Andrew
Burak
CEO at Relevant

Software Development Outsourcing to Mexico: Should You Go for It?

Outsourcing

In 2015, Bill Clinton said, “All we read about [Mexico] is the violence and the drug war. The truth is that /…/ the Mexicans produced 113,000 engineers. We [the Americans] produced 120,000.” Because of Mexico’s reputation as an unreliable country, this statement made a huge splash. But in fact, the former US President wasn’t far from the truth. 

Mexico has made impressive advancements in improving its technical potential, and consequently, outsourcing software development to Mexico has become the norm. But ios this country worth your attention? In this article, we’ll take a brief overview of the Mexican IT ecosystem, present you with the main reasons for IT outsourcing to Mexico, and suggest a few other alternatives. 

Five IT outsourcing destinations that are worth your attention

The global outsourcing market is huge, and you can find numerous lists of the best IT outsourcing destinations on the web. Since there are no one-size-fits-all standards for assessing a country’s IT outsourcing potential, we’ve cherry-picked the five best destinations that stood out to us.

India

Every list of the most sought-after IT outsourcing hubs begins with India. The country boasts a vast IT talent pool and is considered to be one of the most affordable IT services exporters in the world. The average wage rate is less than $7 (488 Indian rupee) per hour for software development. But these extremely low wages don’t stop India’s IT experts from providing a full scope of software development services. 

On the other hand, despite its size, India’s talent pool is known for the mediocre quality of the services they provide. Some reports suggest that 95% of Indian software engineers aren’t qualified for software development jobs.  

China

There’s not as much data about Chinese software development services. Still, based on the crumbs of information available, China is worth our attention. 

China is ranked second on the list of leading offshoring destinations. The country allegedly produced 4.7 million tech graduates in 2017. Their quantity-to-quality ratio is better than India’s, though. Hackerrank ranks Chinese developers first based on their programming skills. On the other hand, China is known for its low English proficiency. In addition, its considerable time zone gap with the European Union and the US might cause communication issues when working with this country.  

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Brazil

You won’t find this country among the top countries in most reviews of software development venues, but Statista ranks Brazil as the best offshoring destination in Latin America. Thanks to the Brazilian government’s efforts to improve the country’s IT infrastructure, Brazil now boasts 90 technological parks and 35 startup accelerators. 

And though the programming skills of most Brazilian developers are considered to be in the same league as their Indian colleagues in terms of quality, they are known for sticking to deadlines and delivering exactly what was promised. For clients from Canada or the US, Brazil can be a nearshore alternative to India or the Philippines for simple technical tasks. 

Ukraine

Ukraine seems to be an ideal middle ground in many respects. With the largest tech talent pool in Europe and over 1600 IT service companies, Ukraine offers a good quality-to-price ratio.  Software development salaries average $20,000 yearly, and Ukrainian developers can handle projects of varying complexity and tech stacks with excellence.

Due to its location in Eastern Europe, Ukraine’s working hours overlap with all EU countries. But, given that the country isn’t part of the EU, some of its companies might not comply with all EU or US standards. So, for banking app development or any other projects that involve sensitive data, look for compliant vendors. Fortunately, there are plenty of those in Ukraine.

Mexico 

Mexico is a good option for businesses that are interested in Central or South America as their software development destination. Known for producing a large number of tech graduates, Mexico also takes pride in its fast-growing IT infrastructure, which includes numerous technological parks, startup accelerators, and R&D centers. 

Due to Mexico’s long history of cooperation with the US, many American companies seek affordable and qualified tech talent in Mexico. A lot of businesses, such as Amazon and Wizeline, have even settled in Mexico to fully tap into the country’s IT potential. 

If you are interested in software development or UX/UI design outsourcing to Mexico or are looking to hire dedicated software development teams there, read on to find more information about the IT industry in this country. You can also read more about Poland, Romania, and other destinations to outsource web development or mobile development in our blog.  

A brief overview of the Mexican IT ecosystem

The lack of available resources in the US workforce, Trump’s restrictive immigration policies, and the Mexican government’s focus on the IT sector turned out to be a blessing to Mexico’s IT ecosystem. Almost non-existent two decades ago, it’s now blooming. 

It’s easy to get lost in the pool of available information, so to make your first acquaintance with one of the leading IT outsourcing destinations in the world less overwhelming, we’ve picked some facts that best characterize the IT ecosystem in Mexico: 

  • Overall, Mexico has 223,398 software developers. Mexico City and Guadalajara are the most significant tech cities in the country. Other cities with the highest IT talent density include Monterrey, Tijuana, and Merida. 
  • The country is home to 20 technological parks. 
  • Some of the best startup accelerators in Latin America are located in Mexico, including TechStars, MassChallenge, and GDL Startup. The country now boasts 109 startups in the software and data sector.
  • As the first LATAM country to establish fintech regulations and a country with the highest transaction transparency rate, Mexico has more than 20% of all investment deals in the region.  
  • According to Clutch, more than 800 web development vendors and over 350 IT outsourcing companies operate in Mexico. 
  • Mexico is an attractive venue for tech companies from overseas. For example, more than 100 American companies (including Amazon) opened offices in Mexico between late 2018 and the first half of 2019.  

