As software development outsourcing becomes more and more popular, Mexico continues to stand out as a go-to option for vendors. This holds especially true for companies in the United States and Canada, which can take advantage of a nearshore partnership, rather than looking to vendors across the globe.
Understanding Nearshore Software Development
In order for company decision-makers to understand why nearshore software development in Mexico is a great choice for outsourcing, they must first understand exactly what nearshoring is.
What is Nearshore Software Development?
Nearshoring is a collaborative approach to outsourcing software development in which companies partner with third-party teams or companies located in neighboring or nearby countries to complete software projects. The two other options for this practice include offshoring—working with companies on another continent or in a completely different time zone—and onshoring, which involves hiring a company located in the same country as the hiring business.
Nearshoring offers companies a number of benefits over offshoring and onshoring, including more effective communication, better alignment of time zones and working hours, and a better cultural understanding, while still allowing companies to access the skilled talent they need at a lower cost.
Faster and easier communication between the in-house team and the outsourced team helps make collaboration much smoother while reducing miscommunications and allowing for real-time conversations. This helps speed up the development process as well.
Nearshore software development is a great option for a variety of companies and locations. Mexico is one of the top destinations for outsourcing from the US and Canada.
How Does It Compare to Offshore and Onshore Software Development?
Nearshoring, offshoring, and onshoring are three different outsourcing models, each featuring its own benefits and challenges. Onshoring software development keeps all of the development operations within one home country, which helps avoid cultural and language barriers. This facilitates easier communication, but it often comes at a much higher cost than other engagement models due to the higher cost of living and labor rates.
Nearshoring offers similar advantages to onshoring, including geographical proximity and cultural similarities, easier travel, and an alignment of time zones. It also fosters more effective communication and reduces language barriers to promote better cross-team collaboration. However, nearshoring offers the additional benefit of lower costs when outsourcing to a neighboring country with a lower cost of living.
Offshoring is typically the most cost-effective version of outsourcing because it involves working with teams located in distant countries with lower labor costs. Although costs are definitely a major advantage of this model, offshoring typically involves major time zone differences and significant language barriers.
Why Mexico for Nearshore Software Development?
Mexico is a great choice for nearshoring software development. Not only does the country have a highly skilled and dedicated workforce, but it also offers geographic and time zone advantages as well as a strong IT industry.
Strong IT and Software Development Industry
One of the main reasons why Mexico is an excellent choice for nearshore software development services is because it boasts a thriving IT and tech industry with a focus on software development. Many top technology companies call the country home, which contributes to its reputation as a key player in the tech scene at a global level. As home to many graduates of reputable colleges in technology-specialized fields, Mexico fosters a skilled workforce ready to handle the demands of this highly competitive industry.
Mexico’s software development and IT outsourcing industry continues growing at an impressive rate of 10-15% per year, amounting to approximately $46 billion in exports. With so many talented Mexican developers, the country is also the third-largest exporter at a global level of IT services.
Skilled Workforce
Mexican software developers have a reputation for their expertise and exceptional skills in the tech industry. The country puts a strong emphasis on technical education to nurture a talented workforce in a variety of development specialties. In 2021, 20% of Mexican college graduates earned engineering degrees, amounting to over 110,00 graduates per year, surpassing even the United States in terms of tech talent.
Many Mexican universities and technical institutes offer students comprehensive training in the latest trending technologies to ensure that the workforce stays updated with industry advancements. The country’s dedication to continuous learning paired with its adaptability and proficiency in diverse software development disciplines makes Mexico’s workforce highly skilled and highly sought after.
Geographic and Time Zone Advantages
The geographic proximity of Mexico to the US offers many advantages for companies looking for a nearshore outsourcing provider. The close distance between the two countries makes it easier for hiring companies to travel to their Mexican outsourcing partner’s physical location or vice versa if need be. This facilitates face-to-face interactions, which are much more difficult with other types of outsourcing, and builds a better relationship between the two teams.
Additionally, the similar or same time zones of the hiring company to the Mexican nearshoring provider enable real-time communication and collaboration to help streamline the development process by enhancing efficiency. Mexico City, for example, is in Central Standard Time, meaning that outsourcing tech companies operate just 0-3 hours behind most US-based businesses.
Cost-Effectiveness
Nearshoring to Mexico offers companies from the US and Canada a significant cost advantage for a variety of software development projects. In general, outsourcing provides companies with lower operation costs thanks to reduced expenses on utilities, administrative overhead costs, infrastructure, and the recruiting/hiring process.
Working with a Mexican partner reduces these costs even further thanks to the country’s lower cost of living compared to that of the hiring company. The country offers highly skilled tech talent competitive wages for their economy while still acting as a cost-effective solution for companies based in the US.
How to Successfully Nearshore to Mexico
Companies must do their due diligence before beginning any kind of outsourcing engagement or outsourced project, whether to a nearshoring team in Mexico or elsewhere.
Finding the Right Nearshore Partner
One of the most crucial steps in the process of nearshoring to Mexico is finding the right fit of a reliable outsourcing provider for software development. Hiring companies should take the time to evaluate potential partners based on their own pre-determined criteria as well as their experience in handling projects of a similar nature. This ensures not only a better understanding of the project’s requirements but also smoother collaboration.
