Tag: nearshoring

How Nearshoring Can Help Your Business Achieve Sustainable Growth

How Nearshoring Can Help Your Business Achieve Sustainable Growth

Posted on | by TeresaPenafiel | 1 Comment on How Nearshoring Can Help Your Business Achieve Sustainable Growth

Sustainable growth is the holy grail for most businesses, and achieving it requires a combination of factors. One crucial element is a competent and cost-effective workforce. Nearshoring, the practice of outsourcing business processes to a nearby country, is an effective strategy to achieve sustainable growth. 

In this blog post, we will explore how nearshoring can help your business grow sustainably and why Mexico is an attractive nearshoring destination for US companies.

The Benefits of Nearshoring

Nearshoring has become an increasingly popular option for businesses in recent years, and for good reason. There are several benefits to nearshoring, including:

Cost savings

One of the most significant advantages of nearshoring is cost savings. Accordingly, businesses can take advantage of lower infrastructure costs in nearby countries while avoiding the high costs associated with offshoring to distant countries.

Improved communication

Nearshoring allows for easier communication between businesses and their outsourced teams due to similar time zones and cultural similarities. This can lead to more efficient collaboration and fewer misunderstandings.

Access to a skilled workforce

Mexico has a large pool of skilled workers, particularly in the areas of engineering, manufacturing, and IT. This makes it an attractive destination for businesses in these industries.

Stable political environment

Mexico has a stable political environment and a well-established legal system, which can provide businesses with greater security and stability.

Infrastructure

Mexico has invested heavily in its infrastructure in recent years, particularly in the areas of transportation and telecommunications. This has made it easier for businesses to operate in the country.

How to Achieve Sustainable Growth through Nearshoring

Nearshoring software development to Mexico can be a viable strategy for achieving sustainable growth for your business. However, to maximize the benefits of nearshoring, there are several best practices you should follow. In this section, we will discuss some tips on how to achieve sustainable growth from nearshoring software development to Mexico.

Choose the Right Partner

The first step in achieving sustainable growth from nearshoring to Mexico is to choose the right partner. Look for a partner with a track record of success in software development and nearshoring. Your partner should also have experience working with clients in your industry and should be able to provide references.

Define Clear Expectations

It is essential to define clear expectations from the outset. This includes setting project timelines, milestones, and deliverables. Be clear about your goals, and make sure your nearshore team understands what you are trying to achieve.

Establish Positive Company Culture

Establishing a positive company culture is critical for building a successful nearshore team. Make sure your nearshore team feels like a part of your company culture, and treat them as you would any other member of your team. This includes celebrating successes, providing feedback, and investing in their development.

Monitor Progress Regularly

It is essential to monitor progress regularly when working with a nearshore team. This includes tracking key performance indicators (KPIs) and conducting regular performance reviews. Regular monitoring will help you identify any issues early on and make adjustments as needed.

Nearshoring to Mexico can be an effective strategy for businesses looking to achieve sustainable growth. Mexico offers many advantages, including cost savings, access to a skilled workforce, and a stable political environment. Overall, nearshoring to Mexico is a viable option for businesses looking to grow sustainably while maintaining control over their operations.

Are you considering nearshoring to Mexico? Schedule a call with us.

About ITJ

ITJ is devoted to serving fast-growing and high-value market sectors, particularly the Internet of Medical Things (IoMT), working with innovative medical device companies looking to improve people’s lives. With a unique BOT (build, operate, and transfer) model that sources only the best digital talent available, ITJ enables companies in the US to create technology centers of excellence in Mexico and LatAm. For more information, visit www.itj.com.

The Cost Savings of Nearshoring vs. In-House Development

The Cost Savings of Nearshoring vs. In-House Development

Posted on | by TeresaPenafiel | 3 Comments on The Cost Savings of Nearshoring vs. In-House Development

In today’s globalized world, businesses need to keep up with the fast-paced technological advancements to stay relevant in their respective markets. One of the most important decisions businesses have to make is whether to nearshore their software development or keep it in-house. 

We’ll explain the differences between these two models to you and help you decide which one will work best for your company. To begin with, in-house development simply denotes the employment of internal IT resources and staff to develop software within your business. As an alternative, nearshore development refers to working with a partner who is based in a nearby country while outsourcing.

Cost Savings of Nearshoring

Nearshoring is becoming increasingly popular in recent years due to its many benefits, including cost savings. By nearshoring, businesses are able to access top talent at a lower cost than in-house development.

