Outsourcing

Software Development to Mexico: An Alternative to Profitability and Success

The results of the current economic crisis are clear: millions of people are unemployed and companies are going bankrupt or are struggling to make payroll.

Software companies are not the exception. Some software companies are buckling under pressure of the crisis and are failing. Sales are down, expenses are too high, and more importantly, expenses are fixed.

One of the most recent cases was LucidEra a prominent business intelligence SaaS start-up. LucidEra is struggling to stay afloat. They haven´t ceased operations yet, but the rumors of their imminent closure end are gaining attention.

LucidEra’s CEO said they have happy costumers and a good pipeline, so why are they sinking??

One angle to consider is that some SaaS Companies aren’t leveraging their best resources for application development. They haven´t looked for different and better options.

Many may be leveraging offshore vendors in Asia to reduce costs, but the last 5-10 years has seen a fair share of project and offshoring failures. The challenges of working with resources half a world away with a 12-18 hour time difference have taken their toll.

Perhaps they should consider working with SaaS product development experts in a nearshore location? Outsourcing software development to Mexico can be the ticket to reduced costs and reduced stress for building and maintaining their applications in a cost effective and productive way.

We clearly know cash flow and capital are the primary issues, so why don´t they look a little bit ahead and analyze the options that Mexican software providers give them? Undoubtedly, Mexico can be a “safe harbor” for companies that are suffering financial hardship.

The strategic geographical location, similar time zone, but specially the lower cost of labor makes Mexico an interesting place to outsource software development.

Nowadays, companies need to find and chose the best option to cut costs, while they increase the competitiveness.

Mexico: Competing With India

It is well known India has the biggest slice of the IT cake. How did they get it? It´s easy, Indian software providers know how to take advantage of opportunities. Indian companies have joined various groups and Associations to have a strong presence in the IT world. Reunions, congress, etc. everything where they can gather is an excuse to share ideas, tips, and valuable information about the market. This environment enriches their knowledge and strategies to get into the US business.

Indeed the Indian IT service market is formidable. So can Mexican companies can do the same or better? Mexican software providers have everything to become the next IT hub and even more, the nearshore factor makes them an invaluable place to outsource software development. Mexican software providers only need a little push. If they join more associations, just as Indian companies are doing, they can get more benefits. Sharing ideas and becoming closer are some of the keys to take the control in a competitive and demanding technology world. Is not only about capabilities, this is more about creating connections and alliances that support a strong Mexican IT network.

Even though close geographic proximity between Mexico and US is an advantage, it could become a negative point if Mexican providers don´t use IT to gain more ground. While those doing business with Indian software providers are traveling many hours to meet, Mexican companies seem to be throwing away this opportunity. It´s easy for Mexicans to travel, just one hop is necessary to gather with their clients in the US. Inviting clients to Mexico to show them the place of work is a smart action to let them know the cultural similarities and the well understanding that they will have during the relationship.

All this not bad news. Now is a good time to double the efforts and make their services known to achieve greater success. Mexico has all the advantages; it is only a matter of being aggressive. It´s time to work harder to be better every day.