For many companies that provide software development services to their customers or depend on customized software to run and grow their unique, innovative businesses, outsourcing at least a part of their software development has become a common practice. Outsourcing can help keep development costs down while creating valuable software products that might take much longer to build with in-house resources alone. Nearshore outsourcing to a vendor in a neighboring country can have many practical and economic advantages. If your company is in the United States, Mexico is your best choice among Latin American countries for nearshore software development. Here are the main reasons why.
In a blog post from early in 2014, we highlighted some good reasons for outsourcing nearshore software development to Mexico. While those points still hold true, the country is moving fast to become an even better nearshore resource for companies across North America. The Mexican IT and networking infrastructures are being continuously enhanced for greater performance and resilience. Educational resources and degree programs augment an already highly qualified talent pool of technology professionals. Government support for the software industry and nearshoring is powerful and unwavering. Consider these arguments for nearshoring to Mexico:
Close. Mexico uses the same time zones as the United States, and many locations switch to daylight savings time and back on the same dates as their neighbors across the border. That means people and businesses in Mexico generally have the same work days as the U.S., and adjustments to allow for calls and meetings across time zones are easy. With a large amount of direct flights—often taking no more than an hour or two—from many U.S. locations to Mexican airports, the country is also within close reach for travelers, easier and less expensive to get to than most of the offshore countries. Much like business travelers up and down the U.S. east and west coasts, many professionals crossing the border in either direction arrange their flights as day trips, without overnight stays. Business hubs such as Guadalajara or Mexico City are also well-connected to freeway systems.
Clued in. Don’t forget the cultural closeness. In the border states and beyond, many Mexicans watch U.S. television, root for U.S. bands and sports teams, shop with U.S. companies, connect with their friends on the same social media, and have similar political and cultural perspectives. Language barriers practically do not exist. Among business people and in the IT industry, English proficiency is generally at a professional level, although many are bilingual. Professional English competence is a graduation prerequisite in many universities and technical degree programs. Familiarity with U.S. business culture also entails a customer-focused mindset that emphasizes tangible results, responsive communications, flexibility, collaboration, creativity, and efficient time management; we often hear from clients that their experience with outsourcing companies in other regions did not rise anywhere close to the same quality.
Smart. The country’s more than 120 universities and technical schools graduate about 65,000 students with IT-related degrees every year. Because such leading educational institutions as Tec de Monterrey maintain campuses in many locations, great talent throughout the country can gain valuable, in-demand skills. Software developers join in many noncompetitive forums where they learn from each other and pursue their innovative ideas, often resulting in solutions or start-up companies with large potential. Tiempo Development is highly supportive of these efforts in the cities where we have our development centers—Guadalajara, Hermosillo, and Monterrey.
Agile software development and agile strategies are well known and widely preferred among Mexican developers. Events such as Agile Open advance the art and help developers become more effective in contributing within agile development environments.
Supported. At the federal and state levels, Mexican government provides financing and resources to advance the IT industry, strengthen nearshoring, and grow business with U.S. companies. The five most important, countrywide initiatives include these five:
- MexicoIT introduces companies to Mexico through outreach and events, educates regarding the advantages of nearshore outsourcing and IT investment in Mexico, and helps U.S. and Mexican businesses connect.
- MexicoFIRST aims to grow Mexico’s highly educated and competitive IT talent pool.
- ProMéxico fosters investments that advance technological innovation and R&D in the country.
- CONACYT supports R&D and technology infrastructure investments and IT innovation projects.
- PROSOFT provides financial stimuli to investing in and developing IT projects in Mexico.
Tiempo Development engages with both MexicoIT and MexicoFIRST.
At the city and regional level, you also find many innovative, exciting programs to advance IT in Mexico. In Guadalajara, for example, the Digital Creative City provides a connected, smart urban infrastructure in which creative, high-potential ideas and organizations in the realm of digital technology can grow.
Safe. A combination of federal legislation and international trade agreements, including the North American Free Trade Agreement (NAFTA), makes Mexico a preferred location for creating intellectual property. Both India and China, countries to which many businesses outsource software development, manufacturing, and business processes, score extremely low when it comes to safeguarding IP. At Tiempo Development, we take additional steps to protect our clients’ IP, from stringent data protection, to signing non-disclosure and confidentiality agreements, to screening for any potential security issues when we talk to employment candidates.
In terms of personal security, technology hubs such as Guadalajara, Hermosillo, and Monterrey are as safe as urban environments anywhere in the western world. Mexican cities and states have in recent years made huge strides to reign in violent crime.
Successful. Overall, more than 2,000 IT companies ranging from global brands to unknown start-ups have operations in Mexico, and the country is the world’s third-largest exporter of IT services. Mexico’s infrastructure, stability, and business-friendly climate position it worldwide at a fourth-place ranking in Information Services Group’s Outsourcing Viability Index for 2015. However, in Latin America, Mexico leads the index. Mexico’s increasing visibility as an effective nearshore location compounds with the individual successes of companies and their customers, resulting in explosive growth in our industry. As a certain level of success and excellence in nearshore development becomes the norm, quality levels will continue to increase over time.
Economical. Salaries and the costs of living in Mexico are significantly lower compared to those in the U.S., even in the relatively well-paying technology industry. As mentioned, time zone and geographical closeness simplify the logistics and help reduce the costs of meetings and communications. When you outsource to a nearshore development company in Mexico, you can also expect to save on telephony costs, minimize delays and errors caused by language, cultural, and geographical hurdles, and avoid the kind of burnout that IT managers suffer when they have too many early or late meetings with offshore providers in remote time zones. Taking advantage of nearshore development, you can produce a more substantial return from your software development budget, in a shorter time.
Welcoming. If you are interested in exploring the nearshore opportunities in Mexico, you might want to consider some of the many industry events, which usually take place in easy-to-reach locations. For example, Nearshore Americas organizes the annual Nexus event, where businesses can connect with nearshore providers. Tiempo Development participated in Nexus2015, the fifth iteration of Nexus. To see the ProMéxico event calendar of conferences around the world, just scroll down on the organization’s homepage. Consider also the Asociación Mexicana de la Industria de Tecnologías de Información (AMITI), a privately organized and funded organization that aims to advance the country’s IT industry. AMITI’s busy events calendar lists conferences set up by the organization itself as well as other industry events. The Gartner CIO & IT Executive Summit of 2015 takes place in Mexico City and is expected to offer a strong Latin American perspective. Nearshore topics are bound to come up.
When you consider cost, closeness, talent, infrastructure, and resources, our three nearshore development centers are in three of Mexico’s best locations. If you would like to discuss what nearshore development could mean for your business, please send me a note at firstname.lastname@example.org or send a note to email@example.com. You might also want to take a look at our case studies to see what some of our customers and partners accomplished by working with Tiempo. Finally, if you are wondering how to select a nearshore provider, our Manuel Bernal posted practical guidance to help you accomplish just that.