One of the main reasons for cost savings is that nearshoring companies often have lower labor costs due to the lower cost of living in their respective countries. For instance, software development salaries in Eastern Europe and Latin America are often lower than in the United States or Western Europe. This cost difference allows businesses to save money without compromising the quality of the final product.

Another significant cost-saving advantage of nearshoring is the reduced overhead costs. By nearshoring software development, businesses do not have to worry about the expenses that come with hiring, training, and retaining employees. Accordingly, nearshoring companies take care of these expenses and ensure that they provide the required resources to deliver a quality product.

Additionally, nearshoring helps businesses save money on infrastructure costs. Nearshoring companies typically have well-established infrastructures, including hardware, software, and other tools required for software development. Basically, this means that businesses do not have to invest in infrastructure to develop software. The nearshoring company already has everything in place, making the process much more cost-effective.

Cost Savings of In-House Development

In-house development involves hiring software developers and setting up a development team within the business. Although this option has its advantages, such as better control over the development process and access to specialized knowledge, it can be expensive. Below are some of the reasons why in-house development can be costly:

Hiring and Training Costs

To build an in-house development team, businesses need to hire developers, managers, and other support staff, which is expensive. Additionally, businesses need to spend time and money on training and development to ensure that the team members have the necessary skills to develop quality software.

Overhead Costs

In-house development requires businesses to provide office space, hardware, software, and other resources to the development team. These expenses add up quickly, particularly in high-cost locations. For instance, office rent in major cities can be very expensive, and businesses may have to invest in expensive software and hardware to ensure that the team has everything they need to develop software.

Management Costs

In-house development teams require management, which can be time-consuming and costly. In fact, businesses may need to hire a project manager or team lead to manage the development team, and this can add significant costs to the project.

The decision to nearshore or keep software development in-house ultimately depends on the business’s specific needs. However, as we’ve seen in this blog, nearshoring offers significant cost savings over in-house development. By nearshoring, businesses are able to access top talent at a lower cost, reduce overhead expenses, and save on infrastructure costs. These cost savings can be particularly attractive to small and medium-sized businesses that need to stretch their budget further.

It’s essential to remember that cost savings should not come at the expense of quality. When nearshoring software development, businesses must ensure that the nearshoring company has the skills, expertise, and resources to deliver a quality product. You have ITJ here to help with that, so feel free to ask any questions you may have. Get in touch with us!

About ITJ

ITJ is devoted to serving fast-growing and high-value market sectors, particularly the Internet of Medical Things (IoMT), working with innovative medical device companies looking to improve people’s lives. With a unique BOT (build, operate, and transfer) model that sources only the best digital talent available, ITJ enables companies in the US to create technology centers of excellence in Mexico. For more information, visit www.itj.com.

Top Mexico Nearshoring destinations for software engineering 2023

Top Nearshoring Destinations for Software Engineering in 2023

Posted on | by TeresaPenafiel | 3 Comments on Top Nearshoring Destinations for Software Engineering in 2023

The field of nearshore software engineering is always changing. It’s critical to comprehend the trends that will drive the market in 2023 if you want to keep one step ahead of the competition, especially when considering a nearshore destination.

The nearshoring of jobs to other nations has received a lot of attention. According to a recent report by Grand View Research, the global nearshoring market size is expected to reach 525.2 billion by 2030, growing at a CAGR 9.4% from 2023 to 2030. The survey also discovered that nearshoring is most common in the manufacturing, healthcare, and IT services sectors.

And for US companies, the obvious choice is Mexico. Why?

Mexico’s Economy Overview

Mexico is at the top of Latin America’s rankings for innovation, business accessibility, and competitiveness. The Mexican government started a series of changes in the middle of the 2000s to promote competition and expand the nation’s energy and telecoms markets.

Telecommunications expenses have decreased significantly as a result, and service accessibility has grown, providing the groundwork for a developing digital economy. Furthermore, denationalization of the energy industry has boosted foreign investment, raised production, and sped up the transition to renewable energy sources. INADEM (the national institute for the entrepreneur) put government funding in a different project to kick-start the venture capital sector.

US firms are well-protected in Mexico with regard to patents and other intellectual property rights. These efforts were strengthened even further with the assistance of the Free Trade Agreement (FTA) that Mexico has with other nations with the signing of the United States-Mexico-Canada Agreement (USMCA). The USMCA has a number of provisions that modernize the mechanisms for protecting and enforcing intellectual property (IPR) in Mexico, including registration, preservation, and enforcement systems. The agreement guarantees that rights holders in the United States will obtain IP protection equal to that found in the United States, even though the regulatory institutions that oversee IPR in Mexico differ from those in the United States.