Though we are just scratching the surface with these facts, they speak volumes. Below, you’ll find the main reasons why businesses consider Mexico as their outsourcing destination.

Mexican IT Ecosystem overview

Why companies choose to outsource software development to Mexico

The information technology outsourcing sector is growing by 10-15% annually, and Mexico is considered to be the world’s third-largest IT services exporter. What makes the country a favorable location for offshore projects? Let’s discuss the benefits of outsourcing software development to Mexico in more detail.  

Talent

Mexico boasts one of the largest tech talent pools in Latin America for a reason. The country is home to some of the top technical universities in Latin America, such as the National Autonomous University of Mexico, Tecnologico de Monterrey, and Universidad Autónoma de Nuevo León. That’s to say nothing about the countless STEM courses in schools and colleges.  It’s no surprise that the country reportedly produces over 120,000 engineers per year.

Quality

The Mexican talent pool is impressive, not just quantitatively but also qualitatively. Just imagine: nearly a quarter of all Tec de Monterrey graduates land a job before graduation. This statistic demonstrates both the high demand for IT professionals and the quality of the talent produced by Mexican tech institutions. 

Mexican IT outsourcing vendors are known for their vast expertise and familiarity with best software development practices, including agile methodologies. On top of that, SkillValue rates Mexican programmers second in the world based on their programming skills. 

Mexican developers are reported to have second-best programming skills worldwide.
Source: Where to find the best developers in 2019?, SkillValue

Affordability

According to the Deloitte Global Outsourcing Survey, сost is the primary driver of outsourcing. Interestingly, despite the vast amount of well-educated IT professionals and the quality of the services they deliver, Mexican software development services are quite budget-friendly. For example, while the entry-level salary of a US developer averages $74,000 per year, a senior software engineer in Mexico earns $25,000 annually. In terms of software development, this means that for the price of one app in the US, you’ll get several in Mexico. 

Time zone match with the US

Time zone match is another factor that makes hiring remote software developers more affordable. When the working hours of a client and a vendor overlap, it’s easier to plan video calls, improve the project in real-time, or make trips to the vendor’s office. 

No wonder many US companies choose to outsource to Mexico. Due to geographical proximity and time zone overlap, they can eliminate one of the main software outsourcing challenges and significantly reduce travel costs and misunderstandings.

Cultural proximity 

Though culture fit isn’t the main criterion in the software development vendor selection process, the work is far more productive with a team of developers that understand each other and share the same values. Mexicans are familiar with America and Western culture through watching U.S. television, listening to US music, and so on. Knowing that, many American companies decide to open their offices in Mexico. Besides, in their attempts to increase productivity and attract foreign investors, many Mexican businesses embrace the Western approach in their day-to-day operations. 

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Is outsourcing to Mexico the most optimal option? Mexico vs. Ukraine

Despite the benefits of outsourcing web and mobile development to Mexico, it’s not always the best choice. For example, if you reside in Western Europe, LATAM or Asian countries might not be your best bet. 

In this situation, we recommend looking for development services in Eastern Europe. Ukraine is an excellent option in this geographic area. As an IT outsourcing destination, it’s as good, if not better, than Mexico. 

Let’s compare these two countries in terms of talent availability, service quality, affordability, and English proficiency: 

  • Talent availability: Ukraine’s tech universities graduate 16,000 qualified IT specialists yearly. Given that informal tech education, such as IT courses offered by software development companies, is increasingly popular, the real number of software engineers may be even larger and might exceed the number of tech graduates in Mexico.
  • Expertise: Like their Mexican colleagues, Ukrainian developers are known for the quality of services they provide. If you look at the Clutch list of the world’s best software development companies, you’ll find numerous Ukrainian options and only a few Mexican ones listed at the top. 
  • Affordability: Both Ukrainian and Mexican software engineers make, on average, $20,000-$21,000 annually, meaning that the cost of software development services in both countries is equally affordable. 
  • English proficiency: Though Mexico is only a short flight away from the US, the country is ranked 82nd in English proficiency, which can be a serious hurdle in the development process if you decide to hire Mexican programmers. In comparison, Ukraine is ranked 44th in English proficiency. 
  • Outsourcing-friendly legislation: The latest amendments to Mexico’s labor law prohibit Mexican employers from outsourcing. There are no such restrictions in Ukraine, so outsourcing to this country might be a wise idea for companies in Canada and the US, even though they are closer to Mexico.

As you can see, as an outsourcing destination, Ukraine outranks Mexico in terms of expertise, English proficiency, and geographical proximity to the EU countries. And these are just a few reasons why you should outsource to Ukraine.

Wrapping it up

why outsource software development to mexico

With so many opinions and rankings available, choosing the perfect IT outsourcing destination is a challenge. But finding a reliable tech partner with a proven record of successful projects is even more important than location. For example, Relevant has extensive experience in tackling the most challenging tasks. With years of experience under our belt, we have an impressive number of high-quality projects in our portfolio. So, if you need skilled IT specialists or a software development team, don’t hesitate to contact us

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Written by
Andrew Burak
CEO at Relevant
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