Monterrey’s IT Engine is Propelled by Well Developed Universities

Luke BujarskiAn industry conference recently in Monterrey, Mexico showcased the inner-workings of a mature information technology services ecosystem, offering important lessons on how public-private partnerships should be leveraged in driving regional competitiveness. But putting all of the flashy marketing and branding initiatives aside, the real stars of the event – and indeed the nuts and bolts of Monterrey’s agile tech industry – are the universities responsible for feeding a growing appetite for software developers, SAP consultants, and English-speaking tech support personnel.

The two-day event – Consejo de Software de Nuevo Leon Technology Summit, Mexico (CSOFTMTY) – hosted an impressive roster of homegrown and global vendors, governmental agencies, and keynote speakers anxious to discuss how the region must adapt to a rapidly changing global business landscape. Rounding out the circle of stakeholders were Monterrey’s tech-focused universities, which eagerly displayed their curricula carefully crafted around the needs of enterprises in business administration, engineering, computer science, and information systems management. Yet, what remains to be seen is if Monterrey’s highly-regarded educational centers will continue to keep up with the growing demand coming from both local and offshore clients.

Private/ Public Partnerships

Among the best include the Tecnológico de Monterrey (aka Tec de Monterrey) which is considered one of Latin America’s most prestigious private institutions, with over 90,000 students at the high school, undergraduate, and graduate levels, and a total of 25 campuses across Mexico. In terms of student population, the Autonomous University of Nuevo Leon (UANL) is the largest publicly-run university system with seven campuses across the state of Nuevo Leon. Another smaller but significant talent factory in Monterrey is the Universidad Regiomontana, which actively collaborates with private-sector partners via job fairs, curriculum development, and tech-focused career planning.

According to Gilberto Romero Rios the Director of Marketing for Softtek, “having strong relationships with the local universities is critical to building a successful tech services business here in Monterrey; it is a prerequisite.” Similar sentiment was expressed by the other IT services providers currently dominating the Monterrey landscape. Rolando Garay the President and General Director of Neoris compared Tec de Monterrey to “the MIT of Mexico” and explained to us that their relationship runs deep with the school, not only as a source of mission-critical personnel, but also as a major client for their SAP practice.

Application Services Will Drive Demand for Client-Savvy Personnel

Hector Ortiz the Director of Business Development at Hildebrando (also the president of CSOFTMTY) explained that application maintenance & support is a critical focus area for driving the nearshore business in Monterrey. “Developing a steady relationship with our nearshore clients through support services provides a steady stream of revenue and is an important component to our growth strategy.” Garay from Neoris also expressed similar interest in applications support as a major growth area. “Now that we’ve proven ourselves in software development and systems architecture, we are focused on providing excellence in application services in maintenance and BPO.”

Naturally, keeping the customer happy will require a greater level of interaction between nearshore development center personnel and the client. For the universities, this means that in addition to hard technical skills, they will need to focus on incorporating softer, customer management and language skills into their curriculum. All of the universities we talked to require a passing grade on the TOEFL examination as a prerequisite for graduation. Likewise, none of the big three (Softtek, Neoris, Hildebrando) complained about a shortage of English speakers in Monterrey. However, as with other LatAm markets, relatively short supply and strong domestic and offshore demand could strain Monterrey’s IT ecosystem later down the road, if training is not closely coordinated with growing company requirements.

Supply and Demand for IT Talent Will Continue to Grow From Within

The tech services giants are not the only ones hungry for IT talent. Monterrey is a commercial powerhouse hosting international companies like Sony, Toshiba, Carrier, Whirlpool, Samsung, Toyota, Hummer, Daewoo, Ericsson, Nokia, Dell, Boeing, HTC, General Electric, Gamesa and LG. Most if not all of these companies also have in-house IT departments that need to be staffed. So coordinating around the needs of both domestic and offshore companies will clearly keep CSOFTMTY and particularly the universities very busy in Monterrey.

Yet, this interplay between the various private and public sector partners is what has allowed the region to grow an impressive IT services sector. And while the nearshore advantage in terms of proximity and labor arbitrage has been a key enabler for this industry, a well-developed university system and a commitment to tech training and education should continue to drive innovation and excellence in field.