As your business grows, so do your technology needs. In the “olden days,” small and medium-sized companies could get by without any specialized IT staff. Staying competitive in the modern market, however, requires adopting innovative technologies like cloud computing and artificial intelligence. Integrating such advanced digital technologies into core business operations is known as digital transformation, and it’s helping even the smallest companies meet their productivity goals and compete in the digital market.
At the same time, these technologies require staff with specialized expertise and education, and the competition to attract and retain such talent is fierce. According to a recent MIT poll, 56% of global tech leaders face an overall shortage of qualified technical candidates for open positions. With even the biggest tech companies in the world struggling to find tech talent, it can feel nearly impossible for smaller businesses to attract candidates with the expertise required for their digital transformation.
That’s why many organizations outsource some or all of their technical projects to an outside team. However, there are some downsides to working with offshore teams in vastly different time zones, like an inability to schedule meetings or get immediate answers to urgent questions. Hiring a nearshore team from a location like Mexico solves these workflow problems while still delivering significant cost and time savings, compared to hiring an in-house team.
This guide to nearshore software development in Mexico defines nearshore outsourcing, describes the benefits of hiring a Mexico-based team, and offers advice for guaranteeing the success of your nearshore software development project.
Table of Contents |
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What Is Nearshore Software Development? |
How to Guarantee the Success on Your Nearshore Software Development Project |
How to Choose the Best Nearshore Outsourcing Company |
Why Choose Divelement for Nearshore Software Development in Mexico |
Nearshoring is a category of outsourcing that involves hiring an outside team to complete some or all of a software development project. While offshore outsourcing uses an overseas team, often in Eastern Europe or Asia, nearshore outsourcing uses a team that’s much geographically closer. In the U.S. and Canada, nearshore software development usually takes place in Mexico or Latin America.
For U.S. companies, Mexico is the logical choice for nearshoring because of its geographic proximity. Agreements like the United States-Mexico-Canada Agreement (USMCA) also provide extra protections and benefits for doing business in Mexico. Additionally, Mexico has an established tech presence from major companies like IBM, Amazon, and Microsoft, which has created a large talent pool of Mexican developers with experience working with American teams.
Let’s dive deeper into the benefits of nearshore software development in Mexico.
Large Talent Pool | Despite a talent shortage in the U.S., there are approximately 700,000 tech workers in Mexico |
Time Zone Overlap | Close proximity simplifies real-time communication and collaboration |
Shared Cultural Values | Mexican software developers value feedback, communication, and collaboration |
Stable Economy | Mexico’s economic and political stability reduce the risk of doing business |
Cost Savings | Due to a lower cost of living, Mexico-based software experts are 2-3 times less expensive to hire |
Many U.S. companies are experiencing a shortage of available talent with the skills and experience required to achieve their high-tech initiatives. On the other hand, Latin America is one of the fastest-growing regions for software developers and engineers, with some sources estimating 700,000 tech professionals in Mexico alone. This makes it far easier to source nearshore software development talent than hiring and retaining a U.S.-based team.
One of the major downsides of outsourcing your operations to an offshore team is that time zone differences can slow communications and make scheduling calls and meetings challenging. A nearshore team in Mexico is never more than three time zones away, so it’s far easier to collaborate in real-time and get prompt responses to urgent questions.
Due to cultural differences, offshore software developers may not adhere to work and communication norms that your company is used to, which can cause friction and delays that impede project ROI. Mexico’s workplace culture is very similar to that of U.S. companies, and their software developers value feedback, communication, and collaboration. This makes it far easier to integrate Mexican developers into your team, even in a highly collaborative DevOps environment.
When you outsource your software development to an offshore team in an unstable region, you risk disruptions to your project due to outside forces like currency fluctuations, business closures, and political unrest. Mexico is ranked among the top 1/3rd of economies in the World Banks’s ease of doing business rating, indicating economic stability and a lower risk of business disruption. The technical outsourcing industry in Mexico is also very stable, growing at an annual rate of 10-15%, so your nearshore partner is more likely to stick with you for the duration of your engagement.
