As the Mexican Market Grows Competitive, Innovation Becomes the Path to Expansion

Competition in the Mexican market among CX firms and tech services providers is becoming brutal. 

In the last two years, Mexico has emerged as a star within nearshore markets, with firms like Concentrix, Globant, Syras and Webhelp recently expanding operations in the country. This is a direct consequence of both US nearshoring incentives and the intrinsic values of the Mexican market in terms of its labor pool, as well as expansion opportunities.

Local and international firms are doubling down in their efforts in Mexico to secure the workforce needed to deliver services. That competition also translates to business development and the chase for new clients.

Succeeding firms in this environment are applying that old Silicon Valley model: innovate to gain market share. When it comes to retaining talent, signing new clients or attracting new investments, only innovative strategies bring results in this new, highly competitive environment.

“We understand that today innovation is key to our business model. The market is changing rapidly, and it is up to us to make sure that both our staff and clients continue to have the right experiences,” said Washington Drumond, Director of Innovation and Digital Transformation for Concentrix in Latin America.

Culture to Promote Innovation

Mexico’s economy is showing significant strength in its post-COVID recovery. GDP numbers have been improving since the end of 2021, and the Mexican peso keeps showing solid performance against the US dollar. 

This lasting boost to an economy that now welcomes technology more than ever was the result of Mexican market participants quickly understanding the urgency and need for investment in remote working, digital infrastructure, mobile banking and reliable communication networks due to the pandemic.

The Mexican government is not a big spender when it comes to research and development, at least not when compared to other developed nations like the US, Germany and Israel. Nevertheless, the country has been rapidly rising in the innovation index compared to other nations over the past few years due to steady reforms and dynamic policies.

However, when most people think about innovation, they imagine a specific product or service. The environment, policies and culture from which innovative ideas emerge are as important in the process. This is true for countries and specific organizations.

“Concentrix makes sure to promote innovation everywhere. And by that, it means having a comprehensive internal framework to make sure every staff member has the tools to come up with and share innovative ideas,” Drumond told NSAM in an interview. “In a sense, we make it possible for everyone within the organization to support in our efforts of growth and adaptability to change market dynamics.”

Concentrix built several internal programs that recognize and reward internal innovation. The company implemented what it calls a Tech infused Advisor Lifecycle Framework in order to make its service model more dynamic and assertive. That program came as a suggestion from a staff member.

“We even hold internal programs to incubate ideas in areas as diverse as ESG standards and how to implement them within the company or real estate issues,” Drumond added. “We go as far as offering courses and different training tools for our staff trying to empower them in their roles and in this firm-wise constant innovation process.”

According to Drumond, innovation needs to go beyond improving essential business products. Companies competing in nearshore markets must get an extra competitive edge in everything they do. This means adapting and improving the customer and staff experience to maintain a seamless interaction in different spaces.

“We realized many firms struggle with the onboarding process. We have implemented multiple strategies to create a smoother process,” he explained. “As new staff enter the firm, precisely facilitated by our own innovative internal tools, we make sure to immediately provide the psychological and cultural empowerment resources they would need to contribute with new ideas.”

Cybersecurity

Cybersecurity remains a chief concern and challenge for companies operating in nearshore markets. Organizations impacted by ransomware and other kinds of cyber attacks face not only financial damage, but also potential reputational firestorms.

Latin America and the Caribbean continue to perform poorly when it comes to cyber defense standards. One in every three ransomware attacks in the world targets a Latin American country. In 2020, Kaspersky registered an average of 5,000 ransomware attacks per day against targets in Latin America.

In Mexico, lawmakers are currently working on various initiatives to update the national cybersecurity framework. One of these proposals seeks to produce a constitutional reform to include cyber threats as a primary national security concern. In the last couple of years, the Mexican National Guard and local private sector associations have increased awareness and cooperation to secure cyberspace in a country that has been particularly vulnerable to attacks.

“To be able to innovate and grow, companies need to be capable of protecting their IP and clients’ data. Otherwise, nothing else matters”—Washington Drumond, LATAM Director of Innovation and Digital Transformation at Concentrix

However, legislation is not rising to the level of the threat. It is up to companies to develop the right tools to protect themselves.

“Security in cyberspace is a top priority for the company as well and should also be for every company wanting to succeed. To be able to innovate and grow, companies need to be capable of protecting their IP and clients’ data. Otherwise, nothing else matters,” Drumond commented.

Artificial Intelligence

The AI revolution is developing in real time. Mexico’s government developed an AI strategy seeking to build a framework to guide both the public and private sectors. This strategy focuses on governance and security issues, solving industry needs and international cooperation on the matter.

This innovative framework –launched by the Mexican government in 2018– has proven helpful as ChatGPT and other products are rapidly disrupting the way things work in academia, business and even the arts. In a Statista survey published in 2019, multiple CX executives said that AI will probably have its most significant impact in the industry by providing improved analytics and reducing the need for human involvement in specific processes and tasks.

This likely remains true, but the progress made in AI technology during the last year indicates that CX firms will see almost every aspect of their business model changing by AI.

According to Drumond, companies that do not apply AI technology to their products may be quickly left behind.

“There are limitless options for products, services and business models that can be developed with AI. We are probably going to see more businesses trying new ways to apply AI to streamline processes and super-charge productivity for example, ” Drumond stated.

“AI is already beginning to be an essential component of CX and tech operations. We see it as a human effort multiplier that can make the unimagined, possible ,” he concluded.