Explore the Advantages IT Departments Gain From the Reshoring Trend

There is a growing trend of companies opening U.S.-based facilities to perform the work once done in foreign countries. The term used to describe a company moving services from a foreign country to the United States is “reshoring”; or “insourcing” if they never had a U.S facility before. IT departments of U.S. companies are actively watching this trend. America Reshoring IT Services

Before we can explore the advantages to the U.S IT market from this trend, let’s first look at why the companies that were once offshore are now moving their services to the U.S.

According to the Insights Report from Cassidy Turley there are several reasons for the trend of foreign companies opening U.S.-based facilities

  • Limited visas..
  • Excessive travel costs…
  • High shipping costs for finished products…
  • Proximity to prospective new clients…
  • Higher worker productivity…
  • Political considerations…
  • Labor unions…

When looking at the reason an IT department of a U.S. company would embrace this trend, three of the reasons from above are common advantages to both the provider and the customer. 

      • Proximity to prospective new clients – Residing in the U.S. satisfies the desire of some customers to have their service providers nearby.
      • Higher worker productivity – U.S. workers are regarded as talented and productive, and accepting of innovation.
      • Political considerations – Foreign providers of goods and services toU.S. clients are fully aware of the political backlash against outsourcing. Providing new U.S.-based jobs addresses that sentiment.

Then there is the issue of protecting intellectual Property. The Argument for ReShoring American IT, a white paper by PlanetMagpie refers to a 110-page IP Theft report produced in 2011 by the National Property Rights Information Center. “No one knows for sure how much IP has been stolen by overseas organizations. Business software piracy alone is estimated in the billions, according to Intellectual Property Rights Violations: A Report on Threats to United States Interests at Home and Abroad, The Planet Magpie white paper goes on to say “The report concludes with:“ This report has shown the consequences of IP theft are not limited to rights holders whose IP is stolen, but include threats to the public’s health and safety, national security and the safety of United States war fighters, the United States government from lost tax and customs revenue and misplaced jobs, and critical United States infrastructure.””

There are IT service providers that have never considered moving their services offshore because of the points raised above. Salvus Data, a Data Backup MSP specializing in TSM, is an example of a U.S. company in that category. The Salvus Cloud Management Model provides its customers access to a U.S. based D.O.D cleared team that manages business critical backup solutions. (For more information on Salvus Data Consultants contact  info@salvusdata.com Phone: 903-201-7233.)

Ed Frauenheim in his Workforce Post quoted Gad Levanon, an economist with The Conference Board research firm. “The nascent shift of work back to U.S. shores does not spell the end of offshoring. It’s going to be a gradual thing,” he says. “It will be more rare to see companies actually shut down existing, functioning operations in emerging countries.”

Although the trend of reshoring has begun, this does not mark the end of offshoring. However, because of this trend IT departments have more options to make informed decisions as to whether they will accept services being delivered from outside the United States or from within.

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One thought on “Explore the Advantages IT Departments Gain From the Reshoring Trend

  1. Pingback: Managed Service Outsourcing Back Onto American Soil - Salvus Data Consultants

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