Nearshoring from a Scandinavian Perspective.

What do Swedish companies really expect from nearshore partners in Central Europe? Is cost still the priority, or is something else driving cooperation today? In this episode Sebastian speaks with Staffan Strand, President at Nexer Group, responsible for international markets including the Nordics. 

They discuss Scandinavian business culture, transparency, and the shift from traditional outsourcing to expert-driven delivery. Staffan also explains why Central Europe – and Poland in particular – has become such a strategic region for digital talent, AI, cybersecurity, and high-competence engineering. 

 This episode covers:

• How the Scandinavian consulting market is changing after difficult years 
• Why cost efficiency matters – but never at the expense of quality 
• What Swedish customers value most: honesty, craftsmanship, domain expertise 
• How Central Europe evolved from cheap labour to strategic delivery hubs 
• What risks companies face in nearshoring and how to mitigate them 
• Why culture, trust, and face-to-face contact still matter in remote delivery 
• Why “daring to specialise” is the only long-term competitive strategy 

⏱ Timestamps: 

 00:00 – Introduction
 01:00 – The Scandinavian perspective on nearshoring
 03:10 – Cost efficiency versus quality and transparency
 09:46 – Central Europe’s shift from low cost delivery to full service ownership
 19:55 – Why specialisation matters more than competing on price 

🎙 Guest: 

Staffan Strand President at Nexer Group 
LinkedIn: https://www.linkedin.com/in/staffanstrand/ 

🎙Host:
Sebastian Dzieniak, Client Relationship Manager
LinkedIn: https://www.linkedin.com/in/sebastian-dzieniak/ 

Transcript

[ 00:00:00,000 ]If you're on the trusted country list, this is something that will be very very very important in a time of relative geopolitical instability. successful today in a nearshore or offshore delivery is to dare to focus and really stand out as experts at something. Very often I see a big success factor is to actually try to build a face-to-face relationship. Welcome to Beyond Delivery by Holistical Connect where tech meets true business value. Hello and welcome everybody to the Beyond Delivery Holistic Connect Podcast. Today with me is uh Stefan Strand, the Chairman of the Board for Holistic Connect and other business areas at Nexer, overseeing the international markets. Hello Stefan. Thanks for joining me today. Hi Sebastian, thank you for the opportunity. Yeah, it's great to have you here. 

[ 00:01:00,090 ]And for our listeners today, we'd like to talk about the Swedish or Scandinavian perspective on nearshoring. The challenges and the benefits of such cooperations. So Staffan, with his big and long experience in working with Holistic Connect. But also other areas, can share a little bit of his perspective on that. Yeah. So again, thanks for joining and shall we fire off with the. With the first question? Absolutely, let's go for it. Okay, fantastic. So Stefan, with your role heading up several business areas at Nexer Group. Being the chairman of the board of Holisticon Connect in Poland and your experience across the Nordic and international markets, how would you describe the Scandinavian approach to outsourcing/ slash new shore partnerships? And what are the top expectations from the Swedish clients today? 

[ 00:01:59,710 ]So at the macro level, the consulting and services market in Scandinavia today is in a state of slow rebound. Of very very rough years within consulting cost is a strong focus. Several clients are engaged in vendor consolidation to get more responsibility out of fewer partners, but at the same time, many have immense challenges of digitalization ahead and are well aware of this. The market is quite mature when it comes to outsourcing and nearshoring. And even in this downturn, that has continued to be top of mind of many companies. Tough times, we're on the way towards something better, but still many opportunities ahead. Yes, hopefully. And you've mentioned that it's been a rough couple of years. I think it's not only Sweden. I think it's something that companies globally experience and hopefully it's soon to be finished. 

[ 00:03:09,590 ]Right, so looking at these Scandinavian clients again. And where do they draw the line between cost efficiency and value delivery? How much importance is placed on innovation, craftsmanship, or domain knowledge as opposed to just cheaper development capacity? In your opinion. Given the market situation, cost efficiency is definitely critical. But at the same time, it's important to realize there is little willingness among the companies to compromise on quality. We see a lot of companies investing big in developing new capabilities through technology. And their innovation, that is aligned with that business transformation, is absolutely critical in attaining the desired objectives. Pretty much down to the basics. Quality is important. Transparency will always be important in the Scandinavian culture and long-term partnerships are. are needed to get the real business effect and the business transformation that the clients are looking for. 

