Onshore or Offshore for SAP Transformation?


Which Team Model Is Best for You?

As your organization prepares for SAP transformation to S/4HANA, you’re not sure how best to mitigate the risks of failure. You’re also questioning where to source tech talent for a successful and swift SAP transition.

You’re right to be cautious. The deadline for SAP transformation to S/4HANA has been extended to the end of 2027, with an optional extended maintenance until the end of 2030 – a clear sign that SAP’s 12 million users are struggling to transition swiftly.

Lidl canceled their SAP introduction after investing $500 million into it. This is only one example that highlights the difficulties organizations are having in successfully executing SAP transformation without hemorrhaging profits. Where you source your staff plays a pivotal role.

In this article, you’ll learn the pros and cons of onshore and offshore hiring to support your organization through SAP transformation.

Introducing a Wider Talent Pool for SAP Transformation

Whether you’re sourcing talent offshore or onshore, the key takeaway is that by taking advantage of both, you’re widening your reach to global talent to reduce risk and increase skills and pace to your SAP transformation. You’re no longer limited to a local, shallow pool of skills.

Tech is allowing every organization to reach out globally. The right people to support your transition to S/4HANA are available to you both offshore and onshore. Some will increase pace. Some provide specialty skills. Some are highly cost-effective. Knowing the pros and cons of each will help you evaluate and make a successful business decision.

Onshore Development – The Pros

Onshore development involves assigning local or native skilled professionals. It’s the more ‘traditional’ way to sourcing skills. Advantages include:

·      Direct Hire

Allowing hiring management to directly choose who they have on board (and who isn’t best suited).

·      Inhouse Training

Inhouse training can often be the preferred method by companies to ensure understanding is aligned with the business needs and mission, and to monitor and improve individual development.

·      Familiarity

Onshore teams tend to operate in teams with familiar systems and procedures, creating seamless work processes.

·      Ease of Management

Updates and changes communicated regularly, without complications or miscommunication.

Onshore Development – The Cons

Though onshore development appears to be a more ‘viable’ option, it does have drawbacks that must be considered:

·      Financial Burden

This includes the cost of managing employees as well as the cost of employment itself – generally higher onshore. Even developing an infrastructure to support and manage employees will have a negative impact on SAP transformation cost.

·      Reduced Performance

This is a potential consequence of financial burdens, with colleagues feeling pressured.

·      Increased Pressure

Without using offshore support in skills and/or manpower, onshore teams can feel the strain of meeting the deadline for SAP transformation.

Offshore Development – The Pros

Offshore development – sourcing hires from other countries – may seem like a logistical hindrance, but many companies are benefiting from the advantages it delivers in largescale transitions:

·      Wider Talent Pool

As we’ve already discussed, an organization’s reach can extend globally to the right people required

·      Cost-Effectiveness

A successful transition is one that also salvages and minimizes lost profits. Sourcing offshore will often give you the skills and staff numbers you need at more competitive rates.

·      Minimized Financial Burden

The strain of staff management costs and resources is minimized on the business and onshore teams, reducing pressure from costs already associated with SAP transformation.

·      Adaptability

Offshore teams are reliable in adaptability – a crucial element needed in SAP transformation.

Offshore Development – The Cons

The following disadvantages must be considered before deciding to offshore:

·      Hindered Communication

Despite tech assistance in connecting virtually, time zones and language barriers may create communication obstacles that may result in delays and potential miscommunications, and increase risk.

·      Technology and Infrastructure Available

Reduced or absent technical and infrastructural aspects is one of potential biggest setbacks.

·      Quality of Work

With no in-house management or training, work presented may be below standard and will require monitoring and evaluation to reduce risk.

Which SAP Transformation Staffing Is Right for You?

As you begin your journey in SAP transformation, you’ll need to consider all the pros and cons of both offshoring and onshoring. Of course, your business objectives and unique needs will guide you to advantages that are more crucial to your organization, and clarify how to mitigate the disadvantages of each model.

Both offshore and onshore development can pave the way through SAP transformation. Talk to TotalTek.

We understand how crucial it is to get to know our clients’ objectives and provide the staffing strategies and solutions that will get you to where you need to be. We source both onshore and offshore talent and will help you discover the best for your needs.