Nearshore Americas

Another Large Global Services Player Announces Opening of Mexico Facility

NEW JERSEY and NEW DELHI, April 7 /PRNewswire-Asia/ –– Birlasoft, the global IT services business of the 150-year-old multi-billion dollar CK Birla Group, is setting up Global Delivery Centers in Beijing in China and Monterrey in Mexico. Birlasoft’s mission is to support clients from multiple locations with a combination of onshore, nearshore and offshore services models and leverage its worldwide workforce of close to 3,800 employees for improved delivery towards better business performance for clients.

Elaborating upon the strategic move, Birlasoft CEO Arup Gupta stated, “We are optimizing our relationship with our sophisticated clients by deepening our focus on a multi country strategy. This will allow us to become more responsive to our current and potential customers by helping us align with our clients’ primary time zones and most importantly, minimize risk by reducing dependencies on any one country. At the same time, access to China and Latin America’s talent pool will help us diversify our footprint and allow us to harness industry, technology and skill expertise in line with our strategic vision and at cost benefits that can be passed on to our clients.”

In the Gartner report, “Gartner’s 30 Leading Locations for Offshore Services” (19 November 2009) by Ian Marriott, Mexico and China were selected in Gartner’s Top 30 Offshore Locations 2010 for multiple reasons, including the country’s language proficiency, government support, quality and quantity of the current labor pool and its future scalability, infrastructure, cost, cultural compatibility, global and legal maturity, data and Intellectual Property security and privacy, and the political and economic environment.

In Gartner’s Analysis of Mexico as an Offshore Services Location (16 Oct 2009), Frances Karamouzis and Cassio Dreyfuss observe, “Mexico has favorable conditions as a source for captive or outsourced offshore IT, specifically for application development services, business process services and call centers. For US buyers, Mexico continues to offer the advantages of proximity, cultural affinity, time zone alignment, relatively lower costs, and ease of software and hardware procurement. The single biggest factor with regard to ease of doing business for U.S. enterprises is the North American Free Trade Agreement (NAFTA). Legal and contract issues, agility and flexibility of service execution, and service costs are all directly and positively affected by that.”

As per Gartner’s Analysis of China as an Offshore Services Location (28 October 2009) by Tina T. Tang, Frances Karamouzis and Partha Iyengar comment on China’s suitability for offshore outsourcing, “China and India have emerged as the two most frequently debated offshore locations in Asia/Pacific. Although India continues to be the dominant location (as measured by revenue and mind share), China is noted as having a more-modernized infrastructure and more heavily subsidized government support for sourcing initiatives. China’s English proficiency has been on the rise since 2004, and continued to have a steady emphasis on growth; however, proficiency is still not at the required quantities for the anticipated IT services and offshoring industry.”

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Considering that a major share of Birlasoft’s revenue comes from North America, setting up the Mexico GDC makes profound business sense for the SEI CMMI V1.2 Level 5 organization. The China GDC will allow Birlasoft to provide better service to the current and potential clients in Japan and other Asian countries while giving economic advantages.

The two GDCs in Beijing, China, and Monterrey, Mexico, will start with around 100 and 50 local IT professionals, respectively, and then grow as per demand. While the Beijing centre will focus on Internet technologies and QA testing, Monterrey will lay focus on infrastructure services and packaged applications.

Kirk Laughlin

Kirk Laughlin is an award-winning editor and subject expert in information technology and offshore BPO/ contact center strategies.

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