Hiring companies should also ask nearshoring providers for their case studies, testimonials, and client reviews to gain insights into their track record and overall reputation. Looking online at resources like Clutch.co is another way to find honest reviews and feedback for the providers.
It’s also a good idea for hiring companies to meet with potential nearshoring teams to get an idea of their communication skills, their adherence to industry standards, and their overall commitment to quality. By meeting in person or over a video call, hiring companies should get an idea of the team they would work with ahead of making any agreements.
Setting Clear Expectations
As part of their pre-hiring due diligence, companies must put together their clear, concise expectations for the project before ever meeting with any nearshoring providers. This includes not only defined and easy-to-understand requirements but also important milestones, expected quality standards, and methods of communication between the two teams.
By having this information ready to go for each meeting with a potential outsourcing provider, companies streamline the hiring process while also setting their expectations from the get-go with their chosen team. This helps save both teams from confusion or stress from not understanding their responsibilities.
Managing the Project
In some outsourcing relationships and engagement models, the nearshoring provider offers their own project manager to handle the outsourced team while others depend on an in-house team member for this. Companies should decide how they’d like to handle project management with their provider as well as the technologies they want to use for these tasks.
Teams have the opportunity to choose from many different software options and project management methods to facilitate better organization, including Trello, Asana, and Jira. They should also consider the best communication apps and tools as well for instant messaging and easy problem-solving.
The Different Outsourcing Models
In addition to the different geographical-based models for outsourcing, hiring companies must also consider the various forms of software development outsourcing models. These models include traditional full software development outsourcing, IT staff augmentation, and dedicated teams. BairesDev, a leading outsourcing provider in Mexico and Latin America, offers cost-effective versions of each of these models.
Outsourcing Development
BairesDev offers full software development outsourcing as an engagement model which allows companies to delegate entire development projects to a third-party team. In this model, the BairesDev team handles all aspects of the development process, including the staff, equipment, and infrastructure required to manage the entirety of the project from start to finish.
This outsourcing model offers many advantages to hiring companies. From access to otherwise unavailable tech talent and easy scalability to allowing internal teams to focus on their core business functions, software development outsourcing to BairesDev helps companies complete their projects on time and on budget.
Staff Augmentation
BairesDev offers IT staff augmentation as an engagement model for companies needing to temporarily expand their in-house development team with outsourced professionals. This is a great option for when companies need access to specialized developers with niche skills or just extra hands to help get projects across the finish line. In this model, the hiring company adopts the outsourced developer(s) as one of their own, and they retain full control over the project.
Staff augmentation is a good outsourcing choice for businesses needing to quickly fill skill gaps in their own teams but lacking the resources or time to go through the full in-house hiring process.
Dedicated Teams
In the dedicated development team model, BairesDev puts together a team of specialists to fit the needs and requirements of the hiring company’s project. This could include developers, designers, QA engineers, project managers, business analysts, testing professionals, and more.
The dedicated team then works under the direction of the client company while the outsourcing vendor takes on all of the administrative and financial burdens of the team. The hiring company only pays the project cost or hourly rate determined at the time of contract signing. BairesDev dedicated teams are a great option for a variety of different situations and companies, including those with long-term projects.
Other Great Outsourcing Locations in LatAm
Latin America is a continually growing and in-demand outsourcing location for many companies, especially those in the United States.
Chile
Chile is a major hub of technical innovation in LatAm and beyond. This country has tens of thousands of highly skilled software engineers and developers at fairly low costs for outsourcing. The Chilean government actually helps boost the booming technical industry with the support of new tech services and innovative solutions, with a special interest in fintech and blockchain.
Argentina
Many companies choose to partner with outsourcing providers located in Argentina because the country features one of the largest talent pools in LatAm with a highly educated workforce. Its labor costs are significantly lower when compared to those of the US and European countries, which also helps boost its reputation. The Argentinian government utilizes innovative legislation and initiatives to support investments from other countries.
Colombia
Colombia boasts a robust technological ecosystem with a highly skilled talent pool of IT professionals and software developers. The country’s vast community of educated developers, engineers, and beyond features a variety of niche skillsets and specialized educations to further dev teams in the global outsourcing community. The government of Colombia also helps contribute to the country’s rich IT ecosystem.
Conclusion
Mexico is a country rich in talented IT professionals and software developers thanks to its education system and focus on the tech industry. Many companies from the US and beyond choose to work with nearshore outsourcing providers like BairesDev because of this and Mexico’s overall cost-effectiveness for development. Hiring companies should consider partnering with a Mexican nearshoring provider for all of their software development needs, for both long and short term projects.
FAQ
What are the potential challenges of nearshoring to Mexico and how to overcome them?
Potential challenges of nearshoring to Mexico include cultural differences and language barriers. Companies overcome these challenges by encouraging open communication, promoting cultural understanding, and offering language training.
How does nearshoring to Mexico compare to other Latin American countries?
Compared to other LatAm countries, Mexico ranks amongst the top choices for nearshoring thanks to its skilled workforce, strong IT industry, and proximity to the US.