[ 00:04:17,560 ]And how does Nexer ensure that it's delivered? Models reflect those values, especially when working across borders. So there has been a lot of shifts. When the offshoring and near shortage started some 20 years ago, there was a lot of focus on labor arbitrage, essentially being able to get the same competence at a lower cost. This still holds true for rudimentary tasks within IT support and maintenance, but I think, in today's market, for many roles, it has changed to much more of a value-oriented approach where it's more about reaching the right critical mass at the right price point and achieve the right results, independent on the physical location of the resource. This is great news for Nexer. It aligns very well with our strategy of delivering very specialized and high-competence services. 

[ 00:05:16,320 ]Thanks to the mindset of entrepreneurs, we're also quite good at adapting to these changes, which means that. In order for us to stay relevant, we have to change. And here, entrepreneurship helps us. change, even though the changes in the client landscape have been quite dramatic over the past years. That's a valid point and from my reading and the things I could find online and obviously experience with working with Sweden. Transparency and honesty are some of the core values that the clients value. And I was wondering if we could maybe share some examples. of the times when those two values made the difference to the relationships with the clients. So transparency is something that is very, very important when you do business in Scandinavia. 

[ 00:06:09,820 ]It's very much a core value; it's a very upfront culture, and there is an expectation, especially when you're working with upper management in clients, that a partner does not oversell their capabilities. The expectation is honestly there. Despite this, of course, projects don't always go the way as planned and they do derail for various reasons. But here it's important. Very often in Scandinavia, the way to approach this is to escalate the matter and then. Often you sit on the same side of the table together with the client, looking at the problem, and you formulate a common approach to resolution rather than finger pointing, just trying to find a scapegoat. It's not about why or who has done wrong. It's about finding the solution. So this is quite a nice way of how transparency escalates into resolution when you have issues. 

[ 00:07:15,730 ]And actually, I had one of these situations a few weeks ago. We had a project at a club. The client, for various reasons, and again, no finger pointing, the project was not going as well as both parties had hoped for. So I sat down with the client CEO, we formulated an action plan. And of course, both of us were not directly in the project. We didn't know all the details. We just know what we wanted to achieve. And we formulated an action plan to how to accelerate progress in this. Given that we didn't know all the details, we could look more at the objectives, we could look at the partnership, we could look at the collaboration, and hence came up with a fairly pragmatic approach on how to resolve it. 

[ 00:07:58,270 ]And now we have set that plan into action. And these kind of situations, that's That's made possible by the culture of transparency and honesty. In the end, oftentimes the relationship between client and supplier is forced even stronger. Once you come to solutions. And of course, this doesn't mean that that we're free from issues. I mean, sometimes you come to the end of the road and there is friction, but transparency, both in not overselling, but also in how. A common approach is shared to achieve resolution of difficult situations. I think that is something that is absolutely pivotal if you want to work long-term in Sweden and build the client relationships. It's important to understand that this is the way that we are. 

[ 00:08:49,550 ]Working as Swedes and Swedish companies, I love that and um, yeah, I really like the approach of um, sort of like separating people from the issue in a way and looking into solutions, because yeah, let's be honest, collaborations and projects, it's not always rainbows. You know, there's challenges, there's issues, and it's about how you resolve them and not, yeah, not just pretending that it's not there. Have a big smile and pretend everything is okay. Thanks for that perspective. It's a good point. Coming back to the nearshoring aspect. From your perspective, how did Central Europe evolve in terms of maturity, moving from staffing hands-on coding? to full product ownership, data and AI engagements. As I alluded to earlier, there has been a radical shift in the perception of nearshore services. 

[ 00:09:51,580 ]Services from CEE Central Eastern Europe over the past 10 years. Again, it started out very often as a low-cost alternative to local delivery. A lot of business process outsourcing, where there was a big front office in the country, a lot of service management, and then there was an outtasking of certain parts of the service to a low-cost country. However, today it's shifting away from this. It's much more of a full-service offering. Cost is not necessarily the differentiator. And. What we see is this also means that the responsibility for delivering the outcome or delivering the project is shifting to. The near shore location much larger in extent, and of course, once you have team and project-based delivery with With accountability somewhere else, this also elevates the need for project management and supporting roles in the team. 

[ 00:10:51,750 ]So it means shifting away from just resourcing in to actually skills to deliver an outcome or a project supporting that outcome. You've mentioned some of the benefits. Is there anything else you would like to add for other Swedish businesses or Scandinavian businesses looking to scale in Central Europe? Do you see any other value elements that you would like to mention? And I think one such would be the access to competence at scale. Because if I look at Poland today, I'm of course I. I'm very well-knowledged in the Swedish market, but I have a fairly good grasp of Poland as well. Poland has the largest tech talent pool in Central Europe and Europe. 150,000 professionals within IT and tech. And the pipeline for the coming year is also very strong because the university is a graduate. 

