Software Development Trends 2020: Outsourcing in Mexico
There’s a familiar saying that you need to spend money in order to make money. The concept of upward momentum for businesses is spurred by the unrelenting knowledge that every step forward is an investment. Effort is applied to every deal, every phone call, every line of code written and rewritten in the hope that that work is an investment that pays off.
As the software development market continues to inflate, the challenge of matching high quality and production standards remains omnipresent. Investments aren’t guaranteed to pay off if you can’t afford the skilled employees, time crunches, and resources it takes to see them to fruition. Operating solely as a 100% American grown business isn’t as feasible as it was in the 20th century.
Software development needs reliable ROI to thrive, and to do that has led many organizations to look beyond the U.S. borders. Outsourcing has steadily been garnering popularity, following past trends of U.S. businesses to outsource in offshore locations with the intention of increasing ROI by reducing costs and thus reducing time-to-market of products and services. The name of the game is achieving the highest quality production value while spending the minimal amount.
Outsourcing in any way allows you to wrap up projects quickly and effectively by accessing needed talent that would be difficult to maintain in-house. We plan that, by following the software development trends as we lead into a new decade, we can shine some more light on the circumstances that have given outsourcing the room it needed to thrive as well as how we might expect it to further evolve within the next 10 years.
Bringing Outsourcing Closer to Home
The very mention of outsourcing drudges up negative connotations: sweatshops in the Philippines, customer service that never helps address the actual problem, and the driving of American jobs to foreign powers. These preconceptions are bad for a litany of reasons, but they have one thing in common: distance. The farther work is sent from the homeland, the greater impact it has in the mind of the sovereign citizen.
There’s something of value there. Outsourcing isn’t the boogeyman, but it’s historical usage has been declining in popularity. The fact is that working with a team on the other side of the globe isn’t practical in software development. As technology advances, the development process has evolved to address it with reactive, precise work ethic. But how are you able to work quickly on a project with a team you can’t easily communicate with?
Agile teaming does not work without real time collaboration.
Outsourcing trends have shifted from selecting extended teams in extremely remote locations to opting for closer, but still highly skilled, companies who can provide a better, more personal, more effective experience. Round-the-clock development is nothing but a myth: time differences, language barriers, cultural misunderstandings, and overall bad customer service are some of the issues that may arise with offshore partners.
You know what doesn't suffer from those problems? Nearshore outsourcing teams. Rather than shipping IT work off across the water, nearshoring brings to work closer home. By practicing outsourcing IT to a country that is closer geographically, companies are able to easily share same or similar time zones, shorter flights, similar lifestyles, and deeper cultural connections. In this case, one of the most popular options is Mexico.
As the closest nearshoring option, Mexico allows for better collaboration both remotely and face-to-face. Language barriers are practically nonexistent. Beyond states that share the border, most Mexicans grow up listening to American music, watch U.S. television daily, get together for Super Bowl feasts and simply have similar political and cultural perspectives.
The U.S. has similarly been affected by Mexico’s rich cultural history and presence. Having been on the rise for decades, Spanish is the second most common language in the United States, with millions of students being taught it in school every year. Popular cuisine, traditions, and customs have similarly been appreciated by the American people.
Similarities, convenience, and a stronger bottom line have resulted in the recent shift towards nearshore outsourcing to Mexico, bridging the IT power of two accomplished nations.
Shifting Focus from Cheapest to Cost Competitiveness
As explained previously, the core reason for outsourcing is to increase ROI by decreasing development costs and time to market. The logic is straightforward: the less you spend and quicker you can get a product to the public results with a greater return on the investment you put into the project. The problem is that, in our globalized reality, mere cheap labor costs are not top-of-line indicators of success anymore.
Throwing your whims to the wind and choosing the cheapest possible option may have worked 100 years ago, but standards are higher now. If your product doesn’t meet the consumer’s expectation, they will simply go with a different option and leave your work gathering dust in the closet. What this means for outsourcing is that, rather than opting for a service that’s pennies on the dollar but delivers lower quality work, you’ll have to opt for one that’s closer to dimes with better results.
