Choosing an IT Business Partner
Outsourcing has become a common business practice that allows businesses to gain everything from the skills to business services that usually feel hard to build and manage. Sometimes it may happen because of insufficient resources or in-house constraints, but regardless of the problem, outsourcing is a viable solution.
When looking for outsourcing services it is important to choose a company who has experience and a proven track record of quality. This ensures that your dollar will go a long way and you will be receiving a top-of-the-line product or service. There are two options when choosing where to outsource; an offshore resource such as India who is not in your time-zone, or a nearshore resource such as Mexico who works in your same time-zone.
Each of these options comes with their separate strengths and weaknesses, but for the purpose of this article, we are focusing on the differences in the structure of an outsourced team in Mexico vs India.
3 Differences When Building an Outsourced Team in Mexico vs India
When choosing an IT business partner, it's important to think about every aspect of the relationship. Typically, when thinking about the differences between Nearshore and Offshore outsourcing the first things that come to mind are cost, time-zone, culture, infrastructure, IT skills and more, but many people don’t consider how your actual outsourced team is structured.
Manager to Lead Ratio
Determining how many managers you need per lead is crucial in determining the cost of your outsourced team. The fact is a manager’s salary is higher than a lead’s salary so the more managers the higher the cost of the team. When creating an India based outsourcing team, the typical ratio of managers to leads is roughly 1:3. Conversely, when building an outsourced team in Mexico the ratio leans more towards 1:10. This is largely due to India having a high attrition rate which leads to rehiring and retraining new employees. A typical India based outsourcing team retains approximately 40% less full-time employees than that of Mexico at any given time. On top of that, some Indian companies require the managers to be US based, creating more overhead because the salaries of a US manager tend to be much higher. This type of employee/management structure can result in your investment going to inflated overhead costs rather than your product development and outsourcing services.
Once you handle how many managers are necessary to handle the team, it's time to determine the skill level of those on the team. A typical India team is comprised of a mix of junior-level and high-level developers. This structure often appears as the cheaper route, but overall, it can lead to a lot of fixing errors made by the junior staff and harder to update software because it isn't written properly.
Mexico, unlike India hires and trains all their employees to be high-level and provide quality contributions. This leads to more time spent moving a project forward rather than having to correct previous mistakes.
NearShore Technology and the Mexican government, over a 13-year time span, have helped fund programs that will insure the increase of STEM geared laborers. Currently these programs graduate over 130,000 qualified engineers every year. This means a better quality of work for our IT business partners and for the future workforce.
Working Capacity per Person
Something we don’t often think about is how often a person is available to work in a year. The general consensus is probably that everyone works a 40-hour work week and has roughly the same number of days off, but that’s actually far from the reality. Just looking at workdays, a typical Mexico employee works a total of 242 days in the year, where a typical India employee works 191 days. This discrepancy of 51 days comes from additional holidays and vacation days given to employees. It ultimately means less time you can communicate with your outsourced team, and less time they are working on your projects.
On the other hand, a NearShore resource in Mexico is available and working the additional 51 days but also on a 44-hour work week that matches your time zone. When you are working, so are your outsourced resources.
Several factors play into choosing an outsourcing partner in Mexico vs India, but don’t stop with the upfront and obvious differences. It's important to look at where the money you are spending is actually going, and the answer is often in the structure of the team.
India has previously been well known as being one of the most popular choices for outsourcing, but the world is changing and so it the IT game. At Nearshore we have proven data to show you why bringing your IT needs closer to home is a better choice. At NearShore Technology we believe in providing the best customer service and products to our IT business partners.