IT: Is Mexico the new India?
14th July 2011 · 1 Comment
Over the last decade, with the explosive growth in outsourcing to India, many daunting new challenges have arisen. Not only is India no longer the least expensive option, but also the talent pool there is rapidly diminishing, rates of attrition are spiking dramatically, and the time zone difference once considered an asset, is now widely seen as a liability in today’s Agile development environments.
These challenges have created a shift in the demand of IT services to “near shoring” – to the countries of Central & South America; services, that India became famous for: software development, engineering, maintenance, tech support, quality assessment, bug fixes, and so on.
While companies have focused on Costa Rica, Argentina & even Chile in the past, they are rapidly discovering the closest, & most obvious choice: Mexico. The IT sector in Mexico is mature, & globally competitive. Because of its close proximity to the US, same time zone, and ease of travel (over 300 flights go from the US to Mexico every day) American companies can more easily work with their IT teams in Mexico. NAFTA membership provides an added advantage, in that intellectual property rights are protected along with a free flow of goods and services. Additionally, there are no travel restrictions between the USA & Mexico, as there are with India (foreigners can only make one trip every 60 days).
Guadalarjara Square
Mexico has positioned itself as highly competitive and the Government is motivated to increase their share of the tech industry. In 2002, they launched a program to promote Mexico’s technology industry and the goal was to increase it to over $15B annually by 2013. Since that time, they’ve built three technology parks: Monterrey Technology Park for multinational companies; Apodaca Technology Park, and Guadalajara Software Center, which is located in the center of Mexico’s “Silicon Valley.” This move has already paid dividends, as evidenced by several new companies that have formed, focusing on everything from Game development & Animation to Enterprise Software, Cloud Computing, & IT Services
Unfortunately the constant news of drug violence that permeates our media has negatively impacted our perception. The fact is that the violence is localized to mainly border areas, while the IT outsourcing hubs have not experienced anywhere near the level of violence that plagues the border cities (Juarez, Nuevo Laredo, Nogales, etc.). In fact, only Juarez made the top 25 most dangerous cities for offshoring according to CIO Magazine (and note that two cities in India are in the top 10).
Our company (ITexico), with headquarters in Austin has a software delivery center in Guadalajara –a refreshing trip as opposed to India–trust me. Mexico has emerged as a viable option for outsourcing IT, and is worth further consideration.
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