The Real Deal with Mexico

A headline I saw about a week ago on the BBC definitely needs more attention. Mexico’s ambassador to the US has criticized international media for overplaying the recent violence in his country. Ambassador Sarukhan speaking in New York said that the media doesn’t include “the context, or a wider vision of Mexico when reporting about the country”. We’ve all heard those reports, and especially if you’re a CIO considering Mexican outsourcing, it’s easy to get nervous without knowing what’s really happening on the ground.

That’s why I immediately thought of my friend Peter Ryan, Lead Analyst at Ovum, who recently travelled to Monterrey and put together a special account of the situation (reprinted on Nearshore Americas here). Ryan argues that the fundamentals that made Monterrey the outsourcing hub of Mexico are still strong, and can still be leveraged by companies. Some of the advantages he points out are “a savvy workforce with solid language skills, good accessibility to the US, and a blue-chip roster of global outsourcers”. That savvy workforce is really Mexico’s strength, especially in IT oriented cities like Monterrey, although we’re beginning to see some attrition and rising costs.  

 I agree, as Ryan says, that companies should be realistic about the city’s ongoing security issues. And I understand that his article is solely about Monterrey, while the Ambassador’s comments relate to Mexico as a whole. But I want to point out that when we talk about risk diversification, especially in IT and software dev, we cannot simply focus on the macro level. In Latin America and many other outsourcing regions, the pros and cons of one city can be completely different from those of another city, even within the same country.