Moreover, findings reveal that during the majority of the years considered, nations like Mexico, Brazil, Chile, Argentina, Panama, and Cuba have held the top spots in the quality-of-inventions rankings. Yet, it is clear that Mexico contributes significantly to the region’s patents and has held the top spot in the overall ranking for nine out of the twenty years of the study. Also, out of the seventeen nations, the nation has never fallen below third rank since 2000.

So, where do most US-based IT companies primarily operate?

Best Nearshoring Destinations for IT Services in Mexico

In 2023, there are several top nearshoring destinations for software engineering that stand out from the rest, based on factors such as quality of talent, cost-effectiveness, and cultural alignment. Here we will explore the top three nearshoring destinations for software engineering in 2023:

1. Tijuana, Baja California

The magnitude of investment in Tijuana, Ensenada, and Mexicali, which takes advantage of the region’s proximity to San Diego and California, is what distinguishes Baja California from other regions. This has made it possible for the Cali-Baja region, as it is known locally, to have a vibrant cross-border business.

Tijuana is quickly emerging as a top nearshoring destination for software development in 2023. According to a recent report by Tholons, Tijuana is ranked among the top 50 digital nations in the world, ahead of other well-known nearshoring destinations like Costa Rica and Chile. The city boasts a strong technical talent pool, with a growing number of graduates from local universities specializing in computer science and engineering. In addition, top-tier educational institutions are well-known for their software engineering programs and high achievement rankings, plus the state has 32 universities offering 103 professional degrees. 

One of the key advantages of nearshoring to Tijuana is cost-effectiveness. The cost of living in Tijuana is significantly lower than in major U.S. cities like San Diego, which is just 20 miles away. This means that companies can benefit from lower costs of living and costs of offices while still maintaining a close proximity to their operations in the United States. In addition, the Mexican government offers several tax incentives to companies that set up operations in the country, including a reduced corporate tax rate for software engineering companies.

Another advantage of nearshoring to Tijuana is its growing reputation as a hub for innovation and technology. In recent years, the city has seen a surge in the number of tech startups and incubators, which has led to a more dynamic and entrepreneurial culture. This, combined with the strong technical talent pool, makes Tijuana an attractive destination for companies looking to stay on the cutting edge of innovation in software engineering.

2. Guadalajara, Jalisco

Jalisco is the fourth-largest economy in Mexico after Mexico City, the State of Mexico, and Nuevo Leon. The state shows strong rankings for innovative companies and startups, trademark and patent applications. Furthermore, 40% of Mexico’s IT firms are located in the manufacturing-heavy state of Jalisco, which is also a home to businesses that specialize in BPOs, software engineering, and other leading industries.

In Guadalajara, there are more than 1,000 high-tech companies supporting 150,000 jobs, plus significant clusters in the fields of technology, e-commerce, financial services, healthcare, and transportation. Moreover, Guadalajara, in contrast to other regions in Mexico, has a strong R&D foundation.

The government, universities and industries have consistently aligned and collaborated to create projects like Consejo Jalisco 4.0, the Jalisco Institute of Information Technology (IJALTI), the Jalisco State Council of Science and Technology (COECYTJAL). These organizations had helped to attract international investment and companies to Guadalajara, despite the location far from the US border.

3. El Bajío, Central Region of Mexico

The Bajío region in central Mexico provides intriguing potential while not being as far along in its efforts to create startup and innovation ecosystems. This region includes parts of the states of Zacatecas and Jalisco as well as all or part of the following four states: Aguascalientes, San Luis Potos, Guanajuato, and Querétaro, which is a significant manufacturing hub that has had stronger growth than much of Mexico.

Particularly among the Mexican states, Aguascalientes, Guanajuato, and Querétaro have high levels of economic competitiveness. The region has emerged in recent decades as one of the top investment destinations for foreign capital, second only to the northern border states, particularly in the automotive and aerospace industries. A sizable IT sector is expanding thanks to a robust university and public technology research infrastructure.

To sum up, nearshoring is a fantastic opportunity for US companies to continue their operations in a place with vast talent pools, with cost-effectiveness, same time zone, and cultural proximity. Mexico is becoming a more popular location for nearshoring, and this growth is expected to continue in 2023. You just have to choose your nearshoring destination.

Contact us at ITJ to learn more about how we can make that happen.

About ITJ

ITJ is devoted to serving fast-growing and high-value market sectors, particularly the Internet of Medical Things (IoMT), working with innovative medical device companies looking to improve people’s lives. With a unique BOT (build, operate, and transfer) model that sources only the best digital talent available, ITJ enables companies in the US to create technology centers of excellence in Mexico. For more information, visit www.itj.com.