An article in the Wall Street Journal realistically describes the state of affairs in Latin America. It describes Latin America’s quiet revolution this way:

Most of Latin America is, however, undergoing a period of unprecedented political and economic transformation. In Chile, Brazil, Peru, Uruguay, Costa Rica, El Salvador, Panama, the Dominican Republic and, yes, Mexico … there has been a quiet but substantial movement toward the creation of societies that are characterized by increased economic opportunity, social mobility and political democracy.

Noticeably missing is a discussion of Columbia which is becoming another outsourcing destination for American companies in Latin America.

Clients are expressing continued interest in developing their software in Latin American countries because of the closeness in time zone and distance. This article gives a good sense of how close the various countries are to the U.S. politically and culturally too.

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I delivered my talk yesterday to about 30 companies here in Queretaro Mexico and made many new friends and contacts.

One of my slides contains a Mexican saying that I also included in Chapter 2 of Software without Borders, in the section that discusses outsourcing to Mexico:

“Pobrecito Mexico—tan lejos de Dios y tan cercas de los Estados Unidos!”

“Poor little Mexico—so far from God and so near to the United States!”

I first heard this expression from a Mexican speaker at a conference in Costa Rica a few years ago. Everyone in the audience laughed, especially us Americans. Later, I found this exact expression in Spanish online and I included it in the book.

So I asked the audience if they know this saying.  They all laughed and then they started commenting amongst themselves. Finally, one of them smiles and says, “Yes, this is our saying, but you have one of the words wrong.  The word ‘cerca’ means near. Not ‘cercas’, that means fence or wall. You know, like the wall the United States wants to build at the border.”

More laughter.

Ay Caramba!  The devil is in the details!

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To be fair, that really isn’t the point of this blog post The damaging aspects of offshore outsourcing made by Mark Kobayashi Hillary in the U.K. But that was the first impression I got when reading about his first trips to India where a drive through poverty is required to get from airport to hotel.

I just arrived after finishing a similar ride from the airport in Mexico City to the city of Queretaro. There was much less poverty than India I am sure. But the thought of outsourcing software development to Mexico having some relationship to the small and dirty concrete apartment buildings I saw an hour earlier just didn’t make sense for me.

Mark’s real point is as we outsource our work, our culture also comes along for the ride. Indeed I saw too many MacDonalds and Burger Kings in my ride through Mexico. Let’s just hope some of our values of freedom of choice and education will also come through along with our sometimes less-than-healthy eating habits.

My friend Bert (who has an MBA from Stanford, but I don’t hold that against him) says that when you are in business about 20% of the people out there - employees, partners and vendors - will try to screw you. “It’s not a huge problem,” continues Bert, “when you find out who they, then you just never do business with them again.”

Similarly, some managers and workers in these less wealthy countries will undoubtedly grow corrupt from what seem like windfall profits and then arrogantly cheat their employees or us consumers of their services. Then we won’t do business with them and drive home another lesson about free choice in the market place.

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On February 20, 2008, Steve Mezak will be speaking at the Go-to-Market Symposium hosted by Mexico-IT in four cities in Mexico about Why U.S. Companies Will Outsource to Mexico.

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The Mexican government is offering tax incentives to Indian IT companies that set up shop in their country according to a brief Emerging Markets NOW report. Indeed, I have already read of Indian IT creating software development centers in Latin America to better serve customers in the U.S.

Of course, you can work directly with software development vendors in Latin America and there is a recent increase in the number of Latin American vendors including new partners in the Accelerance Global Partner Network.

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It’s easy to run into many hardworking people of Mexican origin in California. Mexico is a large and diverse country with a several great universities. Mexicans are also coming to the U.S. for high-paying white collar jobs in addition to the manual labor they are famous for.

I heard this story on the radio yesterday that tells how some of them are also becoming high-tech entrepreneurs.

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Professional programmers from Latin America that have emigrated to the U.S. are looking back to their home countries as a source of software development talent. 

Why? 

Because their experience with other outsourcing destinations suffered from a lack of English skills, cultural and time zone differences. Besides that, travel to places like India takes too long and is too expensive. 

You can read about some of these Latin entrepreneurs in the Outsourcing in Local Time article in a recent issue of Red Herring. 

An advantage of outsourcing to Latin America is the ability to implement a collaborative Agile software development process with your nearshore team because of the significant overlap of workday with the U.S. 

Meanwhile, the governments of Central and South American countries are encouraging these increased business ties with the U.S. Recently the government of Chile visited Silicon Valley to promote outsourcing to Chile.

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Not tomorrow. Mexico is here today!

Outsourcing to Mexico seems to be getting more notice lately in the press. The government is heavily promoting Mexico as a natural destination for IT outsourcing from the U.S. They have helped to establish a Mexican business incubator named TechBA here in Silicon Valley a couple of years ago.

Outsourcing to Mexico seems to be ideal – it’s close, many Mexican engineers are bilingual and they can travel to and from the U.S. easily because of NAFTA. In fact some American companies use Mexican programmers for staff augmentation. But outsourcing to Mexico is less expensive than bring engineers here.

An editorial in CIO magazine has both positive and negative stories to tell about outsourcing to Mexico. But overall, I have heard many more positive stories. Outsourcing anywhere can be difficult if you have limited experience. But wouldn’t you rather fly to Mexico in a few hours than spending days traveling to India to straighten out technical and management issues?

Would you consider Mexico as your outsourcing destination? If not, why not?

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