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The Rise of Nearshoring

talent

The Rise of Nearshoring

Understanding the Appeal of Nearshoring for IT Talent Needs

The IT and technology talent shortage is reaching a crisis point. As demand for skilled tech workers surges, supply constraints at home are making hiring difficult and expensive. This widening gap threatens to hamper innovation and growth across sectors.

Data shows that the global tech talent shortage could reach 85 million jobs by 2030. With roles staying open for months, project timelines suffer.

For companies worldwide, adopting global sourcing and nearshoring models has become mission-critical to access the talent needed to remain competitive. No longer can tech leaders rely solely on local labor pools to deliver.

Nearshoring provides the solution, empowering companies to tap into abundant tech expertise in closer proximity to home offices than offshoring. Leading organizations are pivoting to nearshore staffing to fuel growth and execute strategic initiatives in today’s constrained environment.

What is Nearshoring?

Nearshoring refers to outsourcing operations to third-party providers in close geographic regions with abundant talent pools. It differs from offshoring, which leverages far-away destinations like India and China. Popular nearshore locations include Canada, Mexico, Central America, and Latin America – all within similar time zones.

Advantages Over In-House and Offshore Staffing

Compared to domestic hiring, nearshoring opens access to wider talent sources unconstrained by local shortages. Communication and collaboration are easier than distant offshoring. Nearshoring strikes an optimal balance.

Lower Costs

Nearshore IT professionals often cost 30-50% less than U.S. counterparts with similar skills and experience. Higher output and efficiency also increase value. Nearshoring avoids productivity-draining lags prevalent in offshoring.

Faster Recruiting

Abundant tech talent in nearshore regions reduces hiring times from months to weeks. Rather than awaiting scarce local candidates, roles can be rapidly filled from expansive nearby labor pools.

Time Zone Alignment

Minimal time zone gaps allow seamless collaboration between nearshore and onshore team members. This facilitates effective integration and delivery.

Limited Infrastructure Needs

Companies can leverage providers’ existing nearshore delivery centers rather than building their own offshore captives. This saves costs and lead time.

Enhanced Quality

Top nearshore partners invest heavily in their staff. Robust training and engagement ensure highly skilled teams that excel at the latest technologies.

Optimized for Talent Acquisition Needs

For temporary staffing, nearshoring provides unmatched speed, flexibility, and integration. Teams scale up and down rapidly for project needs. Nearshore consultancies function as integrated extensions of core staff.

The Accelerating Shift Toward Nearshoring

The data shows nearshoring rapidly gaining preference as companies expand globally while needing to remain close to home offices.

For CIOs and tech leaders facing talent gaps, nearshoring represents a vital pathway to access in-demand skills and maximize capabilities. The advantages over onshore and offshore alternatives are clear.

Partnering with an established nearshore provider opens the door to flexible, specialized talent abroad quickly and cost-effectively. Companies can drive innovation and execute transformative initiatives fueled by global tech experts.

As talent needs arise, forward-looking companies have nearshoring in their sights. With a trusted nearshore partner, companies can confidently scale to meet today’s demands and tomorrow’s opportunities. Now is the moment to gain a competitive advantage through a nearshore approach purpose-built for modern tech needs.

Author Bio

Chris Cassidy is the Chief Executive Officer at Mojix, a a leader in real-time, item-level visibility solutions and human capital management for nearshoring IT development services that provide end-to-end business intelligence for supply chains around the globe. Mojix harmonizes data to provide traceability, product authentication and automated inventory management solutions that are built on a high security, scalable SaaS platform.

 

FAP

Supply Chain – Your TMS Isn’t Enough: Why You Need a FAP Solution

You’ve heard of a Transportation Management System (TMS). You probably have one. You’ve heard of Freight Audit and Payment (FAP). You may have a FAP solution or think your TMS is adequate as a freight auditor. However, a TMS and an FAP solution are each essential components in a tech stack of supply chain management tools. 

No single piece of technology is ever going to seamlessly manage all aspects of a global logistics operation with countless variables and complexities. But together, your TMS, focused on shipment execution, and your FAP solution, focused on post-execution activity, can work harmoniously to create a mature and successful logistics operation. 

Freight Audit and Payment Software Systems

To optimize your global financial supply chain process, a freight audit and payment software system is crucial. Finding new efficiencies, ensuring compliance, and enabling cost reductions across your global transportation spend are just some of the valuable products of a holistic freight audit and payment system. However, achieving end-to-end visibility into your global transportation spend demands a sophisticated partnership with your freight audit and payment provider. 

Read on to learn more about freight audit and payment and how your FAP system can work alongside your TMS.

History of Freight Audit and Payment

Prior to 1980, the transportation industry was strictly regulated, so payment terms were cohesive across the board, and freight invoices had to be paid in a matter of days. When the industry was deregulated in 1980, logistics services changed, and shippers and carriers could negotiate the terms of their freight bills. This made the freight payment process more complex, and as technology has advanced over the past few decades, the need for a comprehensive freight audit has increased.