[ 00:11:54,180 ]high profile candidates to work in this field at a high rate. Compare and contrast that to Sweden with 200,000 people today working in IT. in tech, but Sweden has a need for 18,000 more within these sectors every year. And that's a number that the universities will not get close to graduating. Sweden is a very mature country digitally. We're focusing a lot on digitalization, manual digitalizing, manual processes to reduce our labor costs and at the same time we're dealing with so it's both emergence—I mean we. We have digitally native companies, but there's also a big legacy because tech and IT has been around for a long time. So there's quite a bit of work in refreshing that estate. So I see the demand being strong. 

[ 00:12:44,890 ]Particular areas of demand that I see moving ahead, AI and machine learning, obviously like everywhere else, cybersecurity and risk management ties in very, very close. That. Software engineering, of course, both to refresh the legacy, but also build the next generation digital solutions and products. As well as system integration capabilities. So there is going to be a lot of demand. I mean, yes, automation will help. Yes, AI will make us more efficient, but I don't see over time that the demand is going to shift to something less. It's quite actually the opposite when we see digital becoming even more important in many industries. Yeah, it's going to take a while before full project delivery can be outsourced to AI. So yeah, it's still some years ahead. 

[ 00:13:42,210 ]I think, but it's interesting to see how everyone expected to immediately replace all the developers' jobs, but yeah, it's not there yet. Okay, so I was wondering— how does Nexer work to align the new show offering so that the Swedish businesses feel that their core strategic, cultural, and design-centric values are preserved even when part of the work is done outside of Sweden? So, of course, in Sweden, like everywhere else in the world, during and immediately following the COVID-19 pandemic, the location dependence reduced drastically, more or less overnight, as everyone had to work remotely, even though it was local resources, it was still remote work. In relationship to the office. In the past couple of years, many organizations have been pushing hard to return to work. 

[ 00:14:39,910 ]We don't have the same transparency, but at the same time, I think the pandemic taught us that you know, it works quite well. Some of the things that we took for granted that had to be done in office, they work just fine doing somewhere else. But at the same time, cultural proximity remains a critical element. And I think building that connection as a nearshore offshore provider. Building that connection to the client and really understanding the culture is very important. And I think a core element to— ensure that even if you are working from somewhere far away, that you get the proximity— is that you have the regular standup, that you have interactive collaboration across the teams. And I think also very often I see a big success factor is to actually try to build a face-to-face relationship. 

[ 00:15:37,820 ]Yes, we're very. Well used today to work in digitally and doing a lot of things remotely, but that human touch is still important. And trying to meet in the beginning of the project, if it is something important and complex and difficult, make sure that you actually gather the teams to to kick it off. Once you have that, it's so much easier to reach out, it's so much easier to deal with difficulties that may arise at a later point in time. Just building that relationship and, most importantly, building the trust among individuals within the team or within the project. So on that note, do you see, like, talent, or language, or time zones, or cultural differences, still pose a friction to to those projects? Uh. Yes, when it's not managed correctly, absolutely. 

[ 00:16:32,630 ]I think language becomes less and less of a challenge for every year. I mean, while local cultures are important, I think. Everyone is used to interacting in English today in a whole different way than 10, 15 years ago. And of course, most new graduates entering the market, no matter of location, will do so with a strong set of English skills. Culture. It's always important to embrace and understand the person on the other side. What are their values? What are their foundations? But this is why it also helps so much to spend some time talking non-project stuff with the people to get to know them. Because, of course, you may have a common language in English, you may have a common language in the technology or problem you're trying to solve, but you may have a very, very different set of values governing in how you react to various things you are faced with by another person. 

[ 00:17:39,330 ]I think this is important to both be cognizant of, but at the same time, try to bridge by actually both doing the research, but also meeting, and just it. building that relationship and the trust. Thank you for that perspective. We don't have a lot of time left, but I have like two questions that I'd like to ask. And one of them being like the misconceptions and maybe some risks that are related to nearshoring. Maybe on that you could say a few words, like how you can potentially mitigate the risks when, you know, outsourcing work to the new show partners. Yeah, I mean, the The maturity to manage remote teams has improved drastically over the last 10 years. However, often, when the deliveries that involve near share and offshore fail, it's often a matter of underestimating the amount of communication and coordination that is needed. 

