Committee Post: Is Now the Best Time to Start Nearshoring Software Development to Mexico?

Maritza Diaz, CEO Ipjuana.

Starting nearshoring from zero can be challenging for any company. You may hear stories about the challenges of dealing with overseas partners, or you may have personal experiences with them. But the fact is, working with an offshore vendor can help you get better software for less. They can handle your software needs while you focus on your business.

So, why is Mexico an option to consider nearshoring?

The upside is that the nearshoring of software development in Latin America has been going on for years now. Especially because Mexico has a long history of being commercially open to expand and diversify its economy. By providing privileged access to around 50 markets, it became clear that the country had the potential for nearshoring to its neighbors. According to american industry group, Mexico is a country with tremendous nearshoring potential in the Americas. Mexico’s strategic location, superior connectivity, and long history of openness to trade have made it the number one choice in North America for foreign companies looking to expand their business to locations with competitive prices and market access.

Also, Mexico is now an American largest commodity trading partner, in excess of $614.5 billion in annual commerce. Thanks to NAFTA, exports and imports have greatly expanded, and domestic investment is also active. As a result, Mexico’s economy is heavily dependent on offshore software development.

there is also Huge Talent Pool. Because Mexican universities produce a lot well trained engineer, there is no shortage of technical experts in the enterprise. Offshore software development resources like Mexico have the same talent pool as the US, but finding the right engineers and experts at a reasonable rate is much simpler.

The real question is: Is now the time to start nearshoring software development to Mexico?

It can be difficult for a business to go offshore for the first time. If you don’t know when the best time to act and who to choose to partner with, the risk, small or large, still exists.

The best time to go offshore is when the word “expansion” comes to mind multiple times at company meetings, or when business income reserves and software development rates are high. The organization then delegates software development and maintenance tasks to software development teams in neighboring countries.

Frequently asked questions for those looking to get started include “What types of businesses or businesses can operate in Mexico?” And “When is the right time for offshore Mexico?” Nearshore software development isn’t necessarily the best or best solution for every company. However, with a strong claim to provide the best price-quality ratio between onshore, onshore, offshore and offshore options, it is the best solution for many. Some believe that only wealthy multinationals can move production to Mexico. This is not true. Many multinational companies have established facilities south of the border, but there are many smaller ones. In short, size is not an obstacle. If you’ve ever considered manufacturing in Mexico, you can start here.

Nearshoring can also help businesses stay competitive by hiring qualified people who live in time-zones but low cost of living. It’s important to familiarize yourself with the steps involved in expanding your business into Mexico and remember to evaluate the legitimate big picture. When setting up a Mexican corporation for a company, in most cases the Build, Operate, Transfer (BOT) model is the most efficient way to follow.

Now it’s also important to note some pitfalls or obstacles you want to avoid when starting the nearshore process.

The Mexican incorporation of the company takes 12 to 18 months to complete, so you can anticipate and follow a different route. Second, Mexico’s contracting rules changed last April, as companies may no longer contract personnel involved in their core activities, and many staffing companies have hired contractors and withdrew from the Mexican market. They now have to hire themselves. This new change could be a downside because hiring full-time employees is more expensive than hiring contractors. However, it is also an opportunity to adopt the BOT model.

After comparing the pros and cons of nearshoring in Mexico, you are ready to make a decision. Sit back and thoroughly consider your options for choosing the best moment. Mexico’s software development industry is expanding rapidly. With a focus on high-quality technical training, Mexican talent meets the unique needs of a diverse team, but can be supplemented with offshore resources not readily accessible locally.

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