Outsourcing software development to Mexico: Is it a smart option?

When companies begin seeking to reduce in the cost of web software development, many begin to think of outsourcing, or offshoring, particularly to India. Now, in recent years, many American companies are coming across a new alternative: nearshoring software development in Mexico.

Nowadays, the economic crisis is pushing to companies to cut costs without sacrificing quality for the costumers. When considering the best alternative to cutting costs in software development, outsourcing becomes a smart choice.

More and more, nearshoring software development to Mexico is being recognized as a great option for many reasons (see below).

A good example of these economic pressures is the retail industry in North America. Retailing companies think their business is not just a matter of differentiating products in a crowded market, is also about achieving cost savings while enhancing the operational efficiencies.

Is well known retailers look not only for a provider, but a partner who perfectly understands their needs, bringing the best solutions at the best cost. And it is important to recognize that decreasing costs does not require a decrease in quality in the service or product delivered.

Why they should chose Mexico for nearshoring software development? The close proximity (4-6 hrs by flight), similar time zone (+/-2 hrs), close cultural similarity, and lower cost of labor (30-40% less expensive) are just some of the benefits that Mexico gives to American companies. Moreover, Mexican software providers are always seeking to improve their services in order to not only satisfy but also exceed their customers’ expectations. All this leads to long term profitable partnerships.

Nearshore Development in Mexico

NEARSHORING IN MEXICO

Nearshore is growing rapidly in importance as many are seeking to reduce the risks associated with the offshore model.

Mexico has become one of the most important centers for nearshoring, providing political stability, a defined framework (giving legal and IP Protection), and assuring investor-friendly policies (NAFTA). All these make Mexico an attractive and safe place to outsource software development and testing.

Partnering with Mexican nearshore providers brings many advantages. The same time zone between US and Mexican companies allows the real time collaboration, increasing the productivity and effectiveness of the work delivered. Nearshore application development is cheaper than onshore or remote domestic delivery. There is virtually no language barrier as many Mexicans speak English. Its geographical proximity to the US allows for the reduction of total expenditure in phone communications and air travel. See articles on Total Cost of Engagement.

The nearshore model is being recognized by Indian Companies trying to mitigate the challenges of Asian offshore development. One of the most representative cases is Tata Consultancy Services (TCS), who opened offices in Mexico City in 2003. In 2007 they announced the opening of centers in Guadalajara and later in Querétaro. Recently, they declared the expansion of operations in Querétaro, creating at least 150 new jobs between 2009 and 2012 as part of their strategy to make Mexico the center of their operations for North America, South America and part of Europe.

This clearly shows how valuable Mexico geographical location is and also that is a talent pool to find skillful workforce.