Jul 27, 2011

Is nearshoring a worthwhile option for cutting company IT expenses?

The past decade many companies have tried outsourcing their IT needs to India with a variety of levels of success. The largest barriers seem to be differences in culture and language which may be responsible for holding back companies from pushing forward with these plans. Is nearshoring (to Canada or Mexico) a better alternative? I've had good success with technical support calls to AT&T (Newfoundland call center) and Telvista's call centers near San Diego appear to be growing due to corporate demand. Would you consider nearshoring your IT support needs?

Right now we're too busy developing our cloud strategy to be distracted by offshoring and nearshoring. Once we've developed and deployed our servers to a redundant, mesh network then maybe we'll see how our actual workload has decreased (as promised) or increased (as I fear).

It's difficult to compare India with Mexico when considering offshoring or nearshoring. India has historically had a tight affiliation with math and philosophy and religion, and they graduate 14,000 PhD's a year from a population of 1.2 billion people. Mexico does not have these traditions, and only has a tenth of India's population (112 million people) with a much smaller PhD graduation rate to boot. This means that there are many fewer high-level IT workers in Mexico than in India. Couple this with the actual number of IT firms that are based in India, and it's easy to see why there is much less enthusiasm for nearshoring IT to Mexico than to India.



How many US IT workers hold PhD's? Very few. I think your argument is a little weak.


There are a lot more people in America who speak Spanish than who speak Hindi or 100 other regional languages in India. Coupled with the fact that a great majority of immigrants speak Spanish, it would make more sense to base call centers in Mexico than in India, purely so that it would be easier to understand what the tech on the other end of the phone call is saying. All services being equal, Dell would have had much less pushback from sending their call center jobs to Mexico than sending them to India.



Be careful when making large, over-reaching generalizations because prejudice can cut both ways. I've met some IT workers of Indian descent who were promoted beyond their abilities because of the prejudicial thinking that "all Indians are smart." My experiences haven't proven this to be the case.


One of the issues holding back Mexico's nearshoring success is the  threat of violence and a perceived lack of security. Many businesses fear investing in a foreign country that is riddled with drug wars, police corruption, and the threat of violence against their employees. The news we see on television often equates Mexico with Afghanistan, at least from the negative stories that make the headlines.

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