Mexico: a preferred destination
In Mexico, the importance of industrial parks is vital as they provide significant competitive advantages for attracting foreign investment. These foreign investments offer multiple business opportunities for companies in the country, since, for foreign companies, having a strategic ally in Mexico favors their development. Nearshoring is precisely the link between a foreign company and a company that is subcontracted to provide services with an unbeatable geographical proximity.
Even, according to the Ministry of Economy, in 2022 foreign direct investment in Mexico increased by 12%, comparing the parameters with 2021.
This only tells us one thing: the current conditions of the country are attracting the attention of foreign investments generating new business opportunities for local companies.
These conditions establish new areas of growth for the industry. According to information from the Mexican Association of Industrial Parks (AMPIP), during 2022, 47 new industrial parks began to be developed in Mexico. These industrial parks are a fundamental part of the strategic infrastructure and logistics system of the country, providing notable competitive advantages for attracting foreign investment. Precisely foreign companies that are setting up in Mexico can use the services of local IT providers for their facilities and operations in the country.
Estimates suggest that nearshoring will generate approximately $ 300 million dollars for the country, but what is nearshoring and why has it become so relevant in recent years?
What is Nearshoring?
Nearshoring is a reality. The Ministry of Economy of Mexico points out that, of the increase in foreign direct investment compared to the previous year, 48% is new. This is driven because the manufacturing sector with the manufacture of cars and trucks, electronic components and auto parts has found epicenter in our country.
Geopolitical conditions, quality of labor, proximity and costs are, broadly speaking, the main characteristics that have led U.S. companies to manufacture and export products from Mexico instead of Asia.
Nearshoring is nothing more than outsourcing services to a provider in a geographically close country.
If for decades the trend was offshoring, migrating labor to Asian countries – particularly China – to reduce costs, the trend today is to return to geographical areas closer to the United States, making Mexico the favorite destination.
Nearshoring is the element that bridges the gap between offshore and onshore. The nearshore allows companies to take advantage of the cost benefits of outsourcing and retain greater control by having the supplier in the same time slot, a similar culture and the ease that Mexico offers as a country where a large number of its professionals master the English language.
Nearshore Services for the United States
When we talk about nearshoring, we talk about the outsourcing of a supplier located in a geographically close country. This feature provides multiple advantages such as facilitation between communication and coordination between both parties.
Mexico is an excellent example of that. If a company in the United States seeks to outsource some services with a nearby provider, the proximity to Mexico allows it to find a strategic ally located in a similar time zone and with a close cultural and linguistic relationship compared to a provider in Asia.
Nearshoring is also understood when companies transition from jobs to lower-cost countries to take advantage of the savings, but it is important to realize that nearshoring does not only serve to establish a contact center outside the United States to provide customer services.
Some of the main areas that companies choose to outsource are:
● Business services such as sales, accounting, marketing, and administrative and customer service tasks
● Manufacturing services to cut costs in setting up a facility that can be extremely expensive
● IT and technology services such as software development and engineering, project management and other technology-related services
IT Nearshore in Mexico
There are several nearshore services available for U.S. companies looking to outsource to an information technology (IT) service provider.
The most common are:
● Software development
Mexico is a country where there are many professionals specialized in IT services. These professionals work in companies that can develop custom software, mobile applications, web applications and business process automation software.
● IT Support
Nearshore providers in Mexico also offer IT support services such as technical support, troubleshooting, and hardware and software maintenance.
● Data analysis
In Mexico it is also common to find nearshore providers that offer data analysis services such as data collection, analysis and visualization to help companies make informed decisions about their operations and business strategies.
● Cloud services
Mexico is a country with a robust cloud infrastructure and provides cloud computing solutions as Azure and AWS services. Cloud service providers in Mexico help companies in the United States migrate their applications and data to the cloud, in addition to offering ongoing support solutions.
● Cyber Security
In Mexico it is also common to find nearshore providers that offer data analysis services such as data collection, analysis and visualization to help companies make informed decisions about their operations and business strategies. Overall, nearshore services help U.S. companies reduce costs and increase productivity by outsourcing IT services to suppliers located in nearby countries. And Mexico, by maintaining greater cultural and linguistic similarity, improves communication and collaboration between both parties.
Why is Mexico the best choice for nearshoring in IT Services?
To recap, Mexico is the best choice for nearshoring in IT Services because:
● Proximity: maintains a geographical proximity to the United States that, for in-person meetings or work assignments during large projects and long-term relationships, provides facilities in travel expenses and logistics. Working with a nearshore team simplifies travel with shorter distances, no jet lag and no time interruptions.
● Cultural similarities: Distances between cultural and linguistic differences affect communication, interpretation, and productivity. However, with Mexico, the United States not only maintains a border and geographical proximity, it also has an unparalleled cultural affinity.
In addition, suppliers in Mexico are often fluent in English and Spanish, eliminating the extra time and investment needed to bridge the communication gap often experienced with offshore companies.
● Quality talent: Mexico has more than 500,000 professionals and 180,000 engineers, IT workers and technicians who graduate from more than 120 Mexican universities each year. Talent in Mexico is qualified.
● Competitive costs: without a doubt the costs of IT services in Mexico are lower than in the United States. This allows foreign companies to save money on their IT projects.
● Favorable regulation: Mexico has a favorable regulatory framework for nearshore IT services, making it an attractive destination for U.S. companies looking to outsource IT services. The Mexican government has implemented policies to encourage foreign investment in the IT sector, including tax incentives and training programs.
In short, by choosing Mexico, foreign companies can gain access to highly skilled talent, save costs, and improve their efficiency in their IT projects.
In Nearcontact we are backed by more than 27 years solving the business needs of our customers through knowledge, experience and technology through innovative products and services of Information Technology, adding value and competitive advantages to our customers.