Collaborative Service Model Becomes Important Factor in Mexico’s Ascendance

Many global IT companies are settling in Mexico, making the most of the country’s improved labor conditions and IT infrastructure, the latest white paper released by Nearshore Americas explains.  Entitled “Mexico’s Creation of a Third Way to Engage in Global Outsourcing,” the paper features case studies on three emerging firms – Vangtel, Praxis and Dextra Technologies – and explains how a unique “collaborative service model” is helping the country leapfrog its way up the ladder of the global outsourcing industry.

Vangtel’s offerings appear to be tailor-made for firms looking to relocate from the United States due to stricter visa laws and growing wages. Vangtel houses its clients at its own facilities in Mexico and provides staff to perform back-office functions such as accounting, payroll, human resource and procurement functions in the style of shared services operations.

Its clients can later decide on their staffing needs, develop their own training schemes and take charge of candidate screening, testing, selecting and supervising their Mexican employees. Today the company has over 14,000 staff working directly for clients under the shelter program, with 500 employees providing support services.

Meanwhile, Dextra has posted an impressive 20% compound annual growth rate over the last four years, and its CEO Daniel Chavez states that his company gets 90%t of its business from what he calls ‘US-based engagements.”

Dextra performs a range of functions in IT services and software engineering, and specializes in mobile and embedded technologies. Its clients include HP and 7-Eleven in the area of IT services, and Ericsson and Dolby in mobile and embedded software development.

Finally, Praxis symbolizes Mexico’s growth on the global stage.  Founded in Mexico City in 1996, this outsourcing firm has expanded operations across the Americas and into Europe, and is working with collaborators in Russia, Israel, the Philippines and Australia.

The white paper states that geographic proximity, cultural overlap and economic ties with the United States – NAFTA in particular – position Mexico as the ideal destination for global outsourcing companies. It also notes that although India still houses the world’s biggest outsourcing industry with lower wages than in Mexico, the North American country offsets such drawbacks by providing compelling incentives to foreign companies.