As offshoring nations led the IT outsourcing industry years ago due to less competition, businesses are migrating quickly to delegate their business operations to countries that may not offer the lowest hourly rates but ensure better experiences that translate to successful projects. Think about it this way: what’s more costly? Hiring highly skilled teams for higher hourly rates, closer to home, that deliver quality products? Or hiring cheaper developers under circumstances that may hinder the flow of the project, resulting in monetary losses?
Software development is more like a marathon than a 100m sprint. Time is important, but without monitoring your pace, your resources, and your efficiency, you’ll burn out too quickly. Rather than rushing development and pushing a cheap team to meet a short deadline, you’re better off choosing an option that yields better results through sheer cost competitiveness.
Prioritizing Strong Protection of Intellectual Property
You’ve got a natural and obvious determination to protect what’s your if you’re in any kind of business, not just software development. Anything original that came from your hands, your company, represents effort, time, and resources poured into a product you’re proud to call your own. Anything that holds that sort of value draws attention, leaving you to make the effort to protect your product, your work, your intellectual property.
Thankfully, IP protection has staunch support within the bounds of the United States, but the prospect of outsourcing may make you sweat a little. Before delegating your business transformation to any third party services provider, you have to make sure your ideas will be protected under law. IP protection is a vital part of IT outsourcing. The United States provides tough laws for IP protection, making it a great location for software development success. It only makes sense for companies looking to outsource their IT projects out of the U.S. to only consider countries with the same respect for intellectual property.
As you may surmise, Mexico happens to be one of the top candidates that fits the requirements for sufficient intellectual property protection. Not only do they have several laws devoted to IP protection, they also fall under those included in the USMCA: the United States-Mexico-Canada Agreement. This piece of legislature, once fully ratified, binds these three countries under protective laws and incentivizes digital trade.
Since the USMCA only applies to Mexico, Canada, and the USA, no other nearshore Latin America countries share the same high caliber standards that help maintain product quality between these three nations. This benefit ensures that everything outsourced to Mexico will bear the same scrutiny and protection as if the product were made in America.
Building Partnerships that Last
Let’s be honest: it’s not profitable for any company to jump through providers for every project they come across. Not only is it a costly process, you’re essentially starting from scratch with an unfamiliar team and partner, which can slow down development as you acclimate to working with each other. The better you can synergize with a provider lends to the overall speed and quality of the product you’re collaborating on. Reaching that synergy is not a quick 12 step program you can knock out over the weekend.
Every new extended team you meet needs to be introduced for the first time to your company’s needs, values, purposes, goals, ethics, and way of doing business, as well as tacking on the added risk of successfully completing the project they were hired for. Doing the meet and greet every time you switch providers is uncomfortable and untenable. What you need to find is a partner that will stick with you for the long run, for as many projects as you’ll need their services for.
The ultimate goal is to find the provider who is the best fit for your company both economically and culturally. You want your extended team to become part of the family despite their location away from home. As it was previously mentioned, for Agile methodologies to exist, teams need to have cohesion and effective communication. Taking into account how trends have been leaning with this article so far, you can guess where we’re goin with this: Mexico.
Mexico meets the requirements to become an enduring Nearshore provider like no other country can. They’re capable of providing easier face-to-face team meetings and bear cultural similarities. They’re much like our neighbor next door. With the ease of communication and geographical locality, building and maintaining a lasting, meaningful relationship with an outsourcing provider across the border is more reliable and convenient than any competing options.
IT outsourcing has, like most outsourcing, an origin across the pond, starting with long-standing top providers such as China, Ukraine, and India. Admittedly, these countries still maintain high quality work, but we’re talking about where the trends for the new decade are leading. Offshore outsourcing may have worked years ago, but business practices and standards have begun directing business focus south.
The evolution from offshore to nearshore has prompted increased attention on the #1 U.S. trading partner: Mexico. By working with our border neighbors, businesses can bring work closer to home while achieving greater cost effectiveness, strong protection of intellectual property, and building long lasting relationships.
Bridging this gap is among one of iTexico’s specialties, bringing together American software development companies with the best software engineers that Mexico can offer. We don’t just work with numbers on a spreadsheet, rather we find the interpersonal and professional connections necessary to encourage the greatest success possible for all involved. If you’re interested in learning more about our mentality and services, feel free to reach out to us through our contact page.
Who knows? You may find that outsourcing south may be the best decision you’ll ever make, and we’re here to help you make it with full confidence.