The sharp cost of living increases in the U.S., especially in tech hubs like the Bay Area, make hiring and retaining qualified software experts more expensive. Because of the lower cost of living, hiring a Mexican software developer costs roughly two to three times less than hiring a U.S.-based programmer with the same qualifications.
Choosing an outsourcing model | Decide between staff augmentation, managed team, or project-based outsourcing services |
Defining your requirements | Determine your business goals and technology requirements so you can hire the right experts for the job |
Planning (and sticking to) a budget | Maximize your ROI by researching outsourcing costs in advance and setting a realistic budget |
Researching Mexican culture | Avoid miscommunication by understanding Mexican workplace culture and having bilingual support. |
Take the following steps before you hire nearshore software developers to help start your project off on the right foot and see improved results.
There are three basic outsourcing models to choose from depending on your existing technical resources and the requirements of your project.
Staff Augmentation - You need to hire one or more nearshore software developers to fill specific experience gaps in your team, such as AI (artificial intelligence) expertise.
Managed Team - You’re hiring a team of developers to work on specific features or applications, and to potentially collaborate with in-house engineers and project managers.
Project-Based - You’re hiring a nearshore partner to handle every aspect of your software project, from design to release and potentially beyond.
Knowing which model is right for you and what you should expect from each will make it easier to work with your nearshore software developers.
You need to know the business goals and technical requirements for your software project so you can hire the right experts for the job. If you’re using nearshore developers to augment your existing team, you should know the specific technical background and expertise required for the role. For managed team and project-based engagements, you should prepare a more comprehensive set of requirements to ensure your nearshoring partner assembles the right team for the project.
It’s crucial to set a realistic hiring budget for the project and stick with it to ensure you see the best ROI. After you’ve established your hiring requirements, research the market average for those salaries in Mexico and find a range you’re comfortable negotiating within. The cost to hire entire teams or outsource entire projects will also be higher than the sum of staff salaries, which is important to keep in mind.
While Mexico’s workplace culture is very similar to ours in the U.S., there are still subtle differences that could potentially cause miscommunication or misunderstandings if you’re unfamiliar with them. For example, Mexican workers tend to value strict business hierarchies much more than American workers, so junior-level software developers are unlikely to disagree with their managers or pitch alternative approaches even if they know a better way to do things.
Additionally, though Mexican nearshore developers are typically fluent in English, having a basic understanding of common Spanish vocabulary and phrases could help streamline communications. If you have any bilingual staff within your company, it may help to have them translate your English emails into Spanish so you can send communications in both languages and ensure no misunderstandings occur.
Not every nearshoring company provides the same services or the same quality of talent, so finding the right provider is crucial to your project’s success. You should evaluate potential outsourcing partners to determine:
If they provide the outsourcing model you require.
If their team has the technical expertise needed for your project.
If they’ve handled similar projects in the past.
If they’ve established a track record of on-time delivery.
If previous customers would recommend their services.
Many nearshore outsourcing companies are based in the U.S. Still, it’s important to meet (virtually) with a representative from the nearshore team in Mexico so you can ask pertinent questions about their staff’s communication style, English language fluency, and technical expertise. Not only will this help you establish a positive working relationship from the very start of the project, but it’ll also allow you to determine if the partnership is the right fit.
Divelement believes the best nearshore outsourcing experience should feel just like working with an in-house team, but without the hassles of recruitment and training. We prioritize communication and collaboration and work hard to integrate our technical experts with your existing team using top DevOps tools like Slack and GitHub.
We also know the speed and agility of a software project can make or break your ROI, which is why our teams use Agile practices like crosstraining and role-sharing to streamline our operations and deliver products faster. Our collaborative workstyle, efficiency, and results-driven approach mean that 96% of our customers would refer us to other businesses.
Schedule a discovery call today to learn more about the benefits of hiring Divelement for nearshore software development in Mexico.