[ 00:18:46,590 ]Again, another aspect that sometimes increases costs and complexities the initial setup of tooling infrastructure and onboarding. We see this more and more today that companies in the exposed online landscape of today are becoming more. Scruinating on how they allow access to their environment. So this is something that is also very important to plan properly when it comes to networking, when it comes to to workplace infrastructure, when it comes to security and access from remote locations, so that that is thought through properly so that it doesn't become a limiting factor or something that introduces delays in the projects. Yeah, that is interesting because, like I said, it's not always so colorful. There is some risks involved, of course, and companies into. So maybe just to slightly build on that question, any advice that you could share for vendors and clients? 

[ 00:19:52,480 ]Looking to grow internationally, I think for me the most important aspect of being successful today in a nearshore or offshore delivery is to dare to focus and really stand out as experts at something. Playing at cost is a long-term losing value proposition, simply because over time markets will level out. We already see that in the expert space, that your physical location doesn't matter at all; it's exactly the same cost, no matter where you deliver from, and that's going to continue to propagate down to less complex roles. And here. To really build a center of excellence type approach. If you don't have a center of excellence type approach, it's hard to stand out in a market where there's so many competitors. If you don't have that, you're going to end up being a generalist and have cost pressure. 

[ 00:20:55,940 ]Really to be a generalist is if you have a very, very large mothership, so to say, that generates the services for you that they're being sent your way. But today here, I think it helps a lot if you build your own. Go to market story and support that selling from the country. Here again. Back to what I mentioned earlier regarding transparency, under promising and over delivering, it's usually a great way to accelerate your position. It may mean that it's a bit difficult to get the first deal. So yes, but once you're then successful, your quality versus the expectation is going to be your best friend at generating growth. And also try to find the right size of clients. If you work in a near-shore setting around. 

[ 00:21:47,540 ]a center of excellence approach you want to avoid perhaps competing with those that are those competitors that have so to say real globally delivery models and at the same time if you go too small you're going to get into clients where you can't scale so finding that sweet spot if you are a a provider that has a true global delivery model, go for the enterprise accounts, but make sure that the accounts that you go into are ones that you can scale. Right, that's golden advice, I think. And the beginnings are obviously always difficult. Okay, so I would like to ask a final question. And it's more of an outlook for the future. And as you look forward, let's say three to five years, how do you see New Shore outsourcing landscape? 

[ 00:22:36,440 ]evolving in sweden slash central europe and what new capabilities specializations will clients expect for example ai sustainability domain specific expertise How do you see that? It's a good wrap-up question. I expect a few things. One is obviously a continued increase of specialization. This earlier. I believe that there are a lot of services opportunities within AI, cyber and data. These are the hot fields right now. Furthermore, I expect Swedish clients to have more risk adverse behaviors. Unfortunately, we have a complex political environment in the world at the moment. So this is something that is an opportunity for Central Eastern Europe to, if you're on the trusted country list, this is something that will be very, very, very important in a time of relative geopolitical instability. 

[ 00:23:42,370 ]I again expect less and less commodity services to be outsourced to nearshoring simply because of the commodity services. Either go into the real low-cost offshoring. Today, you see some of that frontier in parts of Asia as well as parts of Africa. But I do also expect that the real commodity services, and we have seen that trend, AI and automation is going to eat up a lot of that repetitive work. Furthermore, another thing to take into account, we're going to see a strengthening of the local markets in the nearshore countries. Central Eastern Europe. services provider. 20 years ago, you had a hugely lucrative market because of cost versus price going to other countries. This gap is going to lessen dramatically and already has lessened dramatically. So here we will see leveling out of the price point. 

[ 00:24:43,800 ]For the same quality of services. So some of the commodity services might as well go local, whereas the higher-end services, they will really compete globally, independent of location. It amounts to your expertise there may not be if you want to scale that expertise your local market may not be big enough so you actually have to go near shore and offshore so there is quite a lot that i see ahead but there is also exciting opportunities to capture for those who dare to stand out of being really good at something and who dare to stand out the building the the go-to-market approach to capture that opportunity. I love that approach. Dare to stand up. That's something I will say for inspiration for today and for the future. Stefan, thank you so much for your time and for sharing your insights and your perspective. Yeah, thanks again and hope to see you soon. Lovely, thank you so much, Sebastian. Have a great day. Thank you, bye bye bye. Thanks for listening. What's one thing from the episode that made you think? Let us know in the comments and subscribe to the show. It really helps more people discover it. See you next time.