Introduction
In today’s globalized business environment, companies are continuously seeking strategies to optimize operations, minimize costs, and enhance service delivery. Nearshoring, the practice of transferring business processes to countries geographically closer to one’s own, stands out as a highly effective approach. This model contrasts with offshoring, where operations are moved to distant countries, often on different continents. Nearshoring offers distinct advantages such as significant cost reductions – often surpassing 40% compared to similar roles in the US – with minimal impact to collaboration advantage due to closer proximity, shared time zones, and cultural affinities.
The increase in nearshoring is particularly pronounced in sectors such as IT and Customer Service. This approach aligns with the operational strategies of Global Capability Centers (GCCs), which are increasingly focused on customer success functions. Countries like Mexico have become hubs for these activities, given their alignment with the strategic needs of North American businesses.
The Allure of Mexico for Nearshoring:
Competitive Advantages and Key Factors
Multiple key factors highlight Mexico’s desirability as a nearshoring destination. Firstly, the country’s economic stability provides a conducive environment for foreign investments and business operations. Its geographic proximity to the US simplifies communication complexities. Furthermore, Mexico boasts a young, well-educated workforce, with 77% of the working-age population having advanced education.[1]
This makes it an ideal location for industries reliant on innovative IT solutions and effective customer relations. Compared to the rest of Latin America, Mexico, along with Brazil, leads the region in producing tech professionals, contributing significantly to the LATAM tech talent pool.[2]
The specific advantages for establishing customer success operations in Mexico include alignment with US time zones and cultural affinity. This alignment, together with the familiarity of Mexican accents among American customers, ensures that the accent itself does not hinder communication, promoting smoother exchanges. These factors contribute to seamless customer interactions and position Mexico as an optimal nearshoring destination for service-oriented sectors.
Mario Jimenez, Director of LATAM Operations at Aeries Technology, further underscores this viewpoint: “Our nearshoring initiative goes beyond mere geographic considerations – it blends cutting-edge technology with local insights to develop distinguished solutions. This approach is redefining our service delivery, enhancing efficiency, and meeting our clients’ changing needs.”
Navigating the Nearshoring Landscape in Mexico:
Talent and Infrastructure
Mexico’s success in nearshoring is supported by robust sectors such as IT, and a focus on advancing education and technical training, ensuring a steady supply of skilled professionals. The tech sector has seen remarkable growth, with cities like Guadalajara and Monterrey emerging as hubs for IT innovation and nearshoring operations. Guadalajara alone represents about 40% of the country’s IT industry, excelling in software development, e-commerce, and healthcare technologies.[3]
Significant investments in infrastructure have enhanced these capabilities, with contributions from both local universities and global tech companies fostering a conducive environment for technological advancements. Government initiatives such as the Program for the Development of the Software and Computing Industry (Prosoft) have been instrumental in enhancing R&D and technical training, supported by policies providing tax incentives and promoting industry-academia collaboration.[4]
Overcoming Challenges and Mitigating Risks:
Nearshoring Initiatives in Mexico
Nearshoring in Mexico offers significant benefits, but companies must navigate challenges such as complex local regulatory frameworks and potential political instability.[5]
To effectively manage these risks, businesses should form strong local partnerships and conduct thorough market analyses to anticipate and mitigate potential obstacles.[6]
Within Mexico, Guadalajara distinguishes itself from larger cities like Mexico City and Monterrey. It is renowned for its vibrant tech ecosystem that provides scalability and an environment conducive to tech innovations, making it a strategic choice for nearshoring. Home to approximately 40% of Mexico’s IT industry, Guadalajara specializes in software development, services, and business process outsourcing (BPO).[7]
These sectors demand high technical expertise and innovation, aligning well with the needs of tech companies looking for nearshoring opportunities.
The combination of a focused tech industry and a dynamic innovation ecosystem positions Guadalajara as a preferred location for technology-based nearshoring initiatives, offering a unique blend of opportunities for businesses aiming to leverage nearshoring’s full potential.
Case Studies: Aeries’ Successful Nearshoring Projects in Mexico
- Example 1: In partnership with the client, a leader in digital marketing automation, Aeries successfully established a GCC in Guadalajara, Mexico. This initiative aimed to capitalize on the region’s strong technological infrastructure and skilled workforce to enhance the client’s efficiency across various functional areas including customer success, IT support, and engineering.The GCC’s meticulous planning and execution led to significant achievements, including the strategic onboarding of 50+ new members within five months, driven by evolving business needs. This expansion helped achieve an 85% employee satisfaction rate. The initiative not only streamlined client operations but also reinforced Guadalajara’s role as a leading nearshoring hub for technology-driven services.
- Example 2: Aeries partnered with a leading GRC SaaS solutions provider to establish a nearshore GCC in Mexico, aiming to boost client operational efficiencies. The focus was squarely on the customer success business unit, aiming to streamline various operational functions. The team expanded to 100+ members within four months and the operational costs were halved.This initiative not only solidified the client’s presence in Mexico; it also refined the integration of the client’s staff into the new operational framework, aligning seamlessly with corporate standards. The strategic location and enhanced operations of the GCC significantly boosted the client’s capacity, enabling them to pursue more clients.
These case studies underscore the effectiveness of nearshoring through measurable outcomes such as cost reduction, scalability, and employee retention rates – metrics that are crucial for assessing the success of nearshoring initiatives.
The Future of Nearshoring in Mexico and Why Businesses Should Consider it
The strategic benefits of nearshoring in Mexico are clear and compelling. For businesses, especially those with significant customer success functions, nearshoring offers a pathway to achieve long-term benefits such as cost efficiencies, enhanced customer engagement, and operational improvements. As the business world evolves, leveraging Mexico’s geographical and cultural proximities remains crucial. Partner with Aeries to capitalize on these opportunities – our expertise in nearshoring equips your business not only to meet current demands but also to thrive in the face of future global challenges.
1 – International Labour Organization. (2023). Labor force with advanced education (% of total working-age population with advanced education) – Mexico. World Bank. Retrieved December 11, 2023, from
https://data.worldbank.org/indicator/SL.TLF.ADVN.ZS?locations=MX
2 – Secretaría de Economía. (2024). México – Economy, employment, equity, quality of life, education, health and public safety. DataMéxico. Retrieved from
https://www.economia.gob.mx/datamexico/en/profile/geo/mexico
3, 4, 7 – Conklen, R. (2024, June 10). Mexico’s tech boom: Fueling the future of nearshoring. Prodensa.
https://www.prodensa.com/insights/blog/mexicos-tech-boom-fueling-the-future-of-nearshoring
5 – Zaga, D., & Arias Novelo, M. D. (2024, May 31). Mexico economic outlook. Deloitte.
https://www2.deloitte.com/us/en/insights/economy/americas/mexico-economic-outlook.html
6 – Mijares, A. L. (2024, November 6). Top 10 industries benefiting from nearshore outsourcing in Mexico. Unity Communications.
https://unity-connect.com/our-resources/blog/industries-benefiting-from-nearshore-outsourcing-in-mexico/
