Mexico's Advantage

Studies have shown the cost benefits of outsourcing to overseas countries are substantial providing up to a 75% according to some estimates. While the benefits are significant, there are many risks involved. Studies have also shown that while savings may seem dramatic much of these benefits have been negated by prolonged development efforts due to delays in communication as consequence to large time zone and cultural differences in addition to other incurred costs such as travel and the need for Bridge Management.

As time progresses services rates for overseas countries are steadily increasing due to rising costs of production. As a result true cost benefits have declined to below 30% according to some estimates.

As a consequence to these issues, the many in the US market have been steadily looking for more viable solutions by seeking resources elsewhere in countries such as Mexico. Mexico offer further appeal in its globalization model as a result of inherent advantages stemming from geographical positioning, time zone, cultural similarities and struggling economies.

Additionally, rates offered by these countries continue to maintain competitive grades while overseas country rates are steadily increasing and loosing appeal.

Mexico is an obvious choice due to its close proximity and its tight interaction with the US market.

Mexico’s appeal is steadily increasing as the Mexican government has shifted focus and is providing companies with global vision a better environment in which to do so with efforts such as NAFTA, education, certification requirements and fiscal incentives.

Mexico in a Global Context

  • World’s 10th economy
  • United States 2nd trade partner just behind Canada
  • 4th country in number of airports and 1st in daily flights to and from the United States
  • Mexico enjoys the most extensive free trade agreements network worldwide
  • Rank 4th in per-capita foreign direct investment received
  • 6th country in business efficiency
  • 7th exporting economy
  • Ranked 12th in lifestyle satisfaction

Quick Facts

  • The US, in its technological achievement index, positions Mexico as the best Latin-American country.
  • The North American Free Trade Agreement “NAFTA” sets the groundwork to provide certainty to parties in the cross-border commerce of services between Mexico, US and Canada. Intellectual property is protected under this umbrella thus providing hiring entities the means to avoid legal processes abroad.
  • Mexico is the geography that offers the lowest operational costs in North America.
  • Because of proximity, Mexico presents a better alternative to countries such as India or China for service effectiveness and total cost of IT projects
  • Forrester Research recommends:
    “Companies interested in the cost and quality benefits of offshore labor, but which require a closer, less risky solution should strongly consider Mexico as an important nearshore option.”