4 Advantages of Nearshore Software Development in Mexico for Business Growth

The rapid growth of the tech business landscape can be witnessed by this one central fact: tech companies are some of the largest businesses in the world. Because of the industry's competitive nature, companies are always looking to stay ahead by launching better and faster than their competitors. Many do so by taking advantage of the benefits of nearshore software development. For US-based businesses, this often means looking south of the border to Mexico. In this article, we will discuss:

• What nearshore development looks like and what advantages it holds for US businesses
• The history of nearshoring in Mexico and what we can learn from it
• Pros, cons, and best practices of nearshore outsourcing to Mexico
• How to find a reliable nearshore development team to partner with for your next launch

What Is Nearshore Software Development?

As the term indicates, “nearshore development” refers to the practice of outsourcing software development to a team of engineers living in a geographically adjacent country. Because geographically proximate countries often share an overlap in languages, time zones, and cultural compatibility, nearshore development is seen by many as an easy and cost-effective way to hire the best people for the job across borders. In today's globalized business environment, with technological advances making it easier than ever for teams to meet remotely and work asynchronously, there’s never been a better time to consider a pivot to nearshore software development. Nearshoring software development can help:

• Foster effective collaboration. Fill in the skill gap of your in-house software team with nearshore developers who have the very skills needed for your next big project.
• Mitigate risks. While regulations differ from country to country, fully vetted nearshore teams in North America generally share similar legal frameworks related to intellectual property (IP) and security protections. Offshore teams located on the other side of the world may not.
• Balance cost-efficiency and quality. While it is true that nearshore software development outsourcing narrows the unlimited global talent pool (and could, therefore, affect the quality of the engineers you will hire), the cost-efficiency related to the speed aided by proximity and cultural affinity cannot be overlooked.

Here in the United States, when most businesses are considering availing themselves of the advantages of nearshore development, most of them look to Mexico as the optimal nearshore development destination.

A Short History of Nearshoring to Mexico

When it comes to nearshoring, US companies have a demonstrated history of success in working with developers in Mexico.

Nearshoring First Gaining Traction

The nearshoring boom began in 1989 with the advent of the North American Free Trade Agreement (NAFTA), which eliminated tariffs, duties, and quantitative restrictions between businesses and goods passing among the US, Canada, and Mexico. From NAFTA to the United States-Mexico-Canada Agreement (USMCA) that replaced it in the summer of 2020, nearshoring has been continually on the rise.

Nearshoring’s Constant Evolution and Growth

As nearshoring has become increasingly important in the tech world, Mexico has risen to the top as one of the global leaders in North American nearshoring partnerships. Mexico’s rise as a global tech hub is a fascinating one. Government-sponsored programs to encourage education, skill growth, and tech innovation—combined with a population shift toward major cities over the past few decades—have almost inevitably led to a genuine tech boom. Business cities like Mexico City, Guadalajara, Torreon, and Monterrey have emerged as hotspots for tech talent, fostering a vibrant startup culture and attracting multinational companies. These cities are home to renowned technology parks, incubators, and accelerators, providing the necessary infrastructure and support for budding entrepreneurs. (Mexico Business News) It was only a matter of time before the market in North America took notice of this shift. Through the power of nearshoring, US businesses can leverage these skills for themselves and their own projects.

Nearshoring in Response to the 2008 Economic Crisis

In truth, US interest in nearshoring has not been wholly consistent. However, certain events have amplified interest. One of those events was the 2008 economic crisis. As companies looked to tighten their belts and lower costs during the recession, many turned to nearshore software development services as a way to save money. Once they made the switch, the rest—as they say—was history.

Nearshoring as an Adaption to the COVID Pandemic

It’s safe to say that nothing in recent history has impacted the global workforce quite like the COVID-19 pandemic. This is particularly true regarding remote work, which saw a sharp spike in popularity starting in 2020. Naturally, with remote work becoming increasingly normalized, particularly in the tech world, companies are now more open to considering remote tech talent and offsite development teams.

The Talent Pool in Mexico

As indicated above, Mexico's IT sector has exploded in recent years, both in response to supply and demand and through intentional cultivation on behalf of programs sponsored by the Mexican government to invest in STEM disciplines. This approach has paid off. According to the most recent data verified by the US Department of Commerce, Mexico has 38 distinct IT clusters throughout the country. Mexico’s expert services related to software engineering and development include:

• Cybersecurity
• Mobile apps and payment solutions
• Cloud computing, security, and analytics
• Business intelligence software
• Data center infrastructure
• Integration services

One of the reasons nearshore software development in Mexico is such an attractive option for US companies is that both private and public Mexican educational institutions prioritize international education so their students can become competitive in the international market. As a result, many Mexican IT leaders actually receive their education and training in the United States or Canada. In the 2021-2022 academic year alone, nearly 15,000 Mexican students were enrolled in US schools, and the percentage of Mexican IT students training in the US continues to rise every year. Those who have been trained in Mexico also are exposed to international business practices through participation in programs run in cooperation with international schools. This leads to a workforce that has more than just educational certifications and technical expertise. Because many in the IT sector have also participated in international programs, many are multilingual (fluent in Spanish, English, and other languages) as well as culturally competent.