Technology for Freight Audit and Payment

When a more robust freight audit is performed, the amount of data gathered regarding a company’s transportation spend is significant. A powerful freight audit and payment provider can then analyze that data to provide a wide range of business intelligence, including carbon emissions, carrier performance, and other important KPIs.

Transportation Management Systems

What is a Transportation Management System?

A transportation management system, or TMS, is a software solution that enables companies to better plan and optimize their global supply chain and logistics operations through multiple modes and regions.

The core functions of a TMS are:

  • Shipment execution
  • Load tendering to carrier/logistics service provider via electronic interfaces
  • Load optimization – i.e., consolidation of LTL to full truckload and selection of proper carrier and service
  • Software-focused – not sold as a managed service
  • Basic freight audit – electronic verification that contract pricing is correct

The Evolution of Transportation Management Systems

Transportation Management Systems have evolved over the last 20 years. In the early days of TMS, there weren’t many integrations available, and manual data entry was common. The advancements in the early 2000s allowed TMS providers to serve not only shippers but brokers and third-party logistics providers (3PLs) through the same applications. When cloud-based solutions became the norm, it became affordable and widespread.

Today, basic freight audit is part of many transportation management systems, though the data captured does not provide a holistic view of an enterprise’s total transportation spend across their global transportation network.

The Goal of FAP & TMS Systems

It is not possible to control or optimize what you can’t see. You can plan your supply chain and bring carriers on board, but without the data to benchmark performance and monitor compliance, you are unable to see opportunities for improvement or spot the nuances that can affect spend.

Your TMS is focused on getting goods out the door as efficiently as possible, as it should. In best-in-class operations, it’s up to the data capture and analysis capabilities of a freight audit and payment system to provide the intelligence – what was actually executed by the carrier, how much it cost, and to spotlight any problems or opportunities for improvement along the way.

While your TMS will assist in managing operations efficiently, the integration, usually via EDI connection, of an industry-leading freight audit and payment solution empowers end-to-end visibility to your entire supply chain, matching what was shipped (over multiple modes, channels, geographic regions, and carriers) to what has been invoiced, while identifying any outstanding charges or anomalies.

Automate the Capture and Standardization of Key Data

The key data captured by your freight audit and payment solution isn’t worth much if it isn’t standardized – ingested, cleansed, normalized, and connected from disparate systems – to provide you with centralized intelligence on your transportation spend.

No TMS on the market can perform these tasks end-to-end, making it imperative to have a freight audit and payment solution that plugs into your TMS and automates the capture of that data.

Benefits of Freight Data Capture by FAP

The benefits of performing regular freight audits often pay for themselves. A structured freight auditing and payments system provides ample opportunities to uncover problems that may have otherwise gone unnoticed.

Uncover Unnecessary Costs

Investing in a freight audit process that validates your freight data can uncover excess charges and allow you to assess what your actual costs should be. For example, a freight audit can detect unnecessary detention and demurrage charges, which are fees for storage and delays in the return of a container. Further, by cross-referencing all of the fees included on your invoices, a freight audit can alert a company’s accounts payable team to unexpected accessorial charges, such as reweighing, and better optimize your supply chain to protect against these charges in the future. The sooner you adopt a structured FAP system, the sooner you cut extra costs and improve your return on investment (ROI).

Reveal Missing or Incomplete Data

Establishing a solid FAP process as part of your supply chain tech stack uncovers potentially missing or incomplete data by providing end-to-end visibility into operations. For example, if you’re missing information about routing rules or approval parameters, catching that early and filling in the missing pieces can save time, money, and even contracts while improving your relationships with your carriers. With complete and accurate freight data, the visibility into your global transportation spend provides you with invaluable business intelligence, allowing your enterprise to take operations to the next level.

Increase Efficiency

The freight audit and payment process uncovers operational inefficiencies in your supply chain operation. For example, when you replace manual FAP processes with a tech-based solution, you can increase efficiency across multiple departments and your supply chain. More efficiency in the freight payment process allows your finance department to focus on larger issues. More efficiency in your supply chain means lower transportation costs and even lower carbon emissions due to route optimization. As they say, time is money. Allowing team members to focus on core service issues is a better use of their time and, subsequently, better for your bottom line.

Future Proof Against Invoice Errors

Freight billing errors are inevitable – some estimates say up to 25% of freight invoices have errors – but uncovering them allows your company to address the issues and rectify them before larger problems emerge. If your internal FAP solution is properly auditing all invoices, you can quickly calculate shipping costs, see and pay freight bills on time, and streamline payment services. The key to preventing future invoice errors is to catch them early and determine the root cause. Then, you’ll have the chance to optimize logistics operations and make corrections for the future.

