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The Mexico advantage for outsourcing IT services

Outsourcing is considered not just a time saving but is also a cost-effective strategy. Organizations look to outsource to increase growth, decrease operational cost, and find talent that is not available locally. Additionally, enterprises outsource to find the right kind of talent. In the search for options to outsource IT services, enterprises are faced with the question on which country is the best option.
Mexico is becoming an important destination. With the increase of globalization and specialization Mexico is considered the place for outsourcing. There are many advantages that are associated with outsourcing or near shore (because of its proximity to the US) to Mexico. Some of them are listed here.

Cheaper labor

The main reason companies outsource services is to ensure that their return on investment is higher and the cost of production is much less. Mexico has a big advantage when it comes to cheap labor. Sometimes, the costs are much lesser in comparison to the prior favorite destinations.

Ease of transportation

Anything shipped from Mexico is easier, when compared to the same item being shipped from let’s say an Asian country. If you are specifically focused on serving the US market, transportation is much easier. Additionally, if you want to make an on-site visit at the production or operations center, flying to a place in Mexico is easier than having to fly half way around the world to meet the team.

Time zone advantage

Time zone is an important advantage that enables more interaction. For instance, if your organization is based out of the US and your outsourcing is based out of Beijing, it becomes difficult to coordinate the best time to talk, just in terms of availability. Additionally, emails and other kinds of communication cause a delay which invariably affects productivity. However, Mexico has the advantage of being in the same time zone, this helps work move along faster.

Collaboration

Apart from time zone difference, the fact that they can collaborate more is also an advantage that Mexico offers. When the teams at different locations work at the same time, there is a lot of scope for collaboration. If one of the team members want to fly to the operations center to have a meeting, it is easier if the flying time is lesser. This encourages teams to work together.

Communication

The advantage that Mexico as an outsourcing destination has is the ease it offers for communication. If there are changes that are required or updates discussed, all it would take is to talk to them over phone and fix the issue. Additionally, the language advantage also aids communication and decreases the number of errors that may arise from not being able to understand each other.

Culture

When you go to other parts of the world to outsource your IT service, there could be cultural differences that may not be addressed. It would take a lot longer to understand these differences and work together. For instance, what one might find offensive in China may think its par for the course for someone in North America. These differences could cause friction amongst members of the team and impact how they work together.

Government encouragement

The Mexican government seems to be very outsourcing friendly. According to Clutch, “Mexico launched PROSOFT in 2002, a program aimed to advocate the technological industry, maximizing the IT industry’s value to USD $15 billion by 2013. Mexico built three technology parks: Monterrey Technology Park for multinational companies; Apodaca Technology Park; and Guadalajara Park, which is situated in the center of Mexico’s Silicon Valley.” So, it does seem like the Mexican government is looking to encourage IT related services and is focused on encouraging the IT industry within its borders.

Resource Flexibility

We live in a dynamic world where technology and needs of customers are constantly changing. Mexico offers the flexibility to adapt to this change easily. As long as you ensure that your service level agreements (SLAs) are in place, there is no need to worry about tweaking the outcome of the IT service based on the demands of the hour from customers.

In Conclusion

There are many advantages of outsourcing to Mexico. However, there are some things you must keep in mind before committing to that. Make sure you understand the laws in the country, and if the work is legally considered outsourced work. Ensure that the service level agreements are drafted and reviewed well and the contracts of employees are legal. Do pay attention to documentation and to the reputation of the organization you are going to outsource to.
Overall, if you outsource to Mexico with caution, it will make your process of outsourcing easy, seamless and efficient. It will also give you the opportunity to have a lasting relationship with organizations within Mexico. Mexico is gaining popularity as an outsourcing destination, as long as you follow the process; you can but only benefit from the relationship.

Sources

http://blog.definityfirst.com/the-advantages-of-outsourcing-it-and-software-services

https://www.quora.com/What-are-the-advantages-and-disadvantages-of-outsourcing-to-Mexico-for-US-companies

http://www.olivares.com.mx/En/Knowledge/Articles/TrademarkArticles/Mexicoavaluableoffshoringoutsourcingdestination

https://clutch.co/outsourcing-location/mexico

http://www.acc.com/legalresources/publications/topten/outsourcing-in-mexico.cfm

http://www.lexology.com/library/detail.aspx?g=99be1d1c-970a-4657-bc02-6f7a53f88764

http://www.bizlatinhub.com/competitive-advantages-outsourcing-business-mexico/

http://advancio.com/nearshore-outsourcing-to-mexico