On-shore Vs. Off-shore for ERP Implementations
February 16, 2023
The world is getting smaller, bringing in new opportunity to hire contractors overseas for your ERP implementation needs. However, there are certain pitfalls and risks that come with going off-shore - risks that aren’t quite as present with on-shore option. In this article, we pit on-shore and off-shore options head to head.
OSI is a global organization, with offices throughout the US, as well as affiliated companies internationally. We understand and appreciate how the world has become a lot smaller, and more interconnected.
At the same time, off-shore contractor ERP implementations have a difficult track record, and OSI is often asked to help mitigate project problems and address risks. Over the years, we have seen a few common problems, such as:
1. Communication challenges: Offshore staff may not be located in the same time zone or speak the same language as the rest of the implementation team, which can make communication and collaboration more difficult.
2. Cultural differences: Offshore staff may have different cultural backgrounds and work styles, which can lead to misunderstandings and conflicts.
3. Lack of local knowledge: Offshore staff may not be familiar with local laws, regulations, and business practices, which can lead to problems with compliance and operational efficiency.
4. Time zone differences: Working with offshore staff in different time zones can lead to delays and difficulties in coordinating meetings and project tasks.
5. Security concerns: There may be concerns about the security of sensitive data being transmitted to offshore staff, particularly if data protection laws and regulations are different in the country where the staff are located. This risk can arise if offshore staff are given access to sensitive data or systems without appropriate security measures.
To mitigate this risk, it is important to implement strong security controls, such as access controls, encryption, and regular security assessments, to protect against unauthorized access or data breaches. It is also advisable to have clear policies in place regarding the handling and transmission of sensitive data, and to provide training to offshore staff on how to handle and protect data.
In addition, it is important to ensure that offshore staff are subject to the same security standards and protocols as local staff, and to have a clear process in place for handling security incidents and breaches. By following these best practices, you can help to ensure the security of your ERP system and protect your business’s sensitive data and operations.
Why use on-shore?
On-shore companies are generally considered to be better for ERP implementations for a number of reasons.
Perhaps the biggest reason is that they are typically more familiar with local business practices, regulations, and cultural norms, which can make it easier for them to understand the specific needs and requirements of a company. This can be particularly important when it comes to ERP implementations, which often involve complex and highly customized systems that need to be tailored to the unique needs and processes of a particular organization.
Another reason why on-shore companies may be preferred for ERP implementations is that they are generally easier to communicate with and work with on a day-to-day basis. This can be especially important when it comes to working through any issues or challenges that may arise during the implementation process. On-shore companies are also typically more accessible, which can make it easier to get the support and assistance you need during the implementation process. The importance of language and cultural familiarity cannot be overstated- Onshore companies may have a better understanding of the local language and culture, which can be beneficial when implementing an ERP system that will be used by employees in the same region.
On-shore based companies generally are less expensive and more likely to be delivered on time than offshore companies in ERP implementations– This may seem counterintuitive– However, Offshore companies are more likely to over customize the solution. This is a result of taking a “Software development” approach instead of “Solving a business problem” approach in the project. Scope creep, training and change management risks are more likely outcomes, due to the incentives inherent in offshore company operations.
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