Author’s Bio

Chris Cassidy is the chief revenue officer for Trax Technologies, the global leader in Transportation Spend Management (TSM) solutions. Trax elevates traditional Freight Audit and Payment (FAP) with a combination of industry leading cloud-based technology solutions and expert services to help enterprises with the world’s more complex supply chains better manage and control their global transportation costs and drive enterprise-wide efficiency and value.

audit

Drive Efficiency and Savings with your Supply Chain and Freight Bill Audit Solution

The chaos and uncertainty of the global supply chain throughout the past two years has brought the importance of an optimized logistics operation into sharp focus. As transportation costs soared, many executives paid close attention to the effects of the supply chain on their bottom line.

To gain end-to-end visibility into your supply chain, you need a freight audit and payment provider that takes all the data from your freight bills and standardizes it – ingests, cleanses, normalizes, and connects it from disparate systems – to provide you with centralized intelligence and visibility for total transportation spend management.

Supply Chain and Freight Bill Audit Costs

Enterprise leaders need business intelligence to make informed decisions. Without a freight audit process, you have no visibility into which parts of your supply chain need optimization, which parts regularly accrue unnecessary accessorial charges, where you are being charged with incorrect rates, where you could use better route planning, and other crucial KPIs.

A freight audit and payment solution that automates the process of pulling data from every freight invoice across your global transportation network and compiling it into usable data is the best way to gain end-to-end control and visibility into your supply chain.

Freight Audits and the Transportation Industry

In 1980, the transportation industry was deregulated. Before that, freight payment terms were cohesive across the board, and each freight invoice had to be paid in a matter of days.

This changed the way logistics services were paid, and shippers and carriers could negotiate the terms of their freight bills. The freight payment process became more complex, and as technology has advanced over the past few decades, the need for a comprehensive freight audit has increased.

Freight Bill Errors

Accurate and timely accounting, reporting, and freight payment is nearly impossible – up to 25% of freight invoices are estimated to contain errors. With freight bill audit software, your organization can uncover improperly charged fees, avoid double paying invoices, and ensure carriers are paid correctly and on time.

The freight audit process provides your enterprise with more accurate carrier invoices. With accurate invoicing comes accurate data. With accurate data comes insightful analytics on the state of your transportation spend, allowing stakeholders to make informed decisions and track KPIs and other essential business analytics.

Freight Bill Auditing Challenges

Manual freight auditing necessitates a special skill set. Audit staff will need specific training and attention to detail, and they will need to have access to all original bills of lading and carrier contracts to crosscheck any rates, freight weights, and any errors.

When you partner with a freight audit and payment (FAP) provider, auditing becomes an automated process, improving your freight payment and total transportation spend data quality and efficiency.

New Shipper/Carrier Relationships

With recent global supply chain turmoil, shippers are currently experiencing difficult times. The shipper/carrier dynamic has shifted. For the first time in recent memory, the market favors the carrier. Carriers have more options and more power than ever in recent history.

Shippers are in a unique position, grappling with rising fuel prices, changing tariffs, capacity restraints, and unpredictable service. These factors can result in delivery delays, expensive spot transactions, and unhappy customers due to empty shelves and backorders. Further, shippers don’t have much leverage.

These aspects of the current market add up to shippers facing the challenge of keeping carriers happy. On-time freight bill payments to carriers are the best way to do so. Carriers are spoiled for choice, and if they are going to be paid late, they will prioritize other shippers without much thought, regardless of negotiated contracts.

Increasingly, carriers are demanding shorter payment terms, and shippers are having difficulty retaining capacity commitments from suppliers. This impacts shipper days payable outstanding (DPO) and working capital objectives, creating more financial risk.

Bottom line?

On-time carrier payments are imperative.

Freight Audit and Payment Software

Freight auditing software analyzes freight invoices for inaccuracies, ensuring you pay carriers on time, while ensuring you pay only what you were quoted in contract negotiations. You gain better visibility and control over the entire billing process and other aspects of business that affect your bottom line — cost allocation and timely accruals, for example.

When powered by a credible platform, freight audit and payment software gives you visibility into freight costs across your entire business operations, which can reveal smarter ways to maximize trade routing (also decreasing your carbon emissions and supporting your organization’s ESG goals) and predict future transportation costs.

 Auditing, Freight, and the Future of Supply Chain

Complete Freight Audit software, powered by Transportation Spend Management, empowers global enterprises with the predictive tools needed to future-proof transportation operations.

 Chris Cassidy is the chief revenue officer for Trax Technologies, the global leader in Transportation Spend Management (TSM) solutions. Trax elevates traditional Freight Audit and Payment (FAP) with a combination of industry leading cloud-based technology solutions and expert services to help enterprises with the world’s more complex supply chains better manage and control their global transportation costs and drive enterprise-wide efficiency and value. For more information, visit www.traxtech.com.