Software development is a step-by-step procedure to create software to achieve a personal objective or process. Its goal is to create programs that will make things easier for a person or a business and to simplify what is otherwise a long and complicated process.
Outsourcing, also known as Business Process Outsourcing (BPO), has been a cost-cutting trend for many large companies in the U.S. since 1989. Customer service, customer technical support, manufacturing, and back office tasks are handed over to another company instead of being done in-house. Outsourcing allows the company to grow and meet deadlines without the added cost in overhead and payroll. Usually, these offshore partners are in Asia, Africa, and Eastern Europe where labor costs are more affordable.
Today, nearshoring is becoming a better option for businesses because it is easier to communicate with teams in similar time zones, and on-the-spot quality checks are more manageable. Nearshoring means that if your company is in the U.S., a good option is to choose a country like Mexico.
Why Outsource Software Development to Mexico?
1. Mexico’s proximity allows real-time collaboration
Guadalajara is now being tagged as the “Silicon Valley” of Mexico. It is the capital of the state of Jalisco, with a total of 1, 460,148 inhabitants. Tech giants like IBM, Oracle, Dell, and HP have satellite offices in Guadalajara.
Because Mexico is in a similar time zone as the U.S., real-time collaboration can happen. Unlike working with software developers who are located halfway around the world, you can easily fix bugs and work on projects in real-time when working with developers in Mexico. If there is also a need to meet the team in person, you can easily drive or fly to Mexico without the need for visas or complicated travel arrangements. Products can easily be delivered to and from Mexico to the U.S.
2. Most Mexicans understand the U.S. language and culture
Given the proximity of the United States to Mexico, most young people have assimilated the American culture, including how to talk and dress. This removes cultural barriers that you may experience when dealing with other countries. It also mitigates any language barrier that may be experienced when dealing with offshore partners in countries where English is not the first or second language. With proficiency in the English language, engineering students can focus more on developing their technical skills. In 2011, Gartner rated Mexico as one of the highest ranked countries for their educational system.
3. Mexico has a huge talent pool
Every year, thousands of IT graduates from the universities in Jalisco, including 85,000 from the prestigious Tecnológico de Monterrey join the labor force. In 2012, Mexico produced a total of 130,000 engineers and technicians, or more than the number of graduates produced by countries such as Brazil, Germany, and Canada. The government of Mexico has also built 140 schools for higher learning, 120 of which now specialize in science and engineering.
Mexico is currently ranked number 33 in HackerRank Programming Olympics and number 29 in Top Coder Rank. This is close to the top two countries with the greatest number of developers—the U.S. and India—ranked number 28 and number 31, respectively.
4. The labor cost in Mexico is more affordable
In 2011, Gartner rated Mexico as the only country with a score of “very good” in terms of cost. The Mexican government is very supportive of the business. Financing and resources are made available to strengthen nearshoring. Wages and the cost of living are also lower in Mexico than in the United States. According to the SG Salary Survey in 2017, a software professional in Mexico receives on average about 32,000 pesos ($1,687) in gross salary monthly. This will go higher, depending on the developer’s rank and experience. On the other hand, Los Angeles’ annual salary for tech in 2017 is $129,000, which translates into a monthly take of $10,750.
5. Mexico offers a better return on investment
Because of Mexico’s proximity to the United States, the lag time is a lot less. There are also less cultural differences, and more communication can happen because of the similar time zone. Project timeframes are shortened and deadlines easily managed. Labor cost is also significantly lower in Mexico. The attrition rate in the country is 12%, compared to China’s 27%, Brazil’s 12%, and Argentina’s 25%. Lowered overall cost and a shorter period of time mean a better return on investment.
Outsourcing software development depends on your needs. If your projects need the Agile process and are technology-intensive, it is best to choose a nearshore location.
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