4 Advantages of Nearshore Software Development in Mexico for Business Growth

While there are a wide array of reasons why companies seek nearshore outsourcing to Mexico, here are the top four reasons to consider collaborating with a nearshore team on your next software development project.

Advantage 1: Cost-effectiveness

Because Mexico has an overall lower cost of living than the US, it’s possible to pay nearshore teams a more than livable wage and still cut costs. In comparison to other popular IT outsourcing destinations across oceans, the Mexican minimum wage is still lower and increasing at a slower rate, making it possible to save money through nearshoring without sacrificing quality.

Advantage 2: Time Zone Alignment

While many aspects of a collaborative IT project can be worked on asynchronously, there are times when synchronous communication is absolutely vital. Working with custom software development teams that are in your exact time zone (or only one hour away) can lead to enhanced collaboration and reduced turnaround times.

Advantage 3: Cultural Compatibility

Though there are some distinct cultural differences between Mexico and the US, they are not broad. By and large, workers in North American countries share basic values and foster similar work cultures. Nearshoring with Mexican developers presents minimal cultural barriers and leads to effective collaboration.

Advantage 4: Access to a Skilled Talent Pool

Thanks to the educational initiatives and solid in-country and study-abroad training programs mentioned in a previous section, the tech talent landscape in Mexico is currently very strong. Those looking to partner with a nearshore development team in Mexico for IT solutions and support will have no trouble finding talent. Recent stats place Mexico’s software development talent pool at 700,000, with 130,000 new software engineers graduating yearly. Specific skills and expertise available in Mexico include:

• Data centers
• Cybersecurity
• Automation and AI
• Mobile app development
• Cloud computing solutions
• Software as a service (SaaS)
• IT administrative and consulting services

Best Practices for Nearshore Collaboration

Although nearshore collaboration can prove extremely beneficial, you will only be able to maximize your experience if you follow established best practices.

Establish Clear Project Goals

Like any partnership, nearshore collaborations work best when everyone is on the same page. For that to happen, you must establish and communicate clear project goals to your nearshore development team. From the outset, be sure to provide the following:

• Detailed project documentation. Your nearshore team should have access to everything they need to carry out the project successfully, including systems, assets, deadlines, etc.
• Milestone tracking. Whether you use project management software or appoint a project manager to oversee the project, it’s vital to have a system in place to track milestones and keep the project on track.
• Reporting. Having established structures in place for regular reporting is a must.

Build Strong Communication Channels

For the partnership to succeed, you must take the lead both in establishing priorities and touching base regularly on timelines and deliverables. Fortunately, we live in an age when regular video conferencing makes personal connections and synchronous remote meetings possible. Additionally, choosing collaboration tools to provide asynchronous touchpoints is an absolute must for completing a project with an offsite nearshore collaboration team.

How Do I Get Started?

Finding a reliable nearshore partner for software development in Mexico can feel like an overwhelming task. With so many options available, how do you know whom to choose? Your best option is to choose a partner with a proven track record in the industry. That’s where ParallelStaff Software Development Solutions comes in. We work only with experienced professionals who have a demonstrated history of dependability, integrity, and technical expertise. Our team of IT professionals offers the following specific software development solutions:

• Software development. Launch faster by working with one of our results-driven teams.
• Back end development. Ensure your website is ready to go and running clean as a whistle exactly when you need it.
• Full stack development. Not quite up with end-to-end development? Augment your team with skilled full-stack developers.
• Mobile development. Nearshore programmers can cut your app development time, freeing you and your team to focus on other urgent matters leading up to launch.

As you prepare to partner with a nearshore team (or simply augment your team with some nearshore members), remember to prepare for effective collaboration.

1. Assess project requirements, including technology stack, timelines, and specific deliverables.
2. Develop a detailed project roadmap and ensure internal teams are aligned with the outsourcing strategy.
3. Set clear expectations and communication protocols.

Conclusion

Because of overlaps in time zones, cultures, and languages, Mexico is a prime destination for US businesses aiming for growth through efficient software development partnerships. However, not just any nearshore software development company will do. Choosing a development service provider with a proven track record of delivering and launching products faster and more effectively is absolutely critical to your success. To that end, be sure to partner with a company that is reliable and trustworthy, like ParallelStaff’s Nearshore Software Development service. Book a call today to learn more and start your partnership with a skilled and professional nearshore software development team. How many software developers are in Mexico? In short: a lot. Mexico’s software development talent pool currently sits at 700,000, with 130,000 new software engineers graduating yearly. Why outsource nearshoring to Mexico? Since labor costs in Mexico are much lower than those in the US, using nearshore software developers based in Mexico can lead to massive savings in labor costs for US-based companies. What is the monthly salary for software developers in Mexico? Salaries for mid-level Mexican developers and engineers are around $3,000/month, as opposed to the $10,000/month the same level employee may earn in the US. What are the disadvantages of outsourcing to Mexico? While outsourcing nearshore development to Mexico may save US companies time and money, they may face slight inconveniences due to minor differences in time zones, languages, and cultural norms. Setting expectations and opening lines of clear communication can minimize these disadvantages.