Nearshoring Outsourcing is defined as outsourcing (handing-over) work to nearby countries that offer a competitive advantage due to decreased time zone differences, similar cultures, close geographical proximity, and/or economic advantages.
Mexico is also positioning itself to become the number 2 ranked IT Outsourcing company of the world by capitalizing on the Nearshore outsourcing model. This has sparked local talent enrichment initiatives and additional investment in that talent pool. This incentives help guarantee high quality talent similar to the talent in the United States and the resources become very similar to talent pool available with the onshore model, and combined with the The Mexico Technology Market facts, nearshore outsourcing becomes a key factor in the success of many companies.
The Mexico Technology Market has thrived on the nearshore model, and has made huge effort in pushing nearshore to become the number one solution for U.S based companies. (See more Details on The Mexico Technology Market Fact)
The Nearshore Model by Advancio is the best solution to IT departments since all project managers assigned are in California. Therefore, you get an OnSite service for a Nearshore price, but most importantly, you get the best nearshore software development team possible.
Outsourcing is usually introduced as a cost-effective and time saving strategic measure. Organizations usually seek outsourcing measures for various reasons. The most common reasons are the need for rapid growth, decrease existing operational cost, lack of local talent. But usually the most common reason to outsource any element of an IT development team is mostly related to the strong demand for talent in the industry.
Since the demand for IT professionals in the US is at an all time high there just are not enough bodies to fill the open positions. This causes their salaries and benefit packages to rise. In an attempt to control development cost outsourcing is introduced as a viable option. Most U.S. companies have outsourced and have history with it. Unfortunately one of the largest misconceptions is that outsourcing can only be done using the offshore model. This is largely do to India being the number 1 ranked outsourcing country in the US for IT development team. This is why whenever you talk about outsourcing it is assumed the option is synonymous with India. But, outsourcing has changed since it became popular a decade ago.
Outsourcing utilizing the offshore model alone can be challenging, largely in part, because outsourcing is being done to a country halfway around the globe. The time zones will have a large difference, cultures will be vastly different, and just these two reasons alone will kill any possibility for true communication understanding.
Nearshore outsourcing is the practice of getting work done or services performed by people in neighboring countries rather than in your own country. Many companies in the United States, for example, outsource work to Canada and Mexico. Geographic proximity means that travel and communications are easier and less expensive, there are likely to be at least some commonalities between the cultures, and people are more likely to speak the same language.
Nearshore outsourcing is commonly been used to address many of the concerns suffered while using the most common form of outsourcing, offshore.
Nearshore Outsourcing has solved the issue of time-zone differences. If the engagement model utilizes resources in the northern part of Mexico, the time difference from the western part of the united States will be eliminated down from 12 hours for Asia and Eastern Europe, to 0 hours in Mexico.
Nearshore Outsourcing to Northern Mexico, also known as "CaliBaja Mega-Region",to cities like Ensenada, Baja California, virtually eliminates all cultural difference to California and other states. With time differences and culture taken care of, Nearshore outsourcing works very similar to the OnShore outsourcing model, but offers economic savings and competitive advantages..
Nearshore outsourcing to Mexico is gaining momentum with economic incentives such as the Nafta Free Trade Agreement. Some of the benefits that come from this initiative are tax related, intellectual property rights, and the ability to migrate talent to and from. Making Nearshore Outsourcing a great option for U.S companies to adopt into their outsourcing strategy.
Mexico IT Offshoring market Ranks 3rd in the world and is aggressively working on becoming #2.
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 to and from the US for Mexico everyday). American companies can more easily work with their IT teams in Mexico.
130,000 graduating computer engineers every year.
NAFTA membership provides an added advantage to the US Market in ways such as: Intellectual Property rights are protected; free flow of goods, services, and talent without any travel restrictions.
In 2002, the government 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.”
The time zone differences give Mexico a great positioning as a great option for IT outsourcing to the US market.
Mexico is the gate to South and Central America as well as Northern America. That makes their culture both American and Latin all at once.
Google, Dell, Intel, IBM, Oracle, Nokia, BF Goodrich, American Express, Caterpillar, Coca-Cola.