, handling software development projects involving German clients and foreign vendors.

Contact details: Till Hahndorf,  Phone +49 (0)761 4589500, th@sourceconomy.com BW Business Bridge: www